Listen to: "Gap Analysis vs. Internal Audit: Which Evaluation Process Do You Need?"
If you have started to explore gap analysis and internal audit as possible assessment methods, you may wonder which one will serve your organization’s specific needs and objectives. While both evaluation methods may cover similar territory, each one’s focus, goals, results, and uses are unique and valuable.
Quality Digest describes the gap analysis as “mainly a document review or a ‘show me the evidence’ activity,” with evidence that usually comes in the form of a record or document. The primary focus of most gap analysis projects often comes down to corporate governance, internal audit function, operational efficiency, and financial reporting.
Many businesses perform a gap analysis in the early phases of development of any new process—or even in the early stages of that organization’s development—to get an idea of what to expect from that process when up-and-running and fully functioning. These same businesses later go back and perform a diagnostic gap analysis to determine whether the new process is on track to help achieve their goals. If they have missed a beat, a gap analysis gives IT leaders and executives a chance to review problematic issues and resolve them before proceeding and finalizing the process.
This type of analysis gives businesses the opportunity to compare actual performance to the potential performance your team had anticipated. As the name suggests, by catching issues that do not work in the early development phase, your team can fill in the “gaps” to correct the issues to help steer you toward success in achieving your organization’s goals and overall vision.
What Are the Five Phases of a Gap Analysis?
You may understand the basic idea of a gap analysis, but as you look at the task ahead of you, getting started may feel challenging. It may help you to break down your gap analysis into the following five phases.
Phase 1 – Planning
Like any project, the planning stage helps you understand the scope and plan accordingly. A few of the things you can sort out at this phase include determining the content in your gap analysis questionnaire and deciding on the format.
Phase 2 – Retrieve and Review Background Information
Per Global Knowledge, Phase 2 gives you, or those performing the gap analysis, the chance to review the source information. Gather and prepare the following information and company assets to help establish your organization’s intent for service management activities:
- Existing policies and process descriptions
- Service files, correspondence and other documentation
- Process flowcharts, graphs and other visual representations
- Roles and responsibilities
- Process outputs
- Service activities and plans
- Service level agreements and associated reports
- Any additional applicable information to help to garner the most accurate results
Phase 3 – Conduct Interviews with All Stakeholders
Stakeholders include existing service owners, process owners, service managers, process managers, and anyone else deemed a stakeholder in or regarding the organization. The interviews are based on the questionnaire your team developed—whether an in-house team or a professional consulting team—in Phase 1.
Phase 4 – Draft Gap Analysis for Review
This intermediate assessment phase gives your team, along with your stakeholders, the chance to look at the results of prior phases. This phase gives you the chance to review information and take additional steps to meet your goals if anything is missing.
Phase 5 – Complete Final Deliverables in a Formal Report
In your report, note all findings and make final documentation notes to your formal report, providing short, medium, and long-term recommendations for future goals. Once conducting a formal gap analysis review meeting, you can officially close your gap analysis project so your team can begin working to achieve the noted goals.
As opposed to a gap analysis, an internal audit is usually conducted when a process—like a quality management system—is fully developed, in place, and some degree of implementation has occurred. Your internal audit will seek to determine your organization’s degree of compliance with the requirements of a specification, regulation, rule, or other standard handed down by relevant governing bodies—these might include ISO, API or OHSAS — or in accordance with your organization’s own requirements.
Best known as an independent, objective, assurance and consulting activity, an internal audit was designed to increase value and improve your organization’s operations.
What Are the Tasks Performed in an Internal Audit?
There are two essential tasks involved with the performance of an internal audit, which are your review of relevant documentation and interviews with employees. As simple as this process may sound, it is time-consuming and essential that you unearth details that are fundamentally crucial to the health of your organization and its future prosperity.
Reporting Your Internal Audit Findings
Upon completion of staff interviews and reviews of documentation of processes, you need to report your findings. Ask your lead auditor to complete a summary of your organization’s conformance to a chose standard or specification and a list of findings. Your lead auditor should not only addresses conformances and nonconformances, but it is also important that they make notes that reflect their observations of the degree and quality of effort to conform to standards.
Ultimately, your internal audit serves to help your team stay on track so you feel confident that you are always working toward full conformance.
Does Your Business Need a Gap Analysis or an Internal Audit?
If you are still unsure which type of evaluation will benefit your organization’s needs, or you need backup to get the job done, our auditing team at I.S. Partners, LLC. can help in either case. Send us a message or call us at 215-675-1400 to discuss the reason for your gap analysis or internal audit, as well as your goals, so we can lay out a plan to help you achieve it all with confidence and spot-on results.