Some companies and some products are very successful and they set a standard or hallmark of excellence and best practices. This is called benchmarking. Other companies often try to include these practices into their own system. The idea is that being inspired by fellow companies and adopting their standards helps in investing time and money in devising in-house R&D. Benchmarking or referring to benchmarked companies is not considered to be plagiarism. Benchmarking can be collaborative or it can be very competitive as all companies strive to be the best. Because the business world can be very competitive it’s essential that you have a very good security system in place physically and in your computer network.
Some steps that are involved in adopting benchmarks include things such as:
- Identifying your problem areas. Mapping your business processes to identify problem areas involves intense analysis of data and while the symptoms occur in one area, the root cause may actually be in another area.
- Identifying Leaders: research and identify the leaders of industry whose processes may be the best. Do not be swayed by balance sheets and profitability reports that may cover the real facts.
- Analyzing Best Practices: this is the most difficult part as it involves asking CEOs to reveal their inner workings. Being transparent and revealing what you seek usually flatters the target organizations and they may comply with your wishes.
- Implement: once the process is studied and framed properly, it is a matter of judicious implementation, without uprooting existing systems.
- Maintain: consistency is critical and once the new practices are implemented, they should stay in place.
There are basically four types of benchmarking, which are internal, competitive, functional, and generic. Internal benchmarking refers to benchmarking between business sectors within the same company. Competitive benchmarking compares one company with its competitor. Functional benchmarking means comparing similar methods, techniques and processes within a specific industry, and generic benchmarking means comparing business operations between unrelated industries. In general, benchmarking will refer to competitive benchmarking, which will measure one company’s products, techniques and services, against its competitors.
Benchmarking can helps in improving efficiency and lowering costs while increasing customer satisfaction.