Why Gap Analysis is Essential for Business Success

In an ever-evolving market, businesses need to constantly adapt and improve to stay ahead of the curve. One of the most valuable exercises any organisation seeking to stay competitive can undertake is Gap Analysis. To put it simply, “minding the gap” can help your business stay one step ahead.

Staying relevant in today’s fluid business-scape requires constant evaluation and improvement. Failure to keep up with the competitive Jones’ is usually down to a lack of awareness of where the “gaps” are in your business. Carrying out Gap Analysis is a valuable exercise to establish the ‘root cause’ of an organisation’s lack of competitive edge, failure to enhance performance or optimise resources, or inability to break new markets or leverage emerging trends.

A valuable tool that helps businesses identify discrepancies between current performance and desired outcomes, Gap Analysis can be the key that turns on the ignition of future success.

What is Gap Analysis?

Put simply, Gap Analysis is a means by which organisations can assess their performance, both overall and broken down by specific silo. Whether that’s department, function or activity, the outputs from a gap analysis can help a business to determine its “gaps” - ie problems, failings, omissions - everything from underperforming resources to unexplored opportunities for business, investment or growth. A robust gap analysis will give a good indication whether or not your strategies are working, and objectives and targets are being met. Its findings can be used as the lever to make whatever changes are deemed necessary to bridge those gaps identified during the review.

What are the various Types of Gap Analysis?

While many companies will focus on an External or Market Gap Analysis, our (CGBC’s) focus is primarily Internal. However, the types of Gap Analysis you might come across would typically include (but would not be limited to):

• Compliance Gap Analysis
• Market Gap Analysis
• Performance Gap Analysis
• Product Gap Analysis
• Skills Gap Analysis
• Strategic Gap Analysis
• Systems Gap Analysis

How do you conduct a Gap Analysis?

A multi-step process, a Gap Analysis can be broken down into four simple steps.

Plan - Identify - Define:

Plan what you would like reviewed. Identify existing situations, circumstances, metrics, resources. Define relevance and prioritise according to department, function or activity.

Setting Objectives:

Define short and long-term objectives; set KPIs to Milestones to make achieving them more straightforward

Review:

Review the outputs - data and metrics - of the deep dive analysis; what gaps, problems, opportunities have been identified. Which do you wish to mitigate and/or leverage?

Develop a Project Plan:

Develop a plan in a simple project format, to close gaps and mine opportunities, making sure to schedule ongoing reviews and forward plan for continuous improvement.

CGBC's Gap Analysis Process

To carry out a Gap Analysis for our clients, CG Business Consulting’s team of consultants take a consultative and collaborative approach.

Our first step is always requirements gathering: meeting with the relevant client stakeholders to get a clear understanding of their concerns, needs and requirements.

Standard dependent, we would also typically perform a ‘recce’ to get a full picture of the client site - locations, circumstances, layout and resources, particularly is the GA is relevant to ISO 14001, ISO 45001 and ISO 50001, where set up and performance of resources is especially important.

Following on, we will conduct a Business Impact Assessment along with full review of the client’s processes and procedures, including assessing relevant documentation, whereby we analyse their existing business systems against the requirements of the pertinent ISO standard.

For example,

If we were to carry out a Gap Analysis on an Environmental Management System (EMS), we would aim to identify such gaps as exist between the EMS and the requirements of ISO 14001. To do this, our cross-check would identify compliant processes/procedures, non-compliant or new processes/procedures that require tailoring and/or ‘process gaps’ to bridge, for which we will make recommendations.

In order to carry out a robust Gap Analysis, a deep understanding of the clauses and requirements of the relevant ISO standard is necessary, which is why, for the best part, most companies retain the services of a trusted ISO Consulting partner, like CG Business Consulting, to carry out the review.

The Gap Analysis will include a deep dive analysis across all of the organisation’s processes and procedures, both for management and technical controls. This will include a review of pertinent data, which in the case of ISO 14001 (or indeed ISO 50001) Energy bills, any available information on resource performance such as equipment, tools and plant, Travel logs and history (mileage, mode of transport, carbon emissions), and metrics around waste (volumes, types, frequency of disposal and to where).

What is a Business Impact Assessment?

A Business Impact Assessment or BIA as it is more commonly known, forms part of a Risk Assessment commonly carried out to assess the potential impacts of disruptions, changes or outages to a business. It can be broken down into Identification, Assessment and Response.

What elements of the business are reviewed during a Gap Analysis?

