Benchmark analysis is, generally, comparing the business processes and performance metrics of one industry with the best practices of other industries. In other words, benchmark analysis exemplifies the media echo of the competitors. It is when the management identifies the best companies in the industry or any other area of similar processes and evaluates on the basis of the results of those processes that are studied as targets and their own results. They learn the methods of performance of the targeted industries and the way they function. An array of research techniques may be required as the benchmark analysis is applied to any business function. In this way, a standard of comparison is used while assessing the direct competition with the company.
Benchmark analysis strategically manages the evaluation of various aspects of the best practices among the business processes within the industry. This helps companies to develop strategies of adopting such best practices. The benchmark analysis may be a onetime function but is also considered a continuous process of looking for changes for the betterment of the company. There is a particular procedure that needs to be followed for the benchmark analysis. You, first, need to identify the problem area in order to determine the research technique required for that specific area, such as focus groups, in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, and financial ratio analysis.
Hereafter, identify the leading organizations in these areas by consulting customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy for study. You, then, need to learn the best practices of those leading worthy companies. You can attain additional information by visiting the company and frankly speak to the CEO about the purpose of your visit. You may visit a company while you are well prepared with a strategy of how to go about acquiring information about the company in a fair manner. Once you have acquired information on the company, you can make a report after that and provide it to the company so that they can make necessary changes and corrections to modify sensitive and proprietary information. Subsequently, the best practices can be implemented in your organization with suitable measures. As benchmark analysis is a continuous process, the practices can be improved in the future as well.
Nevertheless, experts in the business field spot few barriers that can hamper a company’s efforts for a successful benchmark analysis. This happens when the facets of core business processes, such as quality, price, and reliability of the end product or service made available to the customers are unexamined. Also, when inadequate people or technology resources, such as workforce, technology and funding are utilized, the purpose of the benchmark analysis may be irrelevant. The analysis for benchmark may not be appropriate when there is unwillingness or inability in accepting the legitimacy of business ideas or practices from sources out of the organization, as many may not be comfortable with change. However, such people should be assured that it is not implemented to find fault but is used to help the company grow as well as improve in this business world which is evolving at a rapid pace.
The speed of conducting the benchmark analysis also affects the process for benchmarking, when there is little time for a scope of improvement in the process. When training has inadequate follow-up, where the workforce is not provided enough training for making the necessary changes in time for effectiveness,