The more you expand the more important benchmarking becomes. Apples ain’t oranges.
Benchmarking means finding and working with the best of the best.
Benchmarking is the process of comparing business processes and performance metrics to industry best and/or best practices from other industries. Dimensions typically measured are processes, time, cost and quality. Improvements from the learning involved means doing things better, faster, and cheaper.
Benchmarking also helps you in identifying the best businesses in your industry, or any other industry where similar processes exist. Comparing the results and processes of those studied to your own results and processes and learn how well they perform and more importantly, how they do it.
While benchmarking is most often used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, the cycle time of x per unit of measure or defects per unit of measure), resulting in a metric of performance that is then compared to others.
“All successful companies are constantly benchmarking their competition. They have to know what they have to match up with day-in and day-out if their company is going to be successful”. James Dunn
It is benchmarking that allows businesses to develop plans on how to make improvements or adopt specific best practices and improve some aspect of performance.
Benchmarking may be a one-off event but is often treated as a continuous improvement process in which businesses continually seek to improve all their important processes and practices.
Typical benchmarking areas usually revolve around customer services and financial performance, but don’t stop there, map out all the parts of your business that you would like to improve. Then schedule a timeline to address each part. And don’t stop, things can change quickly in today’s business environment and you will probably need to benchmark some of the parts again and again.
Also referred to as ‘best practice benchmarking’ or ‘process benchmarking’, it is a process used in management, in which you can evaluate various aspects of your processes and practices.
The following is an example of a typical benchmarking methodology:
- Identify your problem areas.
- Identify other industries that have similar processes.
- Identify organisations that are leaders in these areas.
- Survey organisations for measures and practices.
- Visit the ‘best practice’ businesses or non-profits to identify leading edge.
- Implement new and improved business processes and practices.
The term benchmarking was first used by cobblers to measure people’s feet for shoes. They would place someone’s foot on a bench and mark it out to make the pattern for the shoes.
Is your business ready to take the leap into the international marketplace? If your want to know if going global is the right decision, seek advice on international businesses you could benchmark against. International business expansion can be quite different to local business expansion.
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You can benchmark against a totally unrelated business. I remember a company making cement who benchmarked their delivery processes against a fast food outlet, with amazing results.