What Is a Gap Analysis?
A gap analysis process allows organizations to determine how to best achieve their business goals. It compares the current state with an ideal state or goals, which highlights shortcomings and opportunities for improvement.
Conducting a gap analysis can help you improve your business efficiency, your product, and your profitability by allowing you to pinpoint “gaps” present in your company. Once it’s complete, you’ll be able to better focus your resources and energy on those identified areas in order to improve them.
In a business or a company, GAP analysis compares the actual performance with the potential performance. Sometimes it is referred as need-gap analysis, need analysis or need assessment.
A company will determine the factors that define its current state, list down the factors needed to reach its target state and then plan on how to fill the gap between the two states.
This is important because it helps to identify if a company is performing to its potential and if not performing, why it is not performing to its potential. This helps to identify flaws in resource allocation, planning, production etc.