Role of benchmarkin

Improve Company Efficiency and Effectiveness

Business CoworkersUndergoing the benchmarking process is not just useful for better understanding
your competitors, but also for improving the efficiency and effectiveness of your own business. Take a
close look at how your business is performing. Does your marketing plan, advertising tactics, and sales
live up to your expectations? If not, there may be something missing in the equation. Benchmarking
gives businesses the information and tools they need to become more efficient and effective across all
business areas. This is especially vital for certain types of companies, primarily service-driven businesses.

Track the Progress of Business Goals and Objectives

Doing adequate research and making it a priority to implement changes into your business to achieve
growth is just the first step. You will also need to find ways to measure your progress to ensure that you
remain on track with your plan. Benchmarking can be a useful tool for tracking the progress of your
company’s goals and objectives. A benchmark is not merely a ranking, but shows the gap in performance
that many businesses face. With benchmarking, you can watch as this gap gradually closes as your
business becomes closer to reaching its goals.

Discover New Opportunities for Rapid Growth

BenchmarkingDo you ever feel like your company is stuck in a rut, or not moving at the pace it needs to
in order to keep up with modern trends and changes in the industry? This is a common concern among
businesses in all industries. Businesses often look inward to build success when they should also look
outward, too. By looking at other businesses that have proven their success, you can determine why
they are doing so well and then develop a new plan to improve your performance to match or exceed
your competitors. Benchmarking has the ability to help businesses discover new opportunities that can
help boost growth.

Motivate Staff and Hold People Accountable

Benchmarking can have a direct effect on the people that surround you, including your staff. Over time,
employees can become too comfortable in their positions, which can result in stagnation. Performance
can gradually lower as staff become bored or lack challenges in their roles. Benchmarking can act as a
source of motivation. It can encourage your employees to work toward goals. The benchmarking tool
can also hold people accountable for their actions or lack thereof. By ensuring that your employees
understand what “good performance” is, you can set a precedent for what they can expect in the future.

Boost the Performance of Business Sales

How your sales perform can essentially make or break your business. However, many business owners
lack the insight they need to understand why their sales have fallen over time. When you benchmark
your sales figures, you can learn a lot about your business, such as how much other competitors are
selling compared to your company, the size of other sales teams, and whether or not your competitors
have formed partnerships with major companies. You may also find that your competitors are offering
benefits that you do not, such as more days off a week for their sales teams or a larger salary to
encourage better performance.

Improve the Quality of Products Sold by a Business

raising hand to talk about Benchmarking In BusinessYou have probably used a lot of time, money, and
resources to provide your customers with the best products possible. However, changes in the industry,
new trends and technology, and other environmental changes can impact a product’s value and the way
that it functions over time. Many companies use benchmarking to improve the quality of their products.
This often involves studying their competitors’ products to determine how they outperform similar
goods. This can result in improvements to a company’s products, which will ultimately affect customer
satisfaction and their bottom line.

Benchmarking

Definition: Benchmarking is the process of continually improving the business or the organization by
evaluating the scope for improvement, comparing the current position with that of the previous one or
with the business practices of the relevant competitors, thereby establishing standards to be achieved.

For Example, A food delivery service chain was facing a problem of delay in delivery owing to customer
complaints and dissatisfaction with the service.

The company prepared a team to conduct process benchmarking for this purpose. The team observed
and researched on the strategy of one of its competitors who was taking the market by storm. It found
that the competitive brand has installed the GPS trackers in the delivery bikes.

Thus, it can easily track the position of its delivery person and monitor their timing and efficiency.

The company followed the same strategy and was able to regain the customer’s trust over the brand
and increased the level of satisfaction from its service.

Advantages of Benchmarking

Benchmarking is essential for organizations to sustain high-level competition and to keep up with the
customer’s requirement and needs.

• Improves Learning Methodology: Benchmarking paves the way for idea generation and sharing
of proven business practices which can be seen as a learning experience for the companies.

• Initiates Technological Upgradation: Through this strategy, the companies get to know about the
new technology and techniques which have been adopted by the market leaders. The companies can
accordingly plan for up-gradation of its technology to sustain the competition.
• Improve Company’s Standards: The company analyzes and studies the standards of the
competitors. This facilitates the company to raise its standard of production and products accordingly.

• Enhances Work Quality: It leads to organizational growth since it improves the overall quality of
the output and reduces the chances of errors due to the standardization of business operations.

• Cope Up with Competition: Knowing about the competitors’ business and their strategy, helps
the company to design its strategies efficiently. It also facilitates the company to be updated with the
recent developments and technology, hence beating the market competition.

• Improves Efficiency: The overall efficiency of the employees increases with this practice since
standardization of work motivates them to perform better without making many mistakes.

• Increases Customer Satisfaction: Through benchmarking, the company collects sufficient data on
customer’s needs and wants through customer feedback. This information helps the company to
enhance the customer experience and satisfaction level.

• Help Overcome Weaknesses: These strategies help the company in finding out its shortcomings
and working over them to get the desired results.

Disadvantages of Benchmarking

As we already know that benchmarking requires a lot of expertise and a vast collection of data. It,
therefore, becomes difficult for some organization to execute its strategies in the desired manner.

Following are some of its limitations, in this context:

• Lack of Information: Sometimes, the company is unable to gather adequate information for
benchmarking. This leads to an improper or inadequate comparison of the company’s performance with
that of its competitors.

• Increases Dependency: The companies tend to depend on other companies’ strategies to

become successful. In this process of following the market leaders, they sacrifice their individuality and
uniqueness and starts following the path shown by others.

• Lack of Understanding: At times, companies adopt benchmarking for the sake of doing so, rather
than finding out the necessity of it. It fails to understand its weaknesses while keeping an eye on the
functioning of its competitors.

• Copying Others: Some organizations don’t understand the actual purpose of this strategy and
start copying their competitors in every aspect. This may even lead to a downfall of the business.

• Incorrect Comparison: It demands a comparison between two or more companies belonging to

the same industry and competes with each other. But sometimes, the companies make irrelevant
comparison resulting in poor benchmarks.

• Costly Affair: It requires a team of experienced personnel who have excellent analytical skills and
expertise in the area. Thus, increasing the administrative expenses of the company. Even the
implementation of the changes involves capital expenditure at times.