Benchmarking can help you understand how well you are providing services and products to satisfy your customers, and what your competitors may be doing better than you. This comparison can show the gap in your performance and can provide an excellent management tool to help you to improve your business.
Many companies look at their performance as above average and much better than their competitors. But the reality is completely different and most companies do not really know how well they operate in comparison with their competitors. For example, recent research shows that only 35% of American businesses currently benchmark their competitive performance. Therefore, they just do not know if they are better than other companies.
Benchmarking will definitely help you to improve your business. If you believe that you are perfect, with no opportunity or need to improve, you are on the way down the slippery slope of failure. Benchmarking your products and services can help you to understand why you should change your business processes.
Managers who have used benchmarking to make major improvements in their work have found the following points to be very useful:
- Successful benchmarking depends on an ongoing commitment from senior management.
- Successful benchmarking is based on how well you know and understand how your own business processes are accomplished.
- Implementation of your benchmarking process depends on your willingness and ability to change your way of doing business and adapt to new competitive pressures. It is extremely important if you want to improve you business positions.
- Realize that your competition is improving constantly, and that customer requirements will continue to become more demanding. Therefore, you need to anticipate future changes and plan on “shooting ahead of the duck.” You have to change you vision for the future and somehow to predict the customer’s demands and needs. There are many techniques which will help you to achieve that task.
- Competitors are more willing to share information than you might expect, but do not ask for anything that you are unwilling to share about your own business operations. Benchmarking networks are excellent starting points to facilitate your benchmarking efforts.
- The focus during benchmarking should be on the key enabling processes and practices as well as your performance measurements.
- In benchmarking, look for leading companies that compete in your business area, at companies in other industries that are recognized as leaders in your area of special interest, and at your own internal business units that are known to be effective in similar work.
Check out the 5 phases of a benchmarking process. The best way to do it by yourself and get guaranteed results that would help you improve your business performance.