Why Should Your Firm Benchmark?

The case for benchmarking suggests that a particular process in your firm can be strengthened. Some organizations benchmark as a means of both improving discrete areas of their business and monitoring competitor’s shifting strategies and approaches. Regardless of the motivation, cultivating an external view of your industry and competitors is a valuable part of managing in this world of change.

There are a number of core drivers of benchmarking initiatives in a firm.

• The most common driver for benchmarking comes from the internal perspective that a process or approach can be improved. Organizations will collect data on their own performance at different points in time and under different circumstances and identify gaps or areas for strengthening.
• Many organizations compare themselves to competitors in an attempt to identify and eliminate gaps in service or product delivery or to gain a competitive edge. The data gathered in a competitive benchmarking initiative offers specific insights into the competitor’s processes and thinking.
• The term: strategic benchmarking, is used to describe when a firm is interested in comparing its performance versus the best-in-class or what as deemed as world-class performance. This process often involves looking beyond the firm’s core industry to firms that are known for their success with a particular function or process.