Advantages & Disadvantages of a Gap Analysis

An organisation performs a gap analysis to measure its actual performance against where its goals. Companies can identify gaps from a variety of perspectives including skills, business direction, business processes, information technology or organisation-wide performance. The gap analysis process entails conducting an assessment and documenting the findings. The firm must first acknowledge and approve the differences between the company's future needs and current competencies. As with most evaluations, the process has its pros and cons.

Organizational Overview

A gap analysis can give decision makers a comprehensive overview of the entire company or a particular function, such as accounting, information technology or operations. This allows directors and executives to determine whether the department or organisation has the resources to meet their mission, goals and objectives. For example, a school may perform a gap analysis to gain insight into where it stands relative to the implementation of a school improvement process. This type of overview helps the organisation identify gaps, analyse the factors that led to the current situation and outline the foundation required for improvements to take place.

Establish Priorities

On completion of the overview, the organisation can evaluate the data and segregate the most relevant information for ranking desired outcomes and objectives. The gap analysis helps a firm focus its efforts and make informed decisions. In addition, a company can allocate limited resources and design efficient budgets by taking into account its main concerns. Priorities are categorised as high, medium and low; the classification does not necessarily mean the priority has ranking over others for attention or resources, but may help when conducting further investigation into issues.

Project Costs

Time and cost represent two of the major disadvantages of conducting a gap analysis. Typically, an organisation will bring in a consultant to perform the assessment; even so, participation takes valuable time away from employees who participate in the project. In addition, directors and managers must also engage in the exploration and evaluate the results. Depending on the results expected at the commissioning of the analysis, it may be more cost-effective to ask managers and supervisors their opinions on potential gaps or areas of deficiencies.

Morale

Bringing in a consultant to conduct a gap analysis could result in apprehension or suspicion, which may ultimately affect staff morale. This is especially true if the process evaluates employees' skill sets. Make an effort to communicate the purpose of the evaluation to employees; explain how the project benefits them and the organisation. This might help them understand the importance of the analysis and alleviate some concerns. Consider heading off possible tension by asking key individuals to work with the gap analysis team; they could lend their experience or expertise by acting as liaisons for their departments.

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About the Author

John Landers has a bachelor's degree in business administration. He worked several years as a senior manager in the housing industry before pursuing his passion to become a writer. He has researched and written articles on a wide variety of interesting subjects for an array of clients. He loves penning pieces on subjects related to business, health, law and technology.

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