Benchmarking: what it is and how to do it in your company

If you do not know exactly what Benchmarking is, with this brief explanation we will try to make it much clearer: Benchmarking is a technique used to evaluate, analyze and collect information about the products and / or services of our competition with the objective of comparing and extracting the best practices and that helps us to be able to improve the different processes of our own company.

Benchmarking helps us to know what really works in the market to count on it and make our company even more competitive

⁉ Advantages of doing a Benchmarking for your company:

Benchmarking can offer multiple benefits to your company, then we detail the six most notable:

1. It allows us to detect new opportunities.
2. Through the analysis we perform on our competitors, we achieve greater knowledge and understanding about them.
3. As a consequence of the previous one, benchmarking helps us to have a better knowledge of the sector in which our company is located.
4. Benchmarking drives us to establish new business objectives.
5. It helps us to identify in which areas we can improved our performance.
6. Detect new needs of our clients.

✔ Types of Benchmarking:

Among the many types of benchmarking that exist, we find the following:

• Functional benchmarking: this type of benchmarking consists of carrying out an analysis and extracting good practices from companies that stand out in the area that they wish to improve, but that do not compete with the company itself or belong to the same sector.
• Competitive benchmarking: in competitive benchmarking, on the other hand, we analyzed specific areas of direct competitors of our company to extract their best practices.
• Internal Benchmarking: this modality focuses on searching for best practices within the same company. To do this, we self-study the performance of the organization, comparing performances and seeking to improve them.

➙ How to do a Benchmarking?

Finally, we will know the steps we must keep in mind to make a good Benchmarking, after all mentioned before:

• Identify the companies considered as our competence.
• Detect which products and / or services are offered to ours customers.
• Define which indicators we will compare, as well as the method to collect the data.
• Analyze the information collected in relation to the current performance of the company in that area.
• Set the goals and times of integration of the new practices.
• Execute the integration of the new practices.
• Once the new practices are implemented and executed, it is really important to analyze the results.
• As we already know, Benchmarking is a process of continuous improvement, for that reason it is important to be done on a recurring way, so it will be key to determine the periodicity which this technique will be carried out.

“It’s good to have a valid competition. It pushes you to do it better.”

Gianni Versace