The Importance of Benchmarking
Mainspring Solutions was founded on the idea of improving business processes. It leads to more efficient operations, enhanced product/service quality, satisfied employees, and a larger bottom line.
Every firm contains many different processes with in it - many of which are preformed on a daily basis. There are operational process, IT process, managerial processes, etc. Each individual component of these, theoretically, has the capacity to be improved. This is where benchmarking lies.
Benchmarking can be defined as the method of comparing your own enterprises' processes to that of a competitor, other similar organizations in your industry, or those in the broader market. The idea behind this is to compare your procedures to that of other companies which are finding success in this aspect in search of implementable improvements. Common metrics of benchmarking include: quantity used, wasted time, customer satisfaction, cost effectiveness, automation and investments.
Why should a firm begin benchmarking initiatives? Referring back to our previous article, "Adopting a Culture of Adaptation", business leaders need to consistently embrace change - not to get ahead - but to stay afloat in growing competitive industries. Benchmarking suggests that managers understand a particular process in an organization can be strengthened. This comparison to others in your industry can provide information that leads to competitive advantages. Too often, leaders focus on edging out their competition with nimble marketing and product enhancements, but real strength comes from a procedural basis.
Many thought leaders define four types of benchmarking:
Generic Benchmarking - This form follows firms that compare their functions to organizations, regardless of the industry or market, under the assumption that their optimized procedures could be adopted and implemented.
Competitive Benchmarking - The most practical type one would conceptualize, comparing oneself directly to their competitors in search of a competitive advantage or new methodology.
Internal Benchmarking - A comparison of business functions within an organization. For example: an observation is made that one side of a factory floor is more productive than the other in terms of minimizing move time. Once the lagging end of the floor engages in benchmarking to meet their efficiency, they realize the floor layout and position of equipment varies, culminating in greater productivity.
Functional Benchmarking - Most closely related to competitive benchmarking, this form compares similar functions of non-competitors. The most simple example is comparing the processes of a coal mining organization to that of a gold mining.
Mainspring Solutions' consultation services often deals with benchmarking and are able to offer assistance in creating benchmarks, deciding which form of benchmarking to use and what the most practical & cost efficient way is to implement. If you organization is having issues with getting the wheels off the ground with a benchmarking initiative, we are here to help!
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