Gap Analysis

Gap Analysis is a method used in business intelligence to compare actual performance with potential or desired performance. If a company’s sales target for the month is $50,000 but they only make $40,000, gap analysis helps figure out why there’s a $10,000 gap and how to close it. Think of it as a tool to identify the distance between where a business is and where it wants to be.

This analysis involves looking at the current state, defining the optimal future state and then finding out what needs to be done to bridge the gap between the two. It’s kind of like knowing you’re in New York and you need to be in Los Angeles, so you use gap analysis to plan the best route to get there. The analysis could cover different areas of business, such as sales, operations, or customer service, depending on the objectives.

For businesses, gap analysis is a powerful way to pinpoint specific areas that need improvement, develop a deeper understanding of the challenges they face, and create targeted strategies. It’s all about diagnosing problems effectively and paving a clear path toward growth and improvement by making informed decisions based on data-driven insights.