What is a Gap Analysis Estimate?
Before implementing ISO standards and lean processes it is beneficial to identify where your business currently is, understand where you want it to go and the actions required to overcome these shortcomings. Many businesses will know where they want to go, but may not know the exact steps to make that goal a reality. To identify these steps, you can undertake a gap analysis. It is a study of your business that can help prioritize the work required to reduce the ‘gap’ between where you are and where you want to be. A complete gap analysis will identify not just the gaps, but their root cause and solutions as well.
There are 3 main categories that require work to reduce the gap:
- Technology – Outdated equipment, missing capabilities, or incomplete systems
- People – Unclear communications, under usage of skilled staff, or under-skilled staff
- Processes – redundancies in processes, unclear handoff between process, or unclear ‘next steps’
The gap category will determine what steps to take to reduce it and it can then be prioritized differently. Upon completion of a gap analysis, you can estimate a timeline for implementing the necessary changes in order to reduce the gaps, as well as perform a cost analysis and estimate.
These estimates will determine how long it will take to implement, and a budget to complete the necessary steps to keep in line with the business’s budget.
How accurate are the estimates?
The problem with estimates, is they are just that, estimations on timeframes and costs. Many are under-estimated because business owners forget to consider issues that may affect the ability to quickly, and efficiently, implement plans.
Take for example your people. Chances are you will find staff who are reluctant to accept change, believing what is currently working is perfectly fine. It takes additional time to bring them around to seeing the benefit of the changes, and how it will benefit them. Not only can this hold back implementation, but could add costs if they are reluctant to embrace additional training needed. Therefore, they may need even more training to fully understand the changes, while potentially creating more mistakes while trying to use the new processes and systems.
If you need additional resources and/or equipment, issues on the supplier’s side could slow down the delivery of those products. An unexpected issue could also arise with the capabilities of your current equipment, or systems to adapt to the new equipment. Although you may believe your current systems will be adaptable, without a test run it is not always a guarantee. With the speed in which technology is changing what was once capable may no longer be – incurring time and costs to find a more suitable solution.
These are just a few problems, of many, that may impact the true value of your estimates. It is essential to plan ahead by adding contingency time and costs within those estimates. This way you can be prepared for the unexpected, and have a greater chance of successfully implementing your plans. If you are struggling to come up with a more realistic estimate, bring in an external expert to help work with you to reduce the risk of unexpected holdbacks and costs.