Tuesday, 06 November 2012 03:49

Do We Need a Mature GAP Analysis?

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How many agree that the Scope for a business analysis has moved from the silos of applications to a strategic level. The boundaries of business analysis have stretched to greater ranges starting from the strategy analysis to business change management. The same was not expected from a business analyst a few years back. On the way to a mature business analysis practice, I want to provide detail about my proven method to perform a GAP analysis. I have seen many articles about performing a GAP analysis but I want to provide my view on needs analysis.

These days, business analysts are hired at a much early stage by large firms. The reason being, the firms want them to get a high-level view of the business in advance. When a GAP analysis is requested, it can be due to the following:

  • A strategic change
  • Market condition change
  • Product profile change
  • Process Improvisation
  • Mergers
  • Random

 A GAP analysis should address the questions “Where are we?” and “Where do we want to be?” in a clear way.

1. Internal Capabilities Analysis

One needs to start with understanding the organization’s mission, objectives and tactics. These can be available by analyzing the documentation or liaising with the leadership team. I suggest using the M.O.S.T. technique for this particular step. Once we put forward the Mission, Objectives, Strategy and Tactics we will be in a position to analyze the direction of the organization. This generally doesn’t take more than a day and it can be done on the first day of the business analyst’s inception into the organization.

• Mission defines the sole purpose for which the firm exists.

McDonald’s states its mission as “To provide the fast food customer food prepared in the same high-quality manner world-wide that is tasty, reasonably-priced & delivered consistently in a low-key décor and friendly atmosphere.”

• Objective contains clear long- and short-term goals and demographic obligations that the firm wants to achieve. Some can confuse this with the mission statement.

For example, a bank’s long-term goal can be “To attain a high level of asset quality” or “To Reduce operational costs by 30% in 5 years.” A short-term objective can be “To reduce paper transactions to 20%” while an obligation can be “To contribute to price stability in the region.”

• Strategy generally refers to a long-term plan of action to achieve long-term goals.

An example of strategy can be “Use technological advancements to maximize performance and improve operations.”

• Tactics are short-term plans of action.

Quoting an example, “Engineer a system to cater to real time monitoring of social media posts.”
2. AS-IS Investigation

The analyst has to perform this step to gain an understanding of “Where the firm stands” or “Where the operation stands now.” Several techniques like workshops and individual interviews can be used. An ideal means is to ask the sponsor to nominate the interviewers at various levels. Once the interviewers provide details on the current business process, it can be modeled simultaneously. There won’t be many contradictions here as stakeholders are accustomed to the current business process. If any, a workshop with an agenda to clear the overlapping perspectives can help.

Complex processes can be difficult to model. Functional decomposition based on the activities performed can be supportive here. A logistics company can have varied functional departments like inventory management, procurement service, budgeting, warehousing, etc. Drilling down by department and identifying the communications between the departments can provide a view of the business. The outcome can be complemented by interviews or workshops and is used to plot the business activity models or a business process model.

Often, the task-level details are missed by decomposition, so I prefer to use a relatively new technique — process mining to identify the activity or task-level details. This is a term used to excavate process, activities or tasks from the logs available in the system. It is very effective in identifying the elements to the detail we need. Activities can be broken down into tasks with the help of this technique.

If time is not a limitation, process mining can be substituted by activity sampling. This technique involves shadowing the user, knowing the details of the activities, interactions and labeling them. From my experience, I feel that building rapport with the users is needed to create an effective outcome from the technique.

Once the details of the events, activities, tasks and interactions are available, the AS-IS model can be depicted using rich pictures or any business activity modeling technique.
3. TO-BE Investigation

This answers the question “Where we want to be.” This can be answered easily if the GAP analysis is a result of strategy change. The outcome of the M.O.S.T. analysis is to be revisited here by the analyst. There will be a great difference in the techniques used here from the as-is investigation.

The first step is to identify the stakeholders for the interview, which can be done by nomination. It is best to include an end user, vendor and any middleman to achieve the effective outcome. Interviews can be substituted with workshops as brainstorming produces a large pool of ideas. The M.O.S.T. analysis should be the opening for the discussion. This is not a debate to change the elements of the M.O.S.T. technique. A suggestion while using the workshop in this step is to use the Greenfield analysis as a co-technique. This technique involves the users to overlook how the organization is functioning currently and ideate the business process, as if the business is to be setup anew. The outcome of the workshop can be needs along with non-agreement over many items. Every need can be actively questioned as to why it is required rather than consuming it readily.

To bring up agreements across stakeholders, we can use the technique CATWOE. This technique uses the items customer, actor, transformation, world view, owner and environment. World view is the perspective obtained from the workshops or interviews. Transformation addresses the process on how the world view can be achieved. In case of non-agreement over stakeholders, we will have diverse world views and different transformations. The next step will be to showcase how each non-agreeable view is transforming the business process. If the analyst doesn’t have a time constraint, he can create different business activity models or business process models based each world view.

