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What Are the Different Methods of Gap Analysis?

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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 16 November 2016
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Gap analysis allows a company to measure its actual performance against its potential performance. This process often allows a business to find areas where improvements in efficiency can increase productivity and profit. A few different methods of gap analysis include a review between a company’s goals and related responsibilities, analysis on procedures and staff available to meet them, and a look at actual results from desired results. Each method of gap analysis provides one piece of an overall larger puzzle. Gap analysis can be an ongoing process through a company’s lifetime.

Most companies have a variety of goals set by their mission statements, owners, and executives. These goals can be company-wide, specific to a department, or based on a position within the organization. Certain individuals are typically responsible for achieving the goal or leading the company in the right direction. The methods of this gap analysis technique are meant to find areas where weak links exist when a company attempts to meet its internal expectations. In most cases, a company focused on its goals will have few gaps in terms of responsibilities.

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Procedures can represent the specific guides or rules a company uses to ensure workers complete tasks in a particular manner. Each staff member or employee must be aware of the procedures and which ones are most applicable to each individual. Methods of gap analysis here seek to identify which individuals fail to follow procedures. In some cases, the procedures themselves may be the problem. Improper procedures can prevent or restrict an individual from completing tasks or activities in a timely manner, resulting in weakened output by the company overall.

Performance management presents another method of gap analysis. For example, a company may desire five percent net income for the month of June, based on the formally prepared income statement. If this does not occur, the company can use gap analysis to find where the budget process broke down and prevented the company from meeting its desired results. Methods of gap analysis also work to assess production output or individual employee productivity. In this fashion, a company can conduct monthly gap analysis.

Companies can use multiple methods of gap analysis at the same time. This allows a company to make many assessments on different operations simultaneously. A key point here is, however, to have a purpose behind the analysis. Failure to act upon negative information and correct operational problems can result in gap analysis that is all for naught.

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