Benchmarking is a beautiful thing when you actually do it right, but it has so many applications. How do you decide on the scale of the benchmarking, and where do you start even after that? In an article at Minutehack, Gary Barbour provides some tips to help you benchmark confidently.
If you genuinely are not sure how effective some groups or processes in your business are compared to others, then you might want to benchmark that, if you think there are enough new efficiencies to gain from it. By comparison, benchmarking against other businesses all but guarantees you will gain valuable insight, but it is also much more difficult to do well, because it depends upon having reliable data. It can still be done of course, but it will be more time-consuming to locate the right data.
Barbour believes that the service sector especially has something to gain from benchmarking, in order to truly understand which providers are producing the best value:
By scaling yourself against your peers, you’re able to honestly measure where you sit within the industry, based on success and performance, as opposed to merely turnover, reputation and company size. The use of big data can help organisations gather relevant information and then outline how this can be translated into providing a high quality service. …
The ubiquity of technology has allowed smaller companies to take on larger established industry giants by allowing them to offer a competing range of services without the same burdensome infrastructure of a large headcount and asset base.
Benchmarking is useful for taking a hammer to attitudes of “This is how we’ve always done things,” because the way that things have always been done might be horribly outdated, and benchmarking will illuminate that. Furthermore, the hope in the future is that benchmarking will become a real-time process, allowing for faster corrections and vast savings. The Internet of Things is likely to be involved in its development.
For a deeper discussion, you can view the original article here: https://minutehack.com/guides/benchmarking-the-key-to-untapped-value