Gap analysis is a process that involves comparing actual performance with potential or desired performance. It is a formal study of what a business is currently doing and where it wants to go in the future. The "gap" in the gap analysis process refers to the space between "where we are" as a part of the business (the present state) and "where we want to be" (the target state or desired state) . Gap analysis can be performed at the strategic or operational level of an organization. It can be conducted in different perspectives, such as comparing one process to others performed elsewhere, which are often identified through benchmarking.
Gap analysis is a method of assessing the performance of a business unit to determine whether business requirements or objectives are being met and, if not, what steps should be taken to meet them. It is a technique that companies can use to evaluate their current position, decide their dream position, and formulate a plan on how to bridge the gap. Gap analysis can be used to identify suboptimal or missing strategies, processes, technologies, or skills.
A gap analysis process helps organizations determine how to achieve their business goals by comparing the current state with an ideal state, which highlights shortcomings and opportunities for improvement. By defining and analyzing these gaps, the management team can create an action plan to move the organization forward and fill in the performance gaps. Gap analysis is often a key part of strategic planning, which is a process that helps an organization define a strategy to accomplish its goals.
Gap analysis can be useful for small businesses, in particular, when they are figuring out how to allocate resources. In software development, gap analysis tools can document which services or functions have been accidentally left out, which have been deliberately eliminated, and which still need to be developed. In compliance initiatives, a gap analysis can compare what is required by certain regulations with what currently exists.
To perform a gap analysis, an organization needs to choose which area of the business to focus on and start with the current state. The organization needs to discover where it currently is before analyzing the gaps and determining where it wants to be. Gap analysis can be a key tool in identifying where things are falling short when an organization is looking for problems with its performance.
