Data that are compared normally include quality, time and costs. It is important to compare these data with those of companies of the same size that have a similar customer base. Benchmarking also helps to get insight into how to be better, faster and more cost-effective.
Benchmarking is part of strategic management. Various aspects are being evaluated and compared to those of peer organizations. This enables better insight into how to improve. Although benchmarking can be a one-time effort, is more and more used on an ungoing basis.
There are several kinds of benchmarking, including:
- Process benchmarking, which is focusing on organizational processes in order to identify the advantages and strong points of other organizations. Activities are analyzed with the focus on reducing costs and increasing efficiency.
- IR Benchmarking, which entails that investors compare financial results and look at opportunities and alternatives.
- Product benchmarking, which focuses on possible development of new products and services or upgrading existing ones by looking at competing offerings.
- Strategic benchmarking, which looks at the strategic management of other organizations.
There are various ways to benchmark. As a company, you can decide to conduct the benchmarking in-house. In many cases, it might be worth while to approach am agency with experience in benchmarking similar companies in your industry.(Image: Olympics 1896)