Benchmarking - The Stepping Stone To A Smoother Business

By Author: Kirthy Shetty
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Benchmarking is a sign that your product has arrived. What is benchmarking? According to experts, it is the process of comparing one's business processes, performance and metrics with industry bests and/or best practices from other industries. Dimensions that are typically measured for benchmarking studies are quality, time, and cost. Improvements from these learning mean doing things better, faster, cheaper and a whole lot more smarter.

Comparative study for the targets and one's own performance is what benchmarking is all about. It involves the management identifying the best firms or processes in their industry, or similar processes from any other industry, and comparing the results and processes of those (called the targets) to one's own results and processes to learn how well the targets perform and, more importantly, how well they do it.

The term ‘benchmarking' was coined by cobblers in an effort to measure people's feet for shoes. They would place someone's foot on a cobbler's "bench" and mark it out to make the perfect pair of bespoke shoes. Benchmarking is mostly used to measure performance using ...
... a specific indicator such as cost per unit of measure, productivity per unit of measure, cycle time of X per unit of measure or defects per unit of measure etc. This results in a metric of performance that is then compared to others.

Also referred to as "best practice benchmarking" or "process benchmarking", it is a process mostly revered in management and particularly strategic management, in which organizations evaluate various aspects of their business processes in relation to the best practice companies' processes, usually within a peer group defined for the sole purposes of comparison and resulting improvement. This comparison then allows organizations to develop business plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance and productivity. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.

How can benchmarking help you in your business? At first, benchmarking allows you to identify a comparator or a target, either in your own industry or other with the same processes. This then helps you evaluate your own strengths and weaknesses in comparison to the target. Identifying your business creases and ironing them out is the main aim of the process of benchmarking.

This is a sure-shot approach through which you can imbibe positive work processes into your organization thus giving your employees and investors a reason to be proud of their workplace.

Kirthy Shetty.
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