Benchmarking is the process by which we measure our company’s success against other similar companies to find out if there is a weakness in performance that can be addressed by improving our performance. Studying other companies can give you what it takes to increase your company’s efficiency and become a bigger player in the industry.
Benchmarking compares products, services and operations with companies that are recognized as leaders in one or more areas of their business. Bench marking contains essential information that we need to see how our company stacks up against competitors; Even if they are in a different industry or serve different customers.
Types of Benchmarks
There are four models in the benchmark, which are:
Performance Bench Marking
This topic includes collecting and comparing quantitative data; which is the first step of an organization to identify functional weaknesses.
Practice the Benchmarking Process
This topic includes collecting and comparing qualitative information; which is a step-by-step analysis of how an activity is performed through people, processes and technology.
This includes comparing data from departments, units, locations, etc., within the organization.
This includes comparing our organization’s performance with other organizations in the same industry.
Benefits of Benchmarking
Next, we discuss the benefits of benchmarking.
Using benchmarks allows us as a business to have a strategic advantage over our competitors and grow in our industry.
Benchmark Performance Monitoring
Benchmarking involves looking at current trends in data and predicting future trends depending on your goal to achieve. Benchmarking must be an ongoing process to know we have succeeded. Therefore, performance monitoring is an inherent feature of it.
In addition to performance monitoring, continuous improvement is an essential feature of benchmarking. Because the purpose of benchmarking is to improve a part of a business. This progress should not be improved once and forgotten, but should be something that improves over time and is continuous.
Planning and Goal Setting
After the benchmark is done, the goals and performance of the benchmark are reviewed in order to improve efficiency. These goals are new and more competitive goals for our company, but they must be achievable. If the goals to achieve the goals are unrealistic, the team becomes demotivated.
When we as a company look at our processes and benchmarks, we need to ask tough questions to get all the answers we need. This includes talking to everyone in the business and understanding their role. By asking these questions and gaining a better understanding of everyone’s role, ownership of processes and people’s performance is encouraged. This means that employees take pride in their jobs and what they do. This pride leads to better performance and higher quality end results.
Understanding the Performance of the Company
Benchmarking shows where our company is now and where we want to go. If we are looking to improve any process in our business, benchmarking is a way to examine how we can excel and become more successful by outlining the steps required to achieve our goal.
The benchmark has the following steps
The first stage of benchmarking is the most important stage in this process. Planning involves highlighting what we want to improve, who we will benchmark ourselves against, and how we envision success. Only when this step is completed can we move on to the next step, because planning results will focus on the information we need to collect and our success.
Once planned, benchmarking is about gathering information about our processes and how our competitors are doing them. If we are looking to improve our customer service satisfaction rating, we need to understand the processes involved in the department, how we handle calls and communications, and how it differs from our competitors. Perhaps we can talk to someone at a competing company, or contact the center directly to get first-hand information on their processes. At this stage, it is important to gather as much information as possible.
Once we feel like we have all the information we can gather, we can begin to map it out and begin to understand any deficiencies we may have. It is important to remember at this stage of the process that no business is perfect and we need to keep an open mind to be able to analyze the information objectively. Once the findings start to emerge, we can prepare a report and start discussing next steps to achieve better performance in this area.
Applying findings to a department is never easy, especially when we propose changes. Collecting and analyzing information is only valuable when we can implement changes and make the company better in the process. Getting buy-in from a department can involve points, so make sure the findings you present are accepted and successful.
No program is ever complete without monitoring results to determine how successful the program is. Therefore, monitoring the benchmark implementation stage and success goals is the only way to know the effectiveness of changes. This can be over a short or long period of time depending on the desired results.
Up to Sum
Benchmarking is a common method and sensible exercise to establish baselines, define best practices, identify opportunities for improvement, and create a competitive environment in an organization. Benchmarking within an organization leads to valuable data that sparks new ideas and practices. Additionally, we can use it as a tool to help companies evaluate and prioritize their process improvement opportunities.