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"Benchmarking is the practice of being humble enough to
admit that someone else is better at something, and wise
enough to try and learn how to match and even surpass
them at it."
Imagine for a moment that your business is a sports team
and your people members of it. If this were the case then
benchmarking would be a way of life.
You would constantly be measuring your performance
against that of your competitors; through league tables,
match results, goals scored, goals against, crowd sizes,
ticket prices, transfer prices, training methods, etc. These
measures would directly influence your future planning.
For instance, if you were top of your league your strategy
would be vastly different to that if you were languishing at
the bottom.
Benchmarking, at its simplest, is the business equivalent
of sporting league tables and the Benchmark Index is the
scoring system used to create those tables.
Benchmarking service is a way to meet a reality by
means of utilising set of Key Performance Indicators
(KPIs) which represent the business measure structured
by different classes (core business process, financial
parameters, Human Resources, Business Excellence,
specific industry focus).
Picture: The process ofbenchmarking
The data is compared and following views are generated:
- continuous comparison in regular time intervals
(comparing against own performance over the
course of time)
- comparisons against a selected relevant (e.g.
business size, industry segment)
Benchmarking is delivering multiple benefits:
- meeting the reality - it is demonstrated that there
is a gap between our perception of the competitive
position against the measured reality. As soon as
the key players in the business become aware of
these facts their chances for survival and growth
are increasing
- focusing business change based on facts - as per
the previous point, the business can systematically
change in direction which factually increases its
vitality and competitive advantages
- definition of realistic and measurable targets - if
we say, e.g. "profitability of the product X should
increase by 3% in next 6 months", by utilising
benchmarking as a tool we can be sure that such
a target is feasible and that its measure is
realistic. The long-term benefit of such an
approach is in increasing the success rate of the
internal initiatives and projects, which is also
increasing the motivation of all participants
(customers, employees, partners and suppliers)
engaged in the business cycle.
In cooperation with our English partner
PerformanceTrack, we are utilising world's largest
database of general business benchmarking.
Picture: Example of graphical report for a
set of financialKPIs
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See the sample
benchmarking report:
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