Reviewed by Aug 27, 2020| Updated on
Meaning of Gap Analysis
Gap analysis is the method organizations use to monitor their actual performance in comparison to their anticipated and projected performance This research is used to assess if a company is meeting its standards and is making good use of its resources.
Gap analysis is the process by which a company can identify its current state — through evaluating time, money, and labor — and make a comparison to its target state. The management team will develop an action plan to push the company forward and address the performance gaps by identifying and evaluating those gaps.
Gap analysis is considered more difficult to use and less commonly applied than evaluating the length, but it can also be used to determine exposure to a variety of movement in term structure. The term "gap" in gap analysis is the void between where an entity is in the future and where it needs to be.
How Gap Analysis Helps?
When companies fail to make the best possible use of their resources, money, and technology, they will not be able to achieve their full potential. That's where the study of differences will help.
For any type of organizational success, gap analysis, often referred to as a needs analysis, is important. It helps companies to define where they are now and where they want to be in the future. Companies should re-examine their goals by evaluating obstacles to determine whether they are on the right road to achieving them.
Organizations of varying degrees, from large companies to small businesses may use gap analysis. There is no limit to which areas the use of this strategy will benefit; these areas include:
- Financial performance
- Quality control
- Employee satisfaction
- Human resources
The Steps Involved in Gap Analysis
Creating organizational goals, optimizing the current state, evaluating the gap data and creating a gap report are the four steps to gap analysis.