Gap Analysis

Goal

ASQ defines gap analysis as a structured assessment of the difference between the current state of a process, a system or an organisation and the target state. The analysis answers a decision question: can the organisation meet the need with its current structures, resources, capabilities and technology? If so, little or no change is needed. If not, the analysis names the capabilities to create, to strengthen and to retire.

The deliverable is the gap register. Each row carries a capability, its current state, its future state, the gap type and the action that closes the gap. The register is the basis for choosing the change strategy and for costing the business case. The ABPMP's BPM CBOK describes the case of a process: the team simulates the redesigned process and compares it with its current baseline to verify the promised savings.

Several related techniques measure a gap on a single object. Process analysis looks for the gap in one process and traces it back to its causes. Business capability analysis rates the performance gap of each capability on its map. Benchmarking supplies an external reference that the analyst can adopt as the future state. Gap analysis compares all the dimensions of a change at once and delivers the list of actions.

Usage

When to use

• Choosing a change strategy: the future state is described. Establish what to create, strengthen or retire.
• Replacing an application: compare the documented and tacit functions of the current application with those of the target software package.
• A new regulatory obligation: compare current practice with the text, for example the revised Federal Act on Data Protection (FADP).
• Merger or reorganisation: describe both entities on the same grid, then compare them with the target organisation.
• A benchmarking result: turn the distance to a reference into costed change actions.
• A training plan: use a competency framework to compare the skills in place with those the future role requires.

When not to use

• A problem whose cause is unknown: the analysis says what is missing, not why. Look for the cause with root cause analysis.
• A target that emerges through trial: a future state written in advance would be fiction. Deliver in short increments and test each hypothesis on a minimum viable product.

Description

Two meanings of the word gap

In strategic planning, the gap separates a company's objectives from the performance it can expect if nothing changes. It is measured in revenue, market share or margin. In business analysis, the gap separates two states of a capability: a process that does not exist, a missing skill, data that nobody maintains. When asked for a "gap analysis", the analyst checks which meaning the request carries. For the strategic gap, the Ansoff matrix classifies the growth options.

The same grid for both states

The analyst describes the current state and the future state with the same technique and at the same level of detail. The BABOK notes that one technique for both states simplifies the comparison. An asymmetry produces fictitious gaps. When the current state runs to forty activities in BPMN and the future state to five sentences, the comparison shows dozens of gaps. They are only differences in detail.

The grid fixes the dimensions to compare. The BABOK lists the capabilities that can be compared: processes, functions, lines of business, organisational structures, staff competencies, knowledge and skills, training, facilities, locations, data and information, applications and technology infrastructure. The analyst keeps those that the change affects. The analyst has the sponsor validate them before describing anything.

Running the analysis

1. Set the scope and the grid. The sponsor and the analyst define the boundaries of the organisation under study. They choose the unit of comparison: the capability, the process or the role. A register row combines a dimension with an object: "Data: applicant file". A gap found outside the scope goes to the issue log and leaves the analysis. The project manager assigns it an owner.
2. Describe the current state. The analyst describes what the organisation does today at the level of detail that the comparison requires. The sources are the existing process models, the organisation chart, the application inventory, the performance measures and interviews with the people who do the work. A written procedure often describes the work as planned. The analyst checks it against the work as observed.
3. Describe the future state. The future state comes from the strategy, the requirements, a benchmarking exercise or a target model. The analyst describes it on the same grid and, where possible, with a measurable target. "Reply to the applicant within two working days" can be compared. "A faster process" compares with nothing. Without a described future state, the comparison has no target. The analyst then describes it first, for example with business capability analysis.
4. Compare row by row. For each row, the analyst asks two questions. Does the current state cover the future state? Does the future state still need what the current state contains? The two answers give the gap type: missing, insufficient, superfluous or none. The analyst quantifies a gap of the "insufficient" type when a measure exists: lead time, error rate, unit cost. Without a measure, the analyst describes the gap in words and marks it as an estimate.
5. Turn each gap into an action. The analyst phrases the action as a verifiable result: "train two people to handle exceptions" rather than "improve training". A gap often calls for actions in several dimensions: a new process needs a trained person and data. Conversely, several gaps sometimes share one action. The analyst records this link in the register and counts the action only once.
6. Prioritise and hand over the register. The sponsor ranks the actions by their value for the objective, their risk and their dependencies. An action that others depend on goes first, even if its own value is low. The register then feeds the change strategy, which allocates the gaps across the transition states and the future state.

