What is a gap analysis?
Identify your business's weak points to make it more successful
A gap analysis is used to identify the differences between where a business is now and where it wishes to be in future. It's a process that should be carried out regularly to make sure everyone is working towards the business goals and the company remains to be growing in line with projections.
It should be used to offer an action plan for growth too, identifying where investment should be made in order to help a business flourish. It's essentially an extension of a business plan, offering a more detailed roadmap and path to where a company wants to be in one, two, five or even ten years' time.
As you're carrying out a gap analysis, you may realise that there's quite a significant gap between where you are now and where you want to be. However, a gap analysis will help you break your strategy down into manageable chunks, helping you identify the resources you have now and what you'll need to get to your goals.
It will also help you understand what those resources (whether money, equipment or people) will need to do in order to hit objectives and obstacles you're likely to come up against along the way. This could be changing market conditions (such as Brexit), legislation changes (such as GDPR) and any other factors that could disrupt business progress.
This detailed guide to gap analysis will explain to you in easy steps how to create a gap analysis and why you should regularly perform a gap analysis to ensure your business doesn't fall behind.
Define your objectives
If you want to give a gap analysis a go, you can start by identifying your business objectives. Although you've probably identified these as part of your wider business strategy, you need to re-visit them, making sure they're achievable, credible and as clear as they can possibly be so everyone in your organisation can understand them.
The easiest way to develop a gap analysis is to start with a clean piece of paper and divide it into two columns. On one side, jot down the improvements you want to your business and on the right, imagine where you want those parts of your business to be in the future. For example, if you currently don't have the resource to develop certain areas of your business, list down alongside what resources you will have a year, five years or an alternative time period alongside.
If you are performing a gap analysis for your entire organisation, it's a good idea to create one document for each division or department so it's not so overwhelming and each management team can have a copy specific to their area.
After mapping out where you are now and where you want to be in future, you can start developing a plan to get your business from the left column to the right column. What needs to change in order to develop?
Analyse your data
Now that you have your goals, you need to collect hard evidence to understand how to achieve them. This is done by analysing your data for each of your business sections to understand the current performance of your organisation, before applying this data to your goals.
Review the specific activity you want to improve, and all the processes involved in that. Through this, you can then set more specific goals and targets to create a complete vision to carry your organisation forward as well as prioritising your business needs.
Isolate each activity undergoing review and describe its key points, and then analyse it with the data you've collected. For example, if you want to increase your software sales you might look at points of data such as how many calls or emails your salesperson is making, or if any of your campaigns are more successful (or seriously lagging behind) the rest, and why.
Present your findings
By combining your data with your goals and thinking about the bigger picture you should now have a clear vision to build a bridge over the gap to the desired state of your business. You can now focus on calling customers back or improving your presence on social media - whatever's required to reach that particular goal. Maybe you can bring in new technology to help you, too?
By doing this, you should now be able to see how to use your resources more effectively and be able to withdraw resources from money holes in your business.
It's extremely advisable at this point to carry out a SWOT analysis as well in order to understand your organisation's strengths, weaknesses, opportunities and threats, as this will help inform your gap analysis by giving you more information on what you need to improve and how your business needs to operate to succeed.
Why is a gap analysis good for your business?
A gap analysis helps you prioritise and understand your business needs and point out what you need to overcome to reach your objectives. Once you understand where the gaps are and what they are, it is much easier to then address how to cross it and prioritise which need to be sorted out first.
This analysis can give you a high-level summary of the whole company, or you can break it down and apply it to different sections in order to improve them by giving them achievable goals. That way you can ensure your business is using its resources properly, and by communicating the changes you want to make through setting new targets, for example, every employee in your organisation knows what they need to do to contribute to this success.
Image source: Bigstock
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