How Benchmarking contributes towards company efficiency?
Very often, to get where we want to go we have to know where we are starting from, and this is where Benchmarking comes in the picture. Benchmarking, of late has created a lot of hullabaloo in the business world and why it should not. Its importance can be ascertained by the organizations for their growth and success. Benchmarking allows an organization to compare it self against the competition, the market. Almost each and every business or management process can be benchmarked. The process of benchmarking can be just as important as the results. Benchmarking process can be effectively used in a variety of industries in many different of areas, such as technology, manufacturing, operations, management, purchasing, supplier selection, training, finance, business and marketing. Benefits of Benchmarking are many folds. It helps a company to identify its loopholes and improve on them. In fact, an organization can also Benchmark its own performance current performance with past performance. It leads to steady increase in performance. This is a powerful marketing tool as we can measure the company’s performance quantitatively. Through Benchmarking it can be found out that –
- Who does the business process really well and has processes that are adaptable to my organization
- What areas are causing the most trouble
- Which employees contribute most to the critical success factors
- What are the performance measures to determine the effect of our actions?
- Who is the most compatible for me to benchmark with
Benchmarking, thus serves a number of purposes like :
- It enables a company to calibrate how it is delivering different processes by examining the way other organizations accomplish tasks and responsibilities
- Benchmarking enables a company to learn from others successes and mistakes.
- Benchmarking can create an environment in which active learning is encouraged. can be used as a tool to motivate people to change.
- Benchmarking can be used to help set direction and priorities for a manager and helps him/her to focus on critical activities.
- A well established benchmarking process can help managers set goals and targets designed to make the company the best in its competitive field, and to initiate focused programs that move the company from its current position
- Helps in justifying costs and practices.
- Conduct trend analysis.
- Builds confidence when "gut feel" assumptions are validated
- Internal thinking from "inputs" to "outputs" (i.e. measures)
- Serves as an excellent baseline "report card"
Benchmarking is also a great team-building tool. Organizations who involve their team throughout the benchmarking process report the following benefits:
- Accelerates understanding and agreement on the real problem areas
- Educates on the latest practices being used and performance being achieved
- Motivates the team to work collaboratively internally to surpass external benchmarks
- Removes emotion from the discussion.
Benchmarking is a continuous evaluation and improvement process that helps Organizations to evolve. Needless to say looking at all these benefits most of the companies today use Benchmarking extensively to be successful and reach zenith in business domain.
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