GAP ANALYSIS

DEFINITION OF GAP ANALYSIS

There are at least two ways to view "gap."

1. Result Gap ” A result gap is the difference between the company performance and the performance of the best in class as determined by the benchmarking process. This gap is defined in terms of the activity performance measure. The gap can be positive or negative.

2. Practice or Process Gap ” A practice or process gap is the difference between what the company does in carrying out an activity and what the best in class does as determined by the benchmarking process. This gap is measured in terms of factors such as organizational structure, methods used, technology used, or material used. The gap can be positive or negative.

The determination of a gap can be a strong motivator toward the improvement of performance. It can create the tension necessary for change to occur.

CURRENT VERSUS FUTURE GAP

It is critical to distinguish between the current gap and the likely future gap. Remember that the benchmark partner's performance will not remain at the current levels nor will the expectations of the marketplace . More likely than not, performance will improve as time goes on. A company that concentrates only on closing the current gap will find itself in a constant game of catch-up.

The company that ignores likely improvements of the benchmark gets caught in the Z trap. The Z trap, of course, is the step-wise improvement that is OK for catching up but never good enough to be the best in class.

To summarize the benchmark findings, it is often helpful to make a tabulation showing the current practice and metric and the expected future practice and metric for the company, the competition, and the best in class. In order for the benchmarking process to be effective, it is critical that management accept the validity of the gap and provide the resources necessary to close the gap.