The "superfluous" type is easy to forget. An application or a report that nobody retires keeps costing money after the change. The rows without a gap stay in the register to show that the analyst examined the dimension.

Pitfalls to avoid

Writing the gap as a solution. "We lack a CRM" names a product and picks the option before the change strategy has compared the options. The gap reads "the front desk has no single view of the customer".

Reducing the grid to processes. A new process often fails for want of a trained person or reliable data. A grid limited to processes sees neither.

Describing the current state in needless detail. Weeks of modelling the existing situation delay the analysis without making it more accurate. The future state sets the useful level of detail.

Accepting an embellished current state. Where admitting a weakness is costly, managers describe the planned procedure rather than the practice. The analyst then relies on the performance measures and on observation.

Delivering a register without priorities. A register in which every gap weighs the same guides no decision. Each action receives a priority and an owner.

AI considerations

A language model speeds up the description of the current state. It sorts the content of procedures, minutes and application inventories into the grid. It compares two descriptions and proposes a first gap type for each row. It flags the fictitious gaps: the rows where the two states do not have the same level of detail. It rewrites a vague action as a verifiable result.

The model knows nothing about the organisation it describes. Without a source, it fills the current state with what is common in the sector. It then produces plausible gaps that do not exist. The analyst therefore asks it to cite, for each row, the document the row comes from. The sponsor chooses the future state and the priority of the actions because these choices commit budget and people.

A skills gap often names people. This data falls under the Federal Act on Data Protection. The analyst anonymises it or aggregates it at the level of the role before sending it to an external service.

Examples

A university of applied sciences replaces paper applications with online submission. The concept illustrated is the gap register: each row classifies a gap by type and turns it into a prioritised action.

The data migration goes first although its gap is the least visible: online submission does not work without a single file.

Visualisations

The diagram sets the two states side by side on the same rows. Between them, each row carries its gap type. Every row is recorded in the gap register with its action, including the row without a gap.

The table in the example is the deliverable. The team keeps it up to date until the change strategy is chosen.

Cost

Tooling

A spreadsheet or a shared document is enough to keep the register: one row per capability, one column per state, the gap type, the action, the priority and the owner. The team fills it in during a workshop or remotely. A physical or online whiteboard is useful for the comparison session when the owners of several dimensions meet.

For the process rows, a BPMN tool for process modelling describes both states in the same notation. Enterprise architecture tools that follow ArchiMate model the current state and the future state as plateaus. A plateau is a stable state of the architecture at a given date. The gap is the element that links two plateaus. These tools fit when the scope covers several domains and the organisation already maintains an architecture repository. The open-source tool Archi is one of them. For skills gaps, the competency matrix in the HR management system supplies the current state.

Sources

• American Society for Quality, Quality Glossary, "Gap Analysis": the definition of the technique as a structured assessment of the difference between the current state and the target state. The glossary states that the technique serves to prioritise improvement effort and to build an action plan.
• IIBA, A Guide to the Business Analysis Body of Knowledge (BABOK Guide) v3, §6.4.4.2 Gap Analysis: the use of one technique for both states, the list of comparable capabilities and the handover of the gaps to the change strategy and to the transition states.
• ABPMP, Guide to the Business Process Management Common Body of Knowledge (BPM CBOK), version 3.0, §5.9 Simulation Modeling: the comparison of a simulated redesign of a process with its current baseline to measure the effect of the change and verify the savings in the business case.