Gap Analysis

Correct Answer: The difference between projected revenue targets and actual performance data

The difference between projected revenue targets and actual performance data is the most effective metric for gap analysis because: It provides a quantifiable and measurable assessment of the financial disparity between current and desired future states. It focuses on the core business outcome (revenue) which is crucial for financial services companies. It allows for precise tracking of progress and goal achievement. Why other options are less suitable: Documented business processes needing modification is a qualitative measure that doesn't effectively quantify the value gap. Percentage deviation from industry benchmarks measures relative position but not the specific organizational value gap. Total cost estimation for improvements focuses on investment required rather than the actual performance gap being addressed.

Correct Answer: Compare implementation costs against potential revenue gains and compliance benefits

Determining ROI for a data privacy initiative requires a comprehensive cost-benefit analysis. The best method compares implementation costs against potential revenue gains and compliance benefits because: 1. It provides a tangible financial measurement 2. It accounts for both costs and benefits 3. It includes compliance benefits, which are crucial for privacy initiatives 4. It helps justify the investment to stakeholders Why other options are inadequate: - Evaluating current metrics and forecasting based on historical trends is insufficient as privacy requirements constantly evolve - Analyzing capabilities and projecting requirements focuses only on compliance needs, not financial returns - Calculating total cost of ownership considers only costs, not benefits, and industry benchmarks may not reflect organization-specific needs A proper ROI analysis must balance both the investment required and the expected returns, including both financial and compliance benefits, making the comparison of costs against gains the most comprehensive approach.

Correct Answer: Target Performance - Current Performance = Gap Delta

The formula 'Target Performance - Current Performance = Gap Delta' is the most accurate way to quantify the performance disparity in a gap analysis. This is the fundamental gap analysis formula because it: 1. Clearly shows the difference between where you want to be (target) and where you are (current) 2. Provides a straightforward numerical value representing the improvement needed 3. Can be applied across various IT metrics (speed, capacity, efficiency, etc.) 4. Results in a clear, actionable metric (the Gap Delta) Other formulas are problematic because: - Adding planned improvement steps to current performance presumes you know the exact improvements needed - Using a growth factor assumes linear or exponential growth, which may not apply to all IT systems - Calculating a percentage deviation might obscure the actual scale of improvements needed in real terms