Gap analysis: What it is and why it’s important in project management
No matter how much planning you do, when you are executing a project, you may still face some challenges. The idea is that you will want to have the tools in place that will help you assess the requirements. Understanding if your project is on track is important and understanding how to do that is simple. A gap analysis can be of help and it is not difficult to understand.
Learn below more about this topic in this article created by our team at TMS.
How can we define gap analysis?
In short terms, gap analysis is a process that a project manager uses to compare actual performance versus expected performance. Any organization is going to profit a lot from this, regardless of if a company is meeting expectations or using its resources in a good way.
Using a gap analysis template means that we understand how a company is doing and what is the current activity. This analysis is usually done when you want to know how the project is progressing. It is vital to do this often, especially when the stakes are large.
Here are some details that will help you understand better what is a gap analysis:
- A method used to explain performance.
- Good to compare present situations with expected ones
- Used to discover strengths and weaknesses
- Can help in creating better processes
- Shows all activities to the stakeholders
Because it can be used by project managers to find issues and communicate them moving forward, knowing what a gap analysis stands for is important. There are different methodologies used for gap analysis, though we will be mentioning the most common steps later on.
How can a gap analysis help you?
The main use of gap analysis is to control different aspects of a project with data. This is important because:
- A gap analysis is going to assist you in finding any shortcomings to overcome. It can be easier to quantify or identify them and in the long term, and is going to assist in making improvements.
- Doing a gap analysis will improve the efficiency of your business. It will pinpoint anything unusual that is going on. Once done, you will be able to focus more on your resources and energy on what needs to be changed.
- Using gap analysis tools can also help you have an overview of the entire company or at least particular functions. This helps managers see if the organization has enough resources to meet its mission.
- You can also use gap analysis as a means to compare performance with potential. Knowing details that show how much a certain product or person has gone off down the line is essential.
- Gap analysis process means that you will have more data on how to improve. For example, when it is used in manufacturing it can help manage resources. What we mean by resources is money, material, or human resources.
Gap Analysis Examples
Even though the business world has a lot of areas, from sales, to customer service, and so on, we can still use gap analysis often. Here are some examples that show the range of how companies can use a gap analysis:
- When a company launches a product, it can also do a gap analysis in order to determine why the sales did not work as expected.
- When the productivity of an organization is not meeting expectations a gap analysis can help a lot and find what needs to be changed.
- If a company is low on supplies or resources, it can do a gap analysis often in order to find the reason why.
- A gap analysis can also be used to identify if a product meets the target needed.
- It can also help to find gaps in the market by comparing forecasts.
- Another use can be to check the product portfolio in order to find new sales opportunities. In short terms, this means that a company can discover new products to sell.
- Another thing they can do is to understand why certain products are not selling.
How to perform a gap analysis
Check this gap analysis template and see the four steps that are being described. From now on, you will know exactly what you must do when doing a gap analysis.
Identify current state
The increase in data use helps organizations check how they are performing. Different information coming from a sales department or production house can all be tracked now.
This helps in creating specific data points that a company can use to check their position and performance. Understanding where you are right now helps in creating a more realistic action plan.
You will also be able to check if progress is being made towards the desired state. If you do not know where to start, it is going to be quite difficult to measure progress towards a certain goal.
Identify your future state
As a project manager, you need to find goals that your company is trying to achieve. Setting goals means you will know the exact direction where your company wants to go towards. Start using the gap analysis template given to you and see how it works.
A future goal is probably one of the best things that you can set for an organization. This is because, in order to reach it, a lot of effort needs to be performed. When you are doing a gap analysis for your strategic plan, check all details. A good place to look at are the targets on your plan.
These targets can be from two to five years out. Always ask yourself where you are now compared with them and go back to the data that you collected.
Identify the Gaps
If you know where you are heading and where you started, the space between those two points is the execution part. You can also call it a gap. Dig deeper and determine the details for why the gap happened. Ask yourself questions that are applicable for your business. Try to answer them precisely and do not lie to yourself.
Be specific about it. If your revenue per employee is $50,000 less than the plan you did, why did it happen? Are there any issues in your workflow, with your customers or with the price range?
Identify how you will bridge the gap
After you get a hold on the gaps that exist, your next move should be to analyze the differences. It is important to understand why they are happening and what you can do in order to achieve your goals and objectives.
Decide on what you must change and determine the steps needed for that. Create an end date for when you want the gaps to be resolved. If you do not have an end date for a certain process, it can be overlooked, or completely ignored. Choose a completion date, even if it is far away in the future. The last step is to set the milestone to ensure your success.
Ending thoughts on these Gap Analysis Tips
When you set goals, you want to be clear and precise with them. Be realistic and do not go for something exaggerated. Understand all the details and how they are going to impact you. Changes done by your team or organization can for sure impact others. Think about the effects that are going to happen when you are creating your recommendations.
After you did this gap analysis template, make sure you try to come up with your own. Add details that are more specific to you. If you do not do this, you might risk that the solution will not be the best for you.
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