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hello and welcome to today's lesson where we're looking at how to perform a gap analysis we'll go through the theory and then they'll look at a simple example too so gap analysis is a simple tool which is used by organizations to raise their performance level imagine that you're hiking along a path when you come across a three-way Junction now which direction should you take well that depends on where you want to get to now armed with the knowledge of where you want to get to it becomes much easier to work out the necessary steps you'll need to take to reach your final destination including which of the three junctions you should take right now now that simplistic analogy is the same basis upon which gap analysis works a gap analysis can help an organization to understand where they want to be the gap between where they are now and where they're going to be and hence what steps they should take to close that gap now the concept of a gap analysis is illustrated in the diagram you can see here and you can see from it that to get from our current state to our desired state there will need to be a number of key steps we need to take to bridge the gap now from this will create an action plan outlining the exact actions we'll take to achieve each step so that over time the gap becomes completely closed and we've reached our desired State now gap analysis is a general tool and what I mean by that is that it can be used at different granularity so for example you could use it as an organization level you could use it as part of project management or you could use it for strategy development there are all kinds of different levels or granularities you can use it at gap analysis will often focus on one of one or more of the following perspectives organizational perspectives so for example what skill sets or roles are missing or lacking from the organization now the business direction perspective so for example is there a gap in our product or a gap in the market that we're not currently serving gap analysis can be used from a business process perspective so for example how can we how can the things we do be made more efficient and gap analysis can also be looked at from a technology perspective so for example are there systems that were missing or are there incompatibilities between existing systems now there are many similar methods to perform a gap analysis but the process we will present in this video consists of five steps which you can see in the diagram which are step one describe the general area to identify a specific improvement areas three determined targets four determined current stage and five determine the action steps so step one disconnect describe the general area in this step we describe the general area that we want to analyze and improve now this may seem like an unnecessary step but by performing it we not only highlight what area is under investigation but also it informs people what areas are not under investigation and that helps avoid scope creep and it keeps the rest of the analysis very focused so for example we might decide to analyze our online marketing efforts and that obviously implies that we're not investigating our offline advertising such as print and television so by being very clear about what we are and what we are not investigating it keeps everyone on the same page step 2 identify specific improvement areas now in this step we identify specific areas for improvement within the general area we described in step 1 so for example if the general area we're investigating is our online marketing then we may by content creation and paid advertising as specific areas we'd like to improve so step 3 determine our targets and as we've now identified our specific improvement areas the next step is to set targets for each of those specific areas now a common input to this step is to use benchmarking so looking at how other companies are doing to find your areas of weakness or maybe analyzing industry best practice is another input you could use now what targets you set will depend on a comet a combination of things such as the time available to address the gap as well as the ambition of the organization and how far you are you know industry event industry best practices and the benchmarking you may have done step 4 determine current status now that we understand where we want to get to it's also important to understand where we are before putting the plan together so by understanding where we are it makes it more likely we'll create a realistic plan of action it also makes it easier to see if we're making progress towards our desired stage because if we don't know where we started then it's very difficult to know if we've made progress and if we have made progress how much progress have we made it's very difficult to know that if we don't know where we're starting from now the difference between step four and step three is our gap and that basically the gap between where we are and where we want to be so the final step is step 5 to determine the action steps and now that we understand the gap we use this final step to describe the improvement steps we'll take to close the gap and get where we want to be now in essence this step is our action plan to get where we want to be and it should be prioritized so its deliver the biggest return on this could be done by prioritizing the most critical gaps first or you could target you know low-hanging easy-to-reach fruit first it's up to you but it should be prioritized to deliver the biggest return to the organization so let's look at a simple example to bring this to life now for the purpose of this example suppose we work for an electronics company and we're investigating the customer satisfaction of customers who return faulty equipment to us would in warranty for repair now the first step is to describe the general area we are investigating so you can see that in the diagram here we are investigating the customer satisfaction of faulty goods returned within warranty we're not considering customer satisfaction outside of warranty nor the satisfaction of customers at the point of sale so as you can see we're concerned only with faulty goods returned during warranty if we weren't explicit in stating the area under investigation then it's possible you know that there could be some confusion within the organization that we work for around the scope of this gap analysis so the second step is to identify specific improvement areas and for the purposes of our example we identify two specific areas we want to improve so firstly customer satisfaction rate that is the percentage of customers that are satisfied with the service they receive and the pair time and that's the total time it takes to repair the faulty product and return it to the customer so we update our gap analysis to reflect this the third step is to determine targets for each of these metrics and the company decides to benchmark its best competitors to do this now from doing this it determines that to compete with the best in the industry it should be aiming for a customer satisfaction rate of 99% and repair time of 12 days and it decides basically to choose these values as its targets for these areas and you can see that reflected in this diagram here so step 4 determine the current stage so now that we know the targets we want to achieve in this step we assess where we are currently against those targets now unfortunately for this company in our example it doesn't currently benchmark customer satisfaction but it does know that the average of her time is 16 days so we update our gap analysis template to reflect this and that's it we have reached step 5 where we determine the action steps and that's where the company describes the actions it will take to close the gap between the current stage and a desired stage now because this company has no data for customer satisfaction rate it decides the first step is going to be to benchmark the current situation and then review the findings of this analysis now to improve the repair time metric and get it in 12 days the company decides to implement a new repair system and train staff how to use this new system now through the completion of its gap analysis the company has clearly articulated the exact metrics it wishes to improve and by how much it wishes to improve them it has understood exactly where it stands now for each of those metrics and it has created a solid action plan to address the gap between the current stage of each metrics and the desired stage so that is it all that remains for the company now is to action each of those action steps to eventually close the gap and reach the desired stage now if you wish to create your own gap analysis there's a template you can download by following the link below this video so in summary a gap analysis is a very simple tool which is used by organizations to raise their performance it can help an organization identify where they want to be where they are now and how to get there so that is yes I hope you enjoyed this lesson and I look forward to speaking to you again soon