Comparing your company against others in the same sector and of a similar structure and size can help you to improve the performance of the business. Benchmarking is the use of information and statistics to compare and highlight any issues that the other company may have and have managed to solve. Using this strategy, you will understand why competitors are successful and how they achieve it. There are various benefits to be gained by companies through this essential practice.
Where can benchmarking be used?
Benchmarking can help out in any area of a business. It can be used in financial analysis, which may be carried out by your finance and accounting service. Performance can be compared, with the goal of improving it. This will also likely lead to upping the quality of a product or service, which can also be part of a benchmarking exercise.
What does benchmarking entail?
There are four main stages of benchmarking:
• studying the existing business process
• analysing and compare the processes used by others in your industry
• comparing your performance to the performance of other companies and finally
• implementing a strategy to improve your business.
The process can be used to improve the quality of your service or product. This may be achieved by improving working practices, using different materials or making changes elsewhere. By implementing a continuous improvement practice, the quality of products will improve, bringing in other benefits along the way.
Continuous improvement
By comparing work practices of your company with others in the industry, you will be able to implement a culture of always improving on your last results. By doing this, you will discover strengths and weak areas of the business. Benchmarking will help you identify weaknesses and provide a strategy for improvement.
Once this new practice has been fully implemented and results have been measured, the process may be used in other areas to improve work practices. There are many benefits to this, including reduced costs and increased productivity.
Increasing revenues
By benchmarking against successful companies in the same sector, you may be able to improve your products and processes, ultimately swelling sales. If improvements are noticeable to customers and are marketed, you may find that revenues increase substantially. By improving work practices, you might also be able to significantly reduce expenses.
Benchmarking is beneficial to most companies, although limited resources sometimes make it difficult to put into practice. For professional guidance, have an informal chat to us about benchmarking and how it can improve your business.