What is Benchmarking, and what are best practices, tools and online templates for teams and organizations?
Definition of Benchmarking
Benchmarking is the process of comparing an organization’s performance to those of the top standards in the industry, which can be another organization within the industry or an organization in another industry that operates at the level that the industry is hoping to achieve. Generally, the metrics that are compared are the quality of the products or services the organization produces, how much it costs to generate these products, and how long it takes the organization to create them.
Description of Benchmarking
In order to Benchmark, the organization should identify the specific business best practices to focus on, who they will compare themselves to, and compare their chosen benchmarks to identical metrics in the other organization. Benchmarking is beneficial because the organization will be able to understand not only how their competitors are performing, but also what procedures or strategies are being used to accomplish such high performance. With this information, the organization can then begin to brainstorm ways to adjust their own practices or adopt similar practices to make their performance more comparable.
Benchmarking can be done several ways. However, all benchmarking processes generally involve the following steps:
Step 1: Determine what specific business functions are not functioning at their optimal level and need to be monitored. This process will involve some research, which can be done by informally speaking with customers, other organizational members, suppliers, or managers, creating more formal focus groups with a representative sample of the aforementioned groups, sending out surveys, or analyzing market trends, and financial progress. This step is critical because it is important to have a deep knowledge of where the organization currently stands on the metrics the team is trying to improve.
Step 2: Identify the company or companies that have similar operations to your organization.
Step 3: Identify the company or companies that are top performers in the industry or outside of the industry. This can also include organizations outside of the country in which your company resides, which is highly recommended for global organizations. In order to determine which is the best company to examine, consider bringing in an external consultant, financial analyst, or business magazine.
Step 4: Administer surveys to targeted organizations in order to gain a better understanding of their processes and practices, as well as the measures that they use to gauge success. This information can be used to identify what alternatives there are to practices currently utilized at your organization.
Step 5: If possible, schedule a visit to the company identified as being the industry leader to witness and take note on the best practices in action. In order to acquire this information, it is advisable to reach an agreement with industry leaders over an exchange of information that is mutually beneficial to both parties. A meeting should be arranged so that this information can be disseminated to relevant parties.
Step 6: With the all of the acquired data and knowledge on the practices used to obtain excellent performance, consider ways to modify the practices that your organization currently uses or adopt new practices completely. Whatever method the team chooses, make sure concrete steps are taken to ensure these new practices are implemented. For example, identify market vacancies to pursue, obtain funding for whatever changes are going to be made, or obtain support for the proposed changes from senior management by exhibiting the benefit to be derived from enacting these changes.
Tools & Templates
The research phase of the best practices Benchmarking process can be supported through the use of process mapping and other project management tools.
upBOARD's Online Benchmarking Tools & Templates
Unlike most traditional best practices Benchmarking techniques, upBOARD’s online Benchmarking collaboration tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.
Learn more about upBOARD’s portfolio of other business strategy best practice tools and templates, including:
2 X 2 Matrix, ADL Matrix, Affinity Diagrams, Baker’s 4 Strategies of Influence, Balanced Scorecard, Benchmarking, Blue Ocean Strategy, Bowman Strategy Clock, Build-Measure-Learn Feedback Loop, Business Model Canvas, CAGE Distance Framework, Competitive Analysis, Competitive Landscape Analysis, Contingency Planning, Core Competence Analysis, Critical Success Factors, Discovery Driven Planning, Economic Value Added, First Mover Advantage, Five Forces Model, Force Field Analysis, Gap Analysis, GE McKinsey 9-Box Matrix, Go To Market Strategy, Hambrick & Frederickson’s Strategy Diamond, Hedgehog Model, Hook Model of Behavioral Design, Hoshin Planning System, Kay’s Distinctive Capabilities Framework, Key Outcome Indicators, Kotler’s Five Product Levels Model, Kotler’s Pricing Strategies, Lafley & Martin’s Five Step Strategy Model, McKinsey 7S Model, McKinsey’s Seven Degrees of Freedom for Growth, Mergers & Acquisitions, Mission Statements, Mullin’s Seven Domains Model, OGSM Framework, Ohmae’s 3-C’s Model, Partner Relationship Management, PEST Analysis, PESTLE Analysis, Porter’s Diamond, Portfolio Management, Purpose Statements, Pyramid of Purpose, Scenario Planning, Simonson & Rosen’s Influence Mix, SMART Performance Metrics, SMARTER Goals, SOAR, Strategic Goals, Strategy Map, Strategy Roadmap, Strategy Uncertainty Map, SWOT Analysis, TOWS Matrix, Triple Bottom Line, USP Analysis, Value Chain Analysis, Value Disciplines Model, Value Net Model, Values Statement, Vision Statements, VRIO Analysis, and Weisbord’s Six-Box Model.