Gap analysis

What is Gap Analysis?

Gap analysis is a process by which companies benchmark their current achievements against desired standards. Doing so helps identify the areas where they need to make improvements in operations, resource allocation and other areas to align them with their business objectives.

Types of Gap Analysis

• Performance gap analysis: In performance-based gap analysis, organisations may compare their existing performance against their desired performance. Doing so helps them figure out the gap between both and identify what measures to take to achieve the ambitious performance standards.

• Skills gap analysis: Skill gap analysis involves a thorough assessment of existing employee skills and competencies against a set of them recommended for smart execution of their roles. Skill gap analysis is the best approach to identifying training needs or additional hiring requirements for optimal performance.

• Process gap analysis: In process gap analysis, the companies examine their workflows and operational efficiency. This practice helps them pinpoint the bottlenecks that adversely affect their productivity, and come to better clarity on the improvements to bring to the processes.

• Technology gap analysis: Organisations may use different technologies in their operations. Some of them may yield good results while others may not. Through technology gap assessment, they get a clear overview of the performance efficiency of their current technological tools and systems against the organization's needs so that they can determine what upgrades or new technologies are required to stay competitive.

• Strategic gap analysis: For a business to be successful and grow, it needs to have healthy strategies to drive its operations. Checking whether their current goals and the strategies in place to achieve them are in alignment helps them decide if any adjustments are needed.

Popular Tools and Frameworks Used in Gap Analysis

• There are several methodologies available today to assist businesses in conducting a gap analysis. The two popular ones among them are:

• SWOT Analysis: SWOT stands for Strengths, Weaknesses, Opportunities and Threats. So, ideally, in a SWOT analysis, the business’s strengths, weaknesses, opportunities, and threats in the respective areas of the gap – skill, strategy, technology, performance or process - are assessed and determined by how they are individually and collectively related to organizational performance.

• McKinsey 7-S Framework: In McKinsey 7-S Framework, the focus is given on seven core elements—strategy, structure, systems, staff, style, skills, and shared values—to identify gaps and their alignment with the collective organisational objectives.