Gap analysis for business process improvement is a vital step to meeting strategic business goals. Here’s what you need to know to perform an effective gap analysis.
What is a business process?
A business process is a series of tasks that employees within an organization repeatedly perform to create a product or service. It starts with an objective and ends with the achievement of a goal, which provides value for the stakeholders.
What is business process improvement?
Business process improvement is the collection of methodologies to identify, analyze and improve on the existing processes within an organization so as to achieve organizational objectives in a more efficient way. Examples of business process improvement initiatives include automation of manual processes using workflow, reduction of waste in production processes, redesigning of employee responsibilities, and streamlining of the approval processes. Typical methodologies that are used for business process improvement include Six Sigma, Lean, Scrum, Kaizen, and Total Quality Management.
The steps typically involved in business process improvement are:
- Identifying the business process – After deciding on which process needs to be improved; the process can be documented using a process flow diagram.
- Analyzing the business process – Use the process flow diagram to investigate the problems within the process.
- Redesigning the business process -The process is now redesigned to eliminate the problems that have been identified.
- Acquiring project resources – Resources needed for implementing the improved process will need to be secured at this stage and can be part of the project team.
- Implementing the changes – After acquiring the necessary resources, the changes to the business process can be implemented and may involve changing existing systems and processes.
- Reviewing the business process – To ensure continuous improvement after implementing the changes, there is a need to monitor the progress to ensure that the process is performing according to expectations.
What is a gap analysis?
Gap Analysis is the comparison of actual performance with potential or desired performance i.e. the current state with the desired future state for a business process. The current performance of a process is compared to key metrics such as costs, time, and quality. Knowledge of the existing gaps in a business process can help the business analyst implement programs to address the shortcomings in the current business processes.
Steps to perform during a gap analysis
Step 1: Understand the current state – e.g. review business processes and discuss problems in the current environment.
Step 2: Define the desired future state – The future state represents the ideal condition in which you want your business to be.
Step 3: Identify and document the gap – A gap is a deficiency existing between what a business would like to do, and what the business actually does.
Step 4: Plan to evolve to future state – Develop a project plan for redesigning business processes to ensure that they align with the organizations’ strategic goals.
Gap analysis tools and techniques
A series of meetings can be held for the business analysis team to brainstorm ideas about the problems that exist in the business process and how to resolve them.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The weaknesses and threats that are identified should be the result of gaps existing in the business process.
Benchmarking is the process of comparing the current project, methods, or processes with the best practices used by other organizations and using this information to drive business process improvement.
Review the documents such as functional requirements documents, process flow diagrams and change requests help to obtain more information on the current business processes within an organization.
Benefits of performing a gap analysis
A gap analysis can help an organization understand and prioritize business needs by helping identify any deficiencies or shortcomings that need to be overcome. It gives decision-makers a comprehensive overview of the entire company or particular function such as accounting, information technology, or operations. Conducting a gap analysis can also help a business focus its efforts and make informed decisions on business process improvement. It can provide clarity on where an organization is and where it wants to go, baselined against project delivery best practices that can add real value to the business. Finally, a gap analysis establishes the link between the requirements and their traceability in the Requirements Traceability Matrix.