Gap analysis

Written by Fmi.Online Friday January 6, 2023
Gap analysis is an assessment tool that measures the difference between the current result and the expected result. It is a diagnostic tool that identifies the current requirements to achieve the goal.

Explanation :


These analyses are often employed as a performance assessment tool that helps an organization, or even an individual, to identify what steps need to be taken in order to achieve the expected result. To create a gap analysis a goal must be set first. This goal will establish the target to where all efforts should be directed. Then, the analyst can estimate the current stage, by analyzing present results. This can be illustrated graphically or numerically, but the goal can be qualitative. This means that the goal can be measured in numbers but the goal itself might be qualitative. After identifying the size of the gap, strategies should be suggested to reduce the gap. These strategies must have an impact on current results, to bring the current result’s line closer to the expected result line. These analyses are applicable to all kinds of organizations and they are widely useful for all the different areas and departments, since all of them have goals and expected results to be achieved.

In a nutshell :

  • A gap analysis is how an organization examines its current performance with its target performance.
  • A gap analysis can be useful when companies aren't using their resources, capital, or technology to their full potential.
  • By defining the gap, a firm's management team can create a plan of action to move the organization forward and fill in the performance gaps.
  • There are four steps to a gap analysis, which are defining organizational goals, benchmarking the current state, analyzing the gap data, and compiling a gap report.
  • Gap analysis can also be used to assess the difference between rate-sensitive assets and liabilities.
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