Why benchmark - attaining exceptional performance
Benchmarking Training
Why benchmark?
Although many organisations initiate benchmarking projects because of some dubious reasons; for practical purposes the only reason to benchmark is because you recognise that somewhere, somehow you are not as efficient or as capable of satisfying your customers as your competition - whether currently or because you have spotted a trend in the market that you need to exploit, follow or respond to.
There are two key drivers for an organisation - profitability and revenue growth (the former being a function of the latter after costs) and there are many variables that impact on these. The key to maximising both is to understand where competitors are better than you - where customers value it. It is of little value having the best process for selling insurance if what customers really want is an easy to use claims process and yours isn't! Similarly it is no good having an extremely slick sales process for commodities if the delivery is poor, patchy and unreliable.
As the diagram shows, processes, although an ephemeral component of an organisation (as opposed to more durable items such as hardware and fixed assets) because they change easily, are critical for profitability as delivery of products/services is crucial to customer satisfaction, payments and ultimately profit. Similarly reputation (ephemeral) is critical to growth but can be lost all too easily - especially if processes/people do not deliver [c/f Arthur Andersen].
Although benchmarking is a measurement process and does generate comparative performance measures, it also about attaining exceptional performance. The practices that lead to exceptional performance are called enablers. Thus the process of benchmarking results in two types of outputs: benchmarks, or measures of superior performance, and enablers. Process enablers are developed to meet a specific business need within the context of a specific business environment and company culture. This is why it is of little value to 'steal' from others because you will not have explored whether and where their business practices are relevant or transferable to yours.
~ Neil Jones ~
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