Depending on what type of GA is being carried out, the review will take the form of comparing actuals with requirements or needs. In the case of ISO, the Gap Analysis will include such elements as:

• Current Resource Performance vs ISO Standard, Legal & Regulatory, Government or Industry Guidelines or Best Practices;
• Management Procedures;
• Operations vs Internal Policies & Procedures; vs External Policies & Procedures ie Supply Chain, Service Providers;
• Leadership, Senior Management, Employees - Information Gathering;
• Systems.

What is the Gap Analysis Framework?

ISO consultants work to a tried and tested two-tier formula for carrying out ISO Gap Analyses, typically involving a GA Checklist and GA Findings List.

The checklist is used in the first instance, to identify discrepancies between the existing processes and procedures and the requirements of the ISO standard. Thereafter, the findings list forms the basis of the changes to be made to achieve optimal performance and compliance.

What is included in a Gap Analysis Report?

Produced by the ISO Consultant at the conclusion of the GA, this report itemises what areas of the business were reviewed, the outputs of those reviews and recommendations/plans for remedial or mitigating actions. The report will contain both positive and negative, including previously unknown risks as well as areas of opportunity for further exploration.

A professional GAR will include specific details regarding:

• Summary of works done;
• Findings;
• Compliant processes and procedures;
• Non-compliant processes and procedures;
• Recommendations for new processes and procedures;
• Documentation;
• Conclusion.

When is a Gap Analysis usually carried out?

A Gap Analysis is usually the first step in the ISO certification/implementation process but realistically speaking, can be carried out at any time after those processes have been completed ie. As part of an annual health-check or a plan to update/enhance or integrate systems etc..

What are the Benefits of Gap Analysis?

The findings of the GA can help shape the future of your business. From providing you with a thoroughly researched, fact-based list of areas for improvement to flagging potential risks - or opportunities - the outputs will act as the basis for positive change and ongoing amelioration.

Added to that, this detailed information will help your business to enhance operational performance, produce more accurate budgets and forecasts, and meet customer and or other stakeholder expectations or updated/new regulatory requirements.

Put simply, by identifying the operational ‘gaps’, a Gap Analysis will save your company valuable time (man hours) and effort, freeing up your personnel to focus on bridging those gaps and sharpening your company’s competitive edge.

After the initial plan for change has been drawn up and effected, management will need to maintain engagement and communication across the organisation to ensure newly rolled out and/or adopted systemic or process changes are upheld. Through ongoing exchanges with staff, management can effect best practice continuous improvement of the management system, its processes and procedures and documentation.

By adopting a methodology of monitor and maintain, an organisation can ensure optimal performance - operational, resource, technological etc. - leading to business and financial targets and customer expectations being met, placing the organisation in a strategically strong position, both in terms of its market awareness and share and its competitors. It will also ensure that as a business, it is constantly risk-aware, fully prepared and always compliant with local and international laws and regulations.

How can Gap Analysis help improve my business?

A Gap Analysis will help to improve your business in many ways, including:

Resources:

The outputs of a GA will reflect resource performance - from people to equipment. This in turn helps organisations to tackle under-performing tools or machinery, and achieve better and more effective allocation of personnel.

HR:

The HR function can be included in the GA to assess suitability, allocation and competency of personnel. The outputs will help identify if the best person for the job has been allocated to the role, which skills are present/missing, and where up-skilling, cross-skilling and/or CPD is required. Appropriate/ongoing training will result in improved performance and, as a result, increased competitiveness.

Customers:

A GA will identify those performance gaps impacting customer satisfaction levels and/or customer/market targets/share, helping businesses to make the changes necessary to meet if not exceed expectations or gain better traction within their preferred market.

Sales & Profits:

An increase in performance, cus-sat levels and market share, will in turn, lead to increased volume sales and improved profit margins and revenue gain.

These are just some examples of the several ways in which leveraging the findings of a Gap Analysis can significantly improve your business. It can also help improve your operation in terms of technology, compliance, energy consumption, travel, waste management etc..

Gap Analysis with CGBC

If you’re looking to improve customer satisfaction levels, enhance resource performance or simply get an understanding of the reliability or compliance of your existing processes and procedures, why not talk to one of our consultants about carrying out a Gap Analysis?

At the start of your ISO journey? Step one is a Gap Analysis.

To find out more about Gap Analysis and our ISO Services, contact the team at CG Business Consulting on 01 620 4121 or hello@cgbc.ie.

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