How to Benchmark

How to Benchmark
August 24, 2016 234Finance

By Suhaib Mohammed

Benchmarking is an important vocabulary in the business world. It is a process by which a company compares key performance metrics of their operations to that of other competitors in the same or similar industry.

More than 50 percent of big companies have conducted benchmark studies, according to a recent survey by The Global Benchmarking Network. Of these, 49% used Performance Benchmarking and 39% used Best Practice Benchmarking.

You need to conduct benchmark study for your company to identify gaps in your operation, fill those gaps with best practices and become more competitive in your industry. Here are 6 steps you need for conducing benchmark studies:

Get a focus

The primary goal of benchmark studies is to peep inside your competitions’  companies, see what they’re doing and incorporate their best practices to your company. To conduct proper benchmark studies, the first step process is to decide what to research on. In other words, what particular companies are you benchmarking and what specific metrics are you using to benchmark these companies in your research?

Plan  

The next step is to sketch a plan or device the method that you’ll use to conduct your benchmark studies. Here, you’ll put all your resources together to implement your project. Develop surveys and find existing databases that are available and relevant in conducting your benchmarking research.

Collect data

The next course of action, after a careful, detail planning is to collect data. What do the competitors do that you’re not doing? You can answer these kinds of questions through the methodology you have devised in the previous step.

Analyze the data

The next thing is to analyse your data. Here, you use statistical tools, instead of plain guesses, to examine and create your major findings. 

Recommend

After a careful analysis of where the company can improve, the next thing is to offer recommendations – suggest what to do next and how to do it – based on the major findings of your study.

Implement

This is the final and most important step in conducting benchmark studies. This is where the company takes action to improve, based on findings from the research.

So, ready to scale your business and increase profits? Ready, set, start benchmarking!

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Author: 234Finance

234Finance is an online hub that promotes African Entrepreneurship. We feature small and medium sized businesses on the platform, shedding light on the current and future developments in diverse sectors across Africa. We also provide free resources, share opportunities and events on our platform that entrepreneurs can benefit from and thrive in Africa’s tough business landscape.

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