Gap analysis is one of the most important modern business solutions powered by data analytics.
What is gap analysis?
Gap analysis is the business practice of identifying the gap between where your business actually stands and where you expect it to. It is the difference between your current performance and your target or desired performance.
The goal of gap analysis is not just to identify gaps but to enable your management to re-adjust strategy, or come up with a new one, to close them. Gap analysis ensures that your business is always accomplishing its goals and running at its full potential.
Gap analysis consulting offers general solutions instead of particular ones, which means it enables you to identify gaps across a variety of business practices, whether it is sales analytics, quality control, employee satisfaction, investment research, revenue forecasting, or competitive analysis.
While SGA’s world-class gap analysis services cover them all, competitive analysis is one of our most popular offerings.
Competitive gap analysis: An overview
A particular kind of gap analysis, competitive gap analysis is the practice of identifying gaps between your performance and the performance of your competitors, with the intention of taking strategic actions that close them, and even exceed them to gain a competitive edge.
The practice has tremendous value, especially today, because it is integral to ESG research — the part of market research that deals with identifying ways to create Environmental, Social, and Governance value.
Given that most investors today wish to invest responsibly and expect corporations to prioritize sustainable growth, the demand for ESG consulting has risen sharply, having shown demonstrated success in driving long-term, sustainable growth.
More on ESG: “Saved More Than $2 Billion” — How Materiality Assessment Transforms Businesses
In other words, competitive gap analysis allows you to benchmark your business performance with the performance of your rivals. The key difference is that at SG Analytics, our approach is thorough and comprehensive.
Our gap analysis services offer insights that are informed by a vast variety of KPIs related to a competitor’s —
- Performance parameters like productivity, efficiency, and customer satisfaction
- Sales forecasts
- Marketing data
- Revenue
- Investment portfolio
- Market share
- Innovation
- Management practices
- ESG value
And much more. The result is a clearer, more measured understanding of what your competitors are doing better and definitive steps to match and outperform them.
Gap analysis consulting: A guide
Gap analysis consulting at SG Analytics involves four distinct steps:
- Identification
- Benchmarking
- Analysis
- Action
Let’s take a look at each.
Identification
The first step is perhaps the most important step — the identification of goals, objectives, or targets in relation to which the gap would be measured.
These are identified through interviews, brainstorming, questionnaires, and so forth. But most importantly, the goals or targets ought to be quantified or measurable.
Only then can the gap be measured. And only then can we know if we have filled it.
Benchmarking
After the targets have been identified, consulting involves the collection of historical and current data that tells us where your business currently stands in relation to those outlined targets.
This involves measuring the KPIs that reflect your current performance (see above).
The data is then benchmarked with the data that would have reflected your expected performance.
Here, the gap is identified. But benchmarking only answers the question of how big the gap is.
Analysis
Analysis answers the question of why the gap is so big.
Analysis involves identifying quantitative and qualitative reasons that explain why expectations have not been met.
This is perhaps the most strenuous part of gap analysis consulting since it requires tremendous focus and creativity, in order to accurately distinguish causes from correlations.
But it is also the most rewarding since it provides management with insights into their shortcomings or weaknesses. It outlines what is a frivolity (relatively) and what ought to be a priority.
Action
Once the factors hindering your growth have been outlined, once your shortcomings or weaknesses have been identified, consulting offers definitive, data-driven actions you can take to eliminate or overcome them.
Actions simply are steps that help you fill the gaps identified by benchmarking. This could include re-allocating time, money, and other business-critical resources in a measured manner.
It could also mean improving management and HR by being more inclusive, and fair.
That is growth.
