Benchmarking is the process of creating, collecting, comparing and analyzing key indicators that measure the performance of the most important processes and functions within a company.These indicators are known as “benchmarks” and serve as a standard of business success .
To compare companies with each other, it is important to determine which competitiveness indicators will be used to establish the comparison, and thus know what impact each of them has on obtaining results.
Previously, the measurement of business competitiveness prioritized or only took into account financial indicators. Today, other aspects are considered: social, environmental and economic impact, innovation, learning, entrepreneurial capacity, management, among others, and other areas are taken into account: production, purchasing, marketing, sales…
To make it clearer:
what-is-benchmarking
Benchmarking is an ongoing activity because the market is constantly changing.and it is important to know how a company is responding to it, and how the leading corporations in their market are doing so.
On the other hand, it is not a quick and easy job . It is not a cookbook in which you only need ingredients and know how to use them. It requires analysis and constant learning.
It is not a methodology to reduce costs either: benchmarking requires economic, human and technological resources to obtain and analyze the information. Therefore, its execution is not cheap, but it can help you take advantage of your working capital in the future.
Likewise, it is not a rigid process:must be flexible to incorporate new ways of obtaining information.
It is worth noting thatA complete benchmarking study is one that evaluates the selected indicators both internally and externally,That is, within the same organization that is developing it, as well as those that are leaders in their market, whether they are competitors or not.
However, it can be divided into three types, according to the purposes that are to be fulfilled or evaluated.
Benchmarking interno
It is used to compare the functions and processes carried out in a company with each other.
In this type, it is assumed that some processes may be more efficient and effective than others. In this sense, the purpose of internal benchmarking is to identify internal development standards .
Benchmarking competitivo
It consists of identifying specific information about the products, processes and business results of your direct competitors, and comparing them with those of your organization.
Below are some things you can learn about your competition:
Value proposition
Social, environmental and economic impact
Sources of income
Market size: units per month, week or year.
Annual sales.
Main difficulties given the environment.
Key opportunities.
Next steps for the company
Key business activities.
Principales stakeholders.
This analysis requires more resources than those needed for internal benchmarking., since in the case of the second, the information is obtained from the company itself.
There are two main barriers that hinder the process: the first is the lack of updated and available information on competing companies; the second is the willingness of these companies to provide their data, since according to traditional paradigms, which indicate that competitors are not trustworthy, or are enemies, they hinder communication between competitors.
To overcome these barriers,You need to be honest and transparent with your competitor when requesting information: detail the purposes of your study and the methods you are using.
Regarding this, Spendolini points out: “If you approach a competitor as if they were an enemy, you will get the predictable reaction of distrust. When you do it honestly and professionally, you very often get an honest and professional response from the competitor.”
Benchmarking funcional
Also known as generic benchmarking, it is applied to companies or organizations that do not necessarily represent direct competition.
Its purpose is to identify best practices in any type of organization that has earned a reputation for excellence in a specific area.
Unlike the competitive model, the functional model is much easier to implement, since the companies to be analyzed, not being direct competitors, will be able to give you some data about their business model more easily.
Difference between benchmarking and benchmarketing
Indeed, although they can be used in the same sense, they sound very similar and at their core they have many similarities, they are not the same. Benchmarking is the analysis of the competition, considering all the aspects that encompass those of the company to be analyzed, with its own. This includes absolutely everything that has to do with that company.
Benchmarking does seek to compare the competition with ours (or with our client's if it is an agency). Knowing these strengths/weaknesses, marketing techniques will be used to place ourselves above this competitor, thus ensuring that we attract not only their leads, but also those who are beginning the customer journey for similar products.
What is benchmarking for?
Its main focus is to understand the positive and negative aspects of a company; obtain key information for decision-making; establish realistic strategies and goals according to the company's capacity and the circumstances of the environment.
For Spendolini,Benchmarking serves to create generic excellence among companies, because there are processes that all companies must have in common, whether for a legal aspect or a social standard, whose results are measurable.
For example, the billing process. If the preparation of invoices is a common practice in all companies, there must therefore be some generic billing practices that can be observed and measured in any organization.
In summary, according to Spendolini's perspective,This serves to compare standardized metrics, philippines telegram both internationally and nationally,with the aim of verifying the levels of excellence of one company compared to another.
How to benchmark?
To do internal and competitive benchmarking at the same time, we recommend that you follow these steps:
Form a team of proactive, creative and analytical people, capable of finding a solution to any problem. This team should be made up of managers and internal workers from your company, who manage, execute and monitor the entire process. As well as consultants or external companies that have experience preparing these analyses.
Educate your office team on the importance, purpose, tracking, and scope of a benchmarking study.
Use an internal diagnosis and analysis to establish the need for change. Good starting points can be: customer complaints, observations from managers that objectives are not being met, comments of dissatisfaction from employees; each of these aspects should be perceived as problems that can be improved.
Determine through prior analysis which functions, processes or activities need to be improved. Choose those that have a significant impact on your business.
Determine the indicators that will allow you to know the performance of the key processes that you chose for your company's internal analysis. Analyze the results obtained over time.
Identify the best companies in your market or industrial sector.
Establish the key indicators or metrics that should be examined in the companies chosen for comparison.
Contact the selected companies or go to secondary sources to extract the data and information you need for the study.
Compare your company's metrics with those of your competitors and analyze the reasons behind each of them.
In the final report, reflect how the diagnosed problem should be improved and how other companies have solved similar problems, based on the information collected.