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Benchmarking

Benchmark

Have you ever looked at the processes and performance of your business and compared it to other companies in the industry. If the answer is no, then maybe you should take it into consideration as it questions your business, identifies opportunities and provided changes that can be made. Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. At its simplest, it helps you to compare statistics and control costs. More sophisticated benchmarking looks at process design and business strategy. When considering benchmarking there are areas that you need to consider, which are:

The opportunities

There are many opportunities that come from benchmarking which are:

·         Most benchmarking compares key performance indicators (KPIs)
·         Benchmarking often proves particularly successful when comparing processes
·         Benchmarking can also be used to compare businesses at a strategic level
·         However, you use benchmark, it is only a tool which highlights opportunities

Planning

When benchmarking and starting the process, you should do your planning. Areas to consider are:

·         Set up a project team from different parts of the business
·         Link the benchmarking activity to your company’s objectives
·         Benchmarking will not work unless you know yourself
·         A typical benchmark project takes three or four months to set up

Collecting information

When collecting information from the companies you are going to make comparison with, you should take the first step by approaching them and drawing up an agreement. The next step is to decide how you will collect the data.  You can also invite your partners to carry out similar visits so that they can collect information on you too. It is important to send copies of your reports to your partner organisation.

Managing Improvement

Once you have collected your information on your partners you need to summarise how you differ from them. This can be done by looking at:

·         Summarise where you differ from your benchmark partners
·         Investigate why you differ
·         Decide what to do and make the changes needed
·         The success of benchmark depends on management commitment
·         Review how well the benchmark study went and what impact the changes had

If you want any more information on Benchmarking please contact us on 0161 399 4989 or info@sterlingfinance.net.