From my experience, I found an average of two to three views while performing the to-be investigation. Once the activity models are available, a brief discussion can be set up with stakeholders to come to an agreement by stating “What will each view result and how the objective is impacted.” After an agreement over the needs is obtained, the business activity model is put forward. 
4. Identifying Gap

Once the to-be and as-is models are available, the gaps can be identified. This analysis doesn’t stop with identifying the GAPS. One has to clearly elicit the requirements to bridge the GAP, estimate the timelines to address them and perform a comprehensive impact analysis. Metrics or percentages on impact analysis and value analysis is required to make this more effective. Many templates are available on the Web to cater to the needs of the analyst here. A suggestion is to prioritize the requirements based on the outcomes of the M.O.S.T. analysis. This is further followed by a feasibility analysis, requirement management and change management.

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Tejasvi Chandrarkar Addagada

Tejasvi Chandrarkar is a Sr. Business Analyst and a consultant with close to eight years of experience in assisting customers achieve their strategic goals. Currently, he offers consulting services to financial institutions on retail and corporate banking specifically in enterprise Analysis, business benefits management, business process analysis & workflow modeling and vendor analysis. Tejasvi blogs on the trends in business analysis, regulations and technology disruptions in financial industry. Tejasvi provides Domain consulting services, customized solutions across retail banking, Mortgage lending, Consumer lending and business banking.


0 # Noel Joseph 2012-11-07 03:23
An article which speaks about the required approach to be taken as a Business Analyst. Tejasvi rightly suggests of using the M.O.S.T. technique ( Mission, Objectives, Strategy and Tactics ) which will maske us in a position to analyze the direction of the organization. He rightly says that once the to-be and as-is models are available, the gaps can be identified.
A very good thought process covered by Tejasvi based on his exposure and expertise and knowledge on the subject.
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0 # Tejasvi Addagada 2012-11-16 07:30
Its great to know that you are impressed with the M.O.S.T technique's Importance. I often bring this up in my discussions when needed.
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+2 # Alexis Kingsbury 2012-11-08 01:19
Great article! I'd definitely agree that "the Scope for a business analysis has moved from the silos of applications to a strategic level", and, as a business consultant, I'd say that there has been a shift from strong as-is analysis (with a weak To-Be analysis) to a far more balanced approach too.
With regard to technique & methods, you may find that interviews can be effectively supplemented (either to provide a wider sample, or more focused interviews) by a gap analysis survey using a tool such as www.spidergap.com
Have you tried this?
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+2 # Tejasvi Addagada 2012-11-09 00:23
Alexis, Thanks for your comments. I have heard of the tool and experienced it today. The interface is looking good and is easy to use. The tool is more aimed at projecting the gaps in a more visible sense and is catering to a broad industry.
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0 # Marcos Ferrer CBAP 2013-07-23 15:47
If you added an actual set of requirements (a specific example, requiring many many more hours of time that none of us have :-). It would be the best "Assess Capability Gaps" training I had ever seen.

Instead, it is the most fantastic complete expert summary of high level business need analysis and perfect drill down to discover the maximum number of requirements (drill what you DO (as-is high value work process) and WANT TO DO (to-be higher value work process), not your imagined "feature set" (decomposition) .

Decomposition can be used, but in the absence of "process analysis" can easily miss key requirements, EXACTLY as you described.

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+2 # Patrick 2013-11-05 12:46
Minor semantic.....Ca n we please stop calling it a GAP (all caps), it is not a three letter acronym (TLA). Minor detail but confuses my obsessive compulsive mind and bad form to capitalize everything.

gap analysis not GAP analysis please.
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0 # Snehal Bhadane 2013-11-05 13:22
Hello Tejasvi,

I found article interesting and can easily relate with as general reader. i am interested in pursuing career as BA. i hold 4+ yrs of exp in US mortgages starting from Loan origination, Servicing and now with corporate investment banking. Kindly guide me through.
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0 # Manikanan 2013-11-19 08:41
The article is really impressive, touching on the basis of Business analysis of any organization.
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0 # nick tibbels 2015-01-14 07:17
Really impressive document. Like the logicial flow. Very clear descriptors.
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0 # Aysha Khalil 2017-01-23 15:51
Thanks Tejasavi for sharing such valuable information about Gap analysis. in my Phd research, i am conducting gap analysis but that is not about business. i am actually doing study on transforming training of teacher educators into e-training. this study is not based only on one organization but it includes 15 universities and their current training practices and their potential use of digital technologies currently. it would be very much helpful for me if u contribute with your expert opinions about conducting gap analysis in my context. also kindly relate gap analysis and need assessment/iden tification. what is the importance and most convenient way to conduct impact analysis when we tend towards developing remedial strategy to bridge the gaps?
Thanks in anticipation. suggestions/opi nions of all the respected members are welcomed.
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