Benchmarking for your Business
Benchmarking for your business is an important tool that can help you in going about major steps in your entrepreneurial journey.
A lot of people would want to have a business of their own, but only a few are brave enough to take the risk. Although starting a business entails risk, it is just right to also take caution and be one step ahead of your business.
What is Benchmarking?
In the business perspective, it is basically obtaining some measures and studying not just your competition’s facilities and processes but as well as different industry. At this point, it is important to take note of best practices and processes for your company’s advantage. Simply put, this tool would aid you on how you could improve as a company, and how to sustain the company. Basically, the benchmarking process is focused on the current reality of a certain organization.
Types of Benchmarking
There are many ways to conduct benchmarking for your business among these are Internal, Technical, Competitive, and Strategic.
Internal Benchmarking basically looks at the internal processes and practices throughout the different areas of their own company and measure how efficient the systems and processes are, further, this continuous approach leads to improvement in the processes and structure of the company and fill in any gaps to get things done.
Technical Benchmarking is a technique used to test your product and compare it to several relative products based on technical criteria. This type of benchmarking is expected to be implemented during System Development, Proposal Preparation or Product selection.
Competitive Benchmarking is a process of comparing a company’s practices and processes with the company’s competition.
Strategic Benchmarking is all about comparing your strategic performance with the strategic performance of leading companies in the industry in addition to the past performance of your company. You can use strategic benchmarking to develop a system of best practices that your company could use.
Before Engaging in any type of benchmarking it is indeed important to be clear with your objective as to why you are conducting this process. It is important that you have already established Key Performance indicator (KPI) to measure how your company is improving. What is working and what is not. Thus, you can say that benchmarking should be a continuous process. It should be part of the company’s tool for a sustainable business. In my previous article on Knowing your Market and their Needs, I mentioned about some key questions to ask yourself in identifying your market. Thus, in benchmarking, here are some few more points you need to note when you conduct benchmarking:
What are you Benchmarking for? There are various areas in your business that you can do benchmarking which one would you focus on benchmarking on?
Why are you benchmarking the said area of your business?
Who are your Drivers? This could be random employees that would be used in determining the metric that you are benchmarking for.
How would you measure these drivers? Do you have KPIs?
What is your company’s current situation?
Who are the companies or organization you are benchmarking against?