What is GAP Analysis? How to conduct it and why is it essential?

Contrary to popular belief, one of the biggest challenges in project management is not the lack of goals but the lack of clarity as to why – despite a planned strategy and approved plans – the results are not as expected. If you are wondering what exactly is standing in the way of achieving these goals, GAP analysis is the perfect tool to organize your thinking and translate your strategy into real action. Let’s get started!

In this article, you will learn:

What GAP analysis is and what it identifies.
How to determine the current (As-Is) and desired (To-Be) states.
How to compare states to find gaps and their causes.
Steps to plan corrective actions and solutions.
Why GAP analysis is essential for understanding processes and improving results.

What is GAP Analysis and what does it identify?

Although many organizations and projects have clearly defined goals, the results often differ from the assumptions. Instead of reading tea leaves, you can easily check how far you are from where you want to be. The key to success is Gap Analysis. What is GAP analysis? GAP analysis involves comparing the current state with what is considered the desired state. Its purpose is to identify differences – so-called gaps – that hinder the achievement of results. From a practical point of view, this means looking at processes, results, resources, and competencies and then identifying areas that need improvement. All this is done in order to answer three key questions:

Where are you now, i.e., what is your current level of results, processes, or competencies?
Where do you want to be, i.e., what is the expected level in this area?
What is standing in the way, i.e., what is causing the discrepancy between these two states?

In practice, GAP analysis is used to identify gaps – that is, differences between how an organization or project currently operates and how it should operate in order to effectively achieve its goals. However, it is worth remembering that organizational gap analysis does not focus on evaluation but on understanding – where the gaps are and why they hinder the achievement of goals. It can be applied both on a company-wide scale and in relation to a single project or process.

This makes GAP analysis ideal for sales, finance, HR, IT, and project management. Best of all, it can work wonders both at the operational level, close to everyday work, and at the strategic level, when looking ahead to the future.

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Key stages of conducting GAP analysis

Although GAP analysis may sound complicated, its logic is surprisingly simple. It involves understanding why a certain problem keeps coming back like a boomerang, even though the goals are known and the actions are – in theory – planned.

How to conduct GAP analysis? The first step is to look at how processes work and what results they bring. Then, simply define the goals that the organization wants to achieve. After comparing these two pictures, it becomes clear what is lacking and what actions can help to bridge the gap.

Step 1. Determine the current state

Start by taking a realistic look at how the organization functions here and now. Analyze what the processes look like and what results they bring. Think about where difficulties, delays, or inefficiencies arise. Process mapping can be helpful here, as it allows you to see the entire course of activities step by step and quickly identify areas where something is stuck or unnecessarily complicated. Psst! At this stage, it is worth relying on data and observations rather than assumptions. Also, remember that the better you describe the current state, the easier it will be to identify specific gaps.

Step 2. Define the desired state

It’s time to determine the direction in which the organization is heading. This involves clearly defining goals – ones that are understandable and measurable. The desired state should be ambitious but also realistic. Be sure to consider the available resources, competencies, and organizational constraints. A well-defined goal is one that leaves no doubt about what you consider to be success.

Step 3. Compare both states and identify the gap

Once you know both the current and target states, it’s time to get to the heart of the GAP analysis. By comparing both perspectives, you will quickly see where the differences lie and how big the gap is that needs to be bridged. Don’t be afraid to call a spade a spade. Clearly identify what exactly is missing: resources, competencies, tools, time, or perhaps consistent processes? The more precisely you describe the gap, the easier it will be to plan meaningful actions.

Step 4. Fix what isn’t working

Competency gap identification and addressing other deficits is only half the battle. It is equally important to understand their source. Is the problem due to a lack of relevant skills? Or is it caused by an inefficient process or unclear roles and responsibilities? Once the causes are known, it’s time to start looking for solutions. Don’t limit yourself to just one option right away. After all, not every solution, even if it sounds reasonable, will be cost-effective or achievable. Compare the available options in terms of their advantages, costs, risks, and potential effects. Remember that GAP analysis only makes sense if it leads to concrete decisions and real changes, and not just good-looking numbers on paper.

At this stage, a properly selected project management system can provide great support in organizing your activities. It will allow you to easily translate the conclusions from the analysis into specific tasks and responsibilities.

Current State (As-Is) vs. Desired State (To-Be)

The heart of GAP analysis is comparing the current state (As-Is) with the desired state (To-Be). The former clearly shows what reality looks like: how teams work, what the results are, where bottlenecks occur, what works well, and what struggles to function. The desired state, on the other hand, is a vision of the future, but not a pipe dream. A well-described To-Be is specific, measurable, realistic, and time-bound. When you compare both states side by side, the gap ceases to be abstract and takes on a very concrete dimension, e.g., a lack of competence in a given area.

GAP Analysis in practice - application in projects and processes

When it comes to projects, GAP analysis is often used to assess the effectiveness of the activities carried out. What is more, it allows you to identify barriers that slow down progress. In practice, it can apply to both quantitative and qualitative results, such as:

completion time
project time performance
quality of results delivered

In addition, GAP analysis can be successfully used to compare processes implemented in different parts of an organization. It is also a great starting point for comparing your own solutions with those that work for your competitors. In such situations, business process modeling helps to “map out” how the organization works and see in black and white which elements actually bring it closer to its goal and which only add to the workload.

Why is GAP Analysis essential? From strategy to implementation

Are you wondering what the importance of gap analysis is in practice? One of the biggest advantages of GAP analysis is that it effectively organizes thinking, clearly indicating what exactly needs to be improved and where to start. All this is done to help you move smoothly from general assumptions and ambitious plans to specific decisions and actions. This makes it easier to understand how the organization functions on a daily basis and to identify the sources of problems. Often, it is not a lack of commitment or ambition, but unclear processes or resource shortages.

Why is this tool so highly valued? Firstly, it allows you to better understand the organization, rather than relying solely on intuition. Secondly, it facilitates fact-based project planning. Thirdly, it helps to increase efficiency by eliminating real barriers. But that’s not all! GAP analysis also allows you to identify problems before they escalate into disasters, thus reducing risk.