Gap Analysis

Reaching Your Ideal Future State

Gap Analysis - Reaching Your Ideal Future State

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Bridge the gap to drive your project forward.

You may be familiar with the proverb, "A journey of a thousand miles begins with a single step."

Wise words indeed. But, in a business setting, how can you be sure that the steps you take with a project will lead you to the right place? How do you get from where you are now, to where you want to be in six months or a year?

One answer to this question is Gap Analysis. It's a useful technique that enables you to identify the gap between your current situation and the future state that you want to be in, along with the tasks that you need to complete to close this gap.

Gap Analysis is particularly useful at the beginning of a project, or when you're developing a business case. But it can be used at any stage of a project (to assess your team's progress) or applied to any area of your business (to compare your actual performance with your desired or potential one). You can even use it at an organizational level, to check that you're on course to achieve your strategic goals.

In this article, we'll outline a simple, three-stage Gap Analysis process that you can use to get your project or business to where you want it to be.

Note:

Gap Analysis is not specifically mentioned as a technique in project management methodologies PMBOK or PRINCE2. However, it's a useful tool that you can apply when working with them.

How to Use Gap Analysis

Use the following three-step process to conduct a Gap Analysis.

1. Identify Your Future State

First, identify the objectives that you want to achieve, and the timeframe that you want to achieve them in. This gives you your desired future state – the ideal "place" where you want your business or project to be.

Perhaps you want to increase your company's market share, reduce your overheads, speed up the manufacturing process, or add functionality to your product. Or maybe you're more concerned with customer satisfaction or staff engagement. The Gap Analysis process works the same way in each case.

Be specific with your objectives, and avoid too many changes to the project, known as scope creep: Gap Analysis will only be effective when the areas under scrutiny are consistent.

As a simple example, let's say you're a sales manager in an e-commerce retail business and you've been tasked with increasing the profitability of your online sales to 10 percent within the next six months. You begin your Gap Analysis by defining the desired future state, as shown in the table, below.

Future State Current Situation Next Actions/Proposals
Profit margins for online sales to average 10 percent.    


2. Analyze Your Current Situation

Next, analyze the current situation for each of your objectives.

To do this, you may need to gather data from a range of sources. So, begin by asking yourself questions such as these:

  • Who has the information that you need? Who will you need to speak with to get an accurate picture of your current situation?
  • Is the information in people's heads, or is it documented somewhere, such as in company reports?
  • What's the best way to get this information? Do you hold brainstorming workshops? Do you need to conduct customer surveys, or an ethnographic study of your users? Do you need to interview your team members one-on-one, or observe project activities such as the design and manufacturing processes? Or is there some other way to find out what you need to know?

In our example, your finance department provides figures that show an average profit margin of 8 percent on your current sales. You add this information to your Gap Analysis, as shown below:

Future State Current Situation Next Actions/Proposals
Profit margins for online sales to average 10 percent. Profit margins for online sales average 8 percent.  

Your analysis of the current situation and the desired future state can be quantitative or qualitative, or both.

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