Gap Analysis: What is it and Why is it Important in Project Management?

No matter how much planning you do, when you run a project, you may still face some challenges. The solution is that you need to have the right tools to help you plan. Understanding whether your project is on track is important and understanding how to do it is simple. Gap analysis can be helpful and not difficult to understand.


1 What is Gap Analysis?
2 How Can Gap Analysis Help You?
3 Examples of Gap Analysis
4 Ways to Do a Gap Analysis
4.1 Identify the current state
4.2 Identify your future state
4.3 Identify gaps
4.4 Identify how you will bridge the problem as it occurs
5 Ways to Apply GAP Analysis to Your Project or Business
5.1 1. Review your current state
5.1.1 Analisis SWOT
5.1.2 Fishbone diagram
5.1.3 McKinsey 7S Framework
5.2 Model Nadler-Tushman
5.2.1 Analisis PEST
5.3 2. Know your future situation
5.4 3. Identify gaps and potential solutions
5.5 4. Execute the final plan

What is Gap Analysis?

In the short term, Gap analysis is the process that project managers use to compare actual versus expected performance. Any organization will benefit greatly from this, regardless of whether the company meets expectations or uses its resources well.

Using the Gap analysis template means that you understand how the company does the whole plan and what activities need to be done. This analysis is usually done when you want to know how the project is progressing. It’s important to do this regularly, especially when on a large project

Here are some details that will help you better understand what Gap analysis is:

  • The method used to describe performance.
  • It’s good to compare the current situation with the expected one
  • Used to find strengths and weaknesses
  • Can help create better processes
  • Show all activities to stakeholders or  stakeholders

Since it can be used by project managers to find problems and communicate them to make progress, knowing what gap analysis is is important. There are various methodologies used for this analysis, and we will discuss them in this article.

How Can Gap Analysis Help You?

The main use of this analysis is to control various aspects of the project with data. This is important because:

  • Gap analysis will help you identify any gaps that need to be addressed. It may be easier to measure or identify them and in the long run, and will help in making improvements.
  • Performing a gap analysis will increase the efficiency of your business. This will show whatever harm is going on. When you’re done, you’ll be able to focus more on what resources and opportunities need to change.
  • Using a gap analysis tool can also help you have an overview of the entire company or at least a specific function. This helps managers see if the organization has sufficient resources to fulfill any plans that have been made.
  • You can also use this analysis as a tool to compare performance against potential. Knowing the details that show how many products or people are unproductive is very important.
  • The gap analysis process means you will have more data on how to improve. For example, when used in manufacturing, this analysis can help manage resources. By resource we mean money, material or human resources.

Example of Gap Analysis

e-commerce gap analysis

Even though the business world has many areas, from sales, to customer service, and so on, we can still use gap analysis frequently. Here are some examples that show the range of how companies can use this analysis:

  • When a company launches a product, it can also perform a gap analysis to determine why sales are not working as expected.
  • When organizational productivity does not meet expectations, this analysis can be of great help and discover what needs to be changed.
  • If a company is short on supply or resources, it can perform a gap analysis to find the reasons why this is happening.
  • This analysis can also be used to identify whether a product meets the required target.
  • It can also help find better market segmentation by comparing forecasts.
  • Another use could be to examine the product portfolio to find new sales opportunities. In the short term, this means that companies can find new products to sell.
  • Another thing they can do is understand why certain products are not selling well.

Also read: Conflict Management: Definition, Skills, List, and Examples

How to Do a Gap Analysis

gap analysis template

Next, we will discuss how to perform a gap analysis based on the five steps described below. From now on, you will know exactly what to do when doing this analysis.

Identify the current state

Improvements in data usage help organizations check how they are performing. Different information coming from the sales department or production house can all be tracked easily.

This helps in creating specific data points that companies can use to check their position and performance. Understanding where you are now helping create a more realistic plan of action.

You can also check if any progress has been made towards the desired state. If you don’t know where to start, it can be very difficult to measure progress toward a particular goal.

Identify your future state

As a project manager, you need to find the goals your company wants to achieve. Setting goals means you will know exactly where your company wants to go. Get started with the gap analysis template given to you and see how it works.

Future goals are probably one of the best things you can set for an organization. This is because, to achieve it, a lot of effort needs to be put in.

When you do a gap analysis for your strategic plan, check all the details. A good place to look is the target on your plan.

These targets can be from the next two to five years. Always ask yourself where you are now and compare it to the data you collect.

Identify gaps or gaps

If you know where you’re headed and where you’re starting, the space between the two points is the execution part. You can also call it a gap or gap.

Dig deep and determine the details of why the gap occurred. Ask yourself questions that apply to your business. Try to answer correctly and don’t lie to yourself.

Be more specific about that. If your income per employee is 50,000,000 less than your plan, why is it happening? Are there problems in your workflow, with your customers or with the price range?

Identify how you will bridge the problem as it occurs

After you conclude the problem that occurred, your next step should be to analyze the problem. It is important to understand why this is happening and what you can do to achieve your goals and objectives.

Decide what you need to change and determine the steps required for it. Create an end date for when you want the issue resolved.

If you don’t have an end date for a particular process, that’s a bad thing. Choose a completion date, even if it is far in the future. The final step is to set milestones to ensure your success.

How to Apply GAP Analysis to Your Project or Business

1. Review your current state

First, you need to know which areas to apply a GAP or gap analysis to. You also need to find out where you and your organization are before making plans to reach your future goals.

Say you are a shoe salesman and your overall organizational goal could relate to being the top shoe brand on social media.

However, you receive a note from your sales team that your shoe sales have declined over the last quarter and that competitors have more followers on their accounts.

Therefore, consider asking yourself if there is a problem with the product you are selling or if you need to allocate more resources to the sales and marketing team to generate sales or followers.

You will only know the answers to these questions by talking to top people in each department and critically evaluating your key performance indicators (KPIs) to identify exactly where your brand is in the market.

To get started, use a gap analysis tool to help you gather relevant information. Here is an example of a gap analysis tool:

SWOT analysis

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a GAP analysis method that was developed specifically to determine the internal and external factors that impact on the effectiveness and success of the company.

By identifying these four factors, you will be able to determine the best solution by leveraging your strengths and allocating resources accordingly, while minimizing potential threats.

Fishbone diagram

This chart explores the root cause of the problem you are facing and is the diagram to use if you are assessing the current situation.

Measurements, materials, people, machines, methods and the environment are common concepts used to measure the state of your business.

McKinsey 7S framework

This framework is based on seven people-centered groupings to examine business characteristics, including structure, strategy, systems, staff, skills, styles, and shared values.

When using this model, you must fill in the current state and future state for each category to determine where the gap exists. Then, you can design targeted solutions to address those gaps.

Model NadlerTushman

The Nadler-Tushman method is an organizational fit model that studies how different processes in a business organization work together and the effect of gaps on its overall operational efficiency.

It examines this gap by evaluating the company’s operational systems and categorizing business processes into three types: input, transformation and output.

Factors that are considered as inputs include the resources used, operational environment, and corporate culture, while transformation involves people, systems, and activities that exist today to transform inputs into outputs.

Output is the result of the process defined by the business. These three categories must be congruent to generate and sustain productivity from your staff.

Analysis PEST

This tool is similar to a SWOT analysis in that it provides the necessary structure to examine threats and opportunities for your business.

However, PEST allows you to highlight opportunities for change and minimize threats prevalent in your market.

Consider doing a PEST analysis after a SWOT analysis to see if you have additional opportunities and threats and then identifying how you will act on the information presented with this tool.

2. Know your future state

Once you fully understand the functioning of your organization, determine the ideal circumstances for your organization. This step is not where you outline how you will get there.

You have to take an idealistic mindset to figure out what peak looks like to you. Be sure to include feedback from your employees on what they would like to see happen with the company and how they would like to be involved in scaling your organization.

Your ideal future state would be to control the lead generation process to give your sales team more time to make calls during business hours.

In this case, your sales team’s performance is not meeting the standards you have set for them, but recognizing the ideal situation for your staff shows that you are making a concentrated effort to increase their sales and increase the number of clients doing business with you.

3. Identify gaps and potential solutions

Putting together the first two steps shows what you still need to achieve your goals. This step is when you and your leadership team choose what solutions can bridge your organization’s performance gap.

Therefore, your decision on how to bridge may depend on whether you seek guaranteed control over success versus the cost of achieving your goals.

To refer back to the sales example, see how your team went from a sales team that didn’t meet its sales goals to one that exceeded its targets and provided excellent customer service.

Some options to consider in this scenario are:

  • Hire interns to help enter leads into the CRM system.
  • Re-evaluate the workload of your salespeople and see if a new sales force is needed to bridge the gap.
  • Concentrate your sales staff’s sales efforts on well-known clients who can generate more revenue for the company.

4. Execute the final plan

Work closely with your leadership team in communicating with your team about plans to scale up the organization.

Thus, their feedback becomes important and can provide insight into the intended strategy that may not have been discussed before.

Overall, you will have the final say, and your changes will affect specific teams differently. It’s important to keep SMART goals in mind when formulating a clear, actionable goal strategy that is set up for your staff.

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