If you are looking for competitive insight and evidence-based view of performance throughout your products and organizational lifecycle, you should start exercising benchmarking processes. Benchmarking is a process that delivers impressive results to the businesses, regardless of the industry and size of the business. It is a widely used global management tool that helps you
• Improve your strategy, business structure, leadership involvement, technology, innovation, quality, business economics, productivity, cycle time yields, staffing, skills, services, and activities • Reduce excessive costs and the expenses associated with compensations There are four types of benchmarking. Here we will discuss these types and their benefits so that you can understand which type you need to benchmark your business These four types of benchmarking are: 1. Internal Benchmarking Definition Internal benchmarking is a method of comparing your business process with a similar process within the same organization. The main aim of this benchmarking is identifying the best internal practices. This is the best way of looking at the structure of your business. It helps you identify the areas of your business which are doing well and the areas which need improvement. It makes your business more efficient. Benefits Internal benchmarking has a pile of benefits, such as: • It is cost-effective • The process is relatively simple and fast • Exercises good practices • This benchmarking encourages information sharing between different departments • Transfers lessons • A common language is used for internal benchmarking • Provides deeper insight into your own systems 2. Competitive Benchmarking Definition This is a method of comparing your product, service, or method with that of your competitors. This form of business benchmarking helps you understand the performance of your business and your competitors’ business. If you find that your performance is better than the competitors, then it’s fine. If you find your competitors are doing better than you, then you should analyze their business processes. If possible, you should employ the processes, which are working for your competitors. Benefits Benefits of competitive benchmarking are: • Compares alike process to determine the better exercises • Provides a detailed insight in the Competitor’s business • Helps to determine whether the partnership will be beneficial or not • Enables you to plan and set goals • Identifies similar regulatory issues 3. Functional Benchmarking Functional benchmarking is a method of comparing identical practices within similar functions outside the immediate industry. Functional benchmarking identifies the practices, which are superior in your functional areas. Benefits • Offers industry trend information • Quantitative comparisons • Enhanced improvement rate 4. Generic Benchmarking Definition Generic benchmarking is the process that compares unrelated business processes that can be exercised in the same or similar ways, no matter what is the industry. If you want to benchmark your business for being innovative and achieving insight into outstanding work processes. Here the main focus is no on business processes but on the work processes. Benefits Listed below are the benefits of generic benchmarking: • Provides high pay off • Identifies noncompetitive measurements • Provides broad and innovative perspective and ideas • High potential for discovery • Compares your business to global businesses A Final Takeaway You can choose any one of these four benchmarking ways. No matter which way you are choosing, make sure it can help you meet the goals for which you are trying to perform business benchmarking.
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