The Crucial Facts to Consider about Successful Business Benchmarking

Posted by Kate McCullough on April 22nd, 2017

Benchmarking or business benchmarking is the process of measuring the performance of the business metrics. The motto of benchmarking is finding the way of measuring the performances in respect of the best practices in the market. It may be in comparison to a particular company or an entire array of companies in certain form of industry. In short, benchmarking is the way of measuring your business – its progress and expenses over the period, along with the chances of progresses.

In short, benchmarking can be coined as the process of total quality management for a business. In this process, the lacks and the scopes of improvement for a business are figured out. In this regard, the experts divide the complete benchmarking process into several parts. They are –

• Strategic benchmarking
• Comparative benchmarking
• Financial benchmarking
• Generic or functional benchmarking

Strategic benchmarking is the process where the strategies need to be measured in respect of the benchmarking standards of other companies or the best practices in the market. This kind of benchmarking helps to decide about the required modification of the strategic fields. This kind of benchmarking process helps the companies to evaluate their respective methods of progress.

A few matters are carefully measured in the strategic benchmarking. One of these matters is a cost reduction method. The benchmarking process sometimes figures out the extra costs of the company. A company sometimes bears with the burdens of extra costs due to following some wrong strategies. They are as followed –

• Energy cost
• Labour hire costs
• Telco costs
• Waste management costs
• Lighting costs
• Transport costs
• Freight forwarding costs
• Logistics processing
• Waste managing costs

Among all these costs, energy cost saving is the most important as it remains hidden most of the times and keeps on draining out secretly.

In order to control all sorts of costs, it will be wise to hire properly managed consultants, who can measure the cost saving components for the current business processes of the companies. However, the energy cost reduction consultant needs to consult the reports of comparative, financial as well as functional benchmarking reports before providing a conclusive suggestion.

The comparative benchmarking is a process of comparing a business process with the competitors as well as the leaders in the market to figure out the lacking or the strategic mistakes. On the other hand, financial benchmarