Strategic Benchmarking

Strategic benchmarking is a powerful tool for identifying best practices and

improving processes. In today's rapidly changing world, it's more important than
ever to stay ahead of the competition by implementing a strategic benchmarking
program.

by Yippella De Jesus
Definition of Strategic Benchmarking
1 What is It? 2 Why is it Important?

Strategic benchmarking is the process of By benchmarking strategically, you can

comparing your company's performance to that discover best practices that will help you
of industry leaders, in order to identify areas improve quality, reduce costs, and gain a
for improvement. competitive edge.
Benefits of Strategic Benchmarking
Innovation Cost Savings Improved Quality

Benchmarking inspires Through benchmarking, Benchmarking helps

innovation by encouraging companies can identify areas companies to identify best
companies to identify and where they are overspending, practices and improve their
adopt new ways of working. and make changes to reduce processes, resulting in higher
costs. quality products and services.
Types of Strategic Benchmarking
Product Benchmarking
Product benchmarking compares
the performance of similar
products or services offered by
different companies. This can be
useful in identifying areas for
improvement.
Process Benchmarking
Process benchmarking compares
the performance of similar
processes within different
organizations. This can be useful
in identifying best practices and
improving processes.
Financial Benchmarking
Financial benchmarking compares
the financial performance of
similar organizations. This can be
useful in identifying areas for cost
savings or improvement.
Steps to Implementing Strategic
Benchmarking
Choose Metrics
Once you have defined your objectives,
you need to decide which metrics to use
for comparison.
Collect Data
Collect data from your benchmarking
partners to determine their best practices
and performance metrics.
1 Define Objectives
Before starting a benchmarking project,
it's important to define what you hope to
2 achieve.
3 Select Benchmarking Partners
Choose organizations to benchmark your
performance against. These should be
4 industry leaders or organizations with
similar objectives to your own.
5 Analyze the Data
Once you have collected your
benchmarking data, analyze it to identify
areas for improvement.
Examples of Successful Strategic
Benchmarking
Airline Industry
The airline industry has long used
benchmarking to improve
efficiency and customer
satisfaction. Southwest Airlines,
for example, closely monitors its
turnaround times, and has one of
the quickest turnaround times in
the industry.
Fast Food Chains
Fast food chains like McDonald's
and Burger King use
benchmarking to improve their
drive-thru operations, resulting in
faster service and higher customer
satisfaction.
Tech Companies
Tech companies like Apple and
Google benchmark their employee
retention rates against other
industry leaders, helping them to
attract and retain top talent.
Challenges to Implementing Strategic
Benchmarking
Lack of Data Resistance to Change Competitive Concerns

One of the biggest challenges
of strategic benchmarking is
obtaining reliable and
comparable data from
benchmarking partners.
Employees may be resistant
to change, even if it means
implementing best practices
identified through
benchmarking.
Companies may be hesitant to
share sensitive data with
potential competitors, making
it difficult to find appropriate
benchmarking partners.
Keys to Effective Strategic Benchmarking

1 Focus on Objectives

Make sure your benchmarking project is aligned with your company's overall strategic objectives.

2 Choose Appropriate Partners

Choose benchmarking partners that are aligned with your strategic objectives, and have a track
record of success in the areas you are interested in.

3 Collect Comparable Data

Ensure that the data you collect is comparable to your own organization, and that the metrics you
are using are meaningful for your industry.

4 Engage Employees

Involve employees in the benchmarking process, and focus on communicating the benefits of
benchmarking to gain their buy-in.