Operational Excellence Gap Analysis

Introduction

Gap analysis is a tool for companies to compare actual performance with potential performance asking two questions: "Where are we?" and "Where do we want to be?"  If a company or organization is not making the best use of its current resources or is forgoing investment in capital or technology, then it may be producing or performing at a level below its potential.

The goal of gap analysis is to identify the gap between an optimized allocation of resources and integration of inputs, and the current level of allocation. This helps provide the company with insight into areas which could be improved. The gap analysis process involves determining, documenting and approving the variance between business requirements and current capabilities. Gap analysis naturally flows from benchmarking and other assessments. Once the general expectation of performance in the industry is understood, it is possible to compare that expectation with the company's current level of performance. This comparison becomes the gap analysis. Such analysis can be performed at the strategic or operational level of an organization.

Gap analysis can be conducted, in different perspectives, as follows:

  1. Organization (e.g., human resources)
  2. Business direction
  3. Business processes
  4. Information technology

Gap analysis provides a foundation for measuring investment of time, money and human resources required to achieve a particular outcome.

A Gap Analysis tool for assessing operational excellence can be downloaded from the Resource Manager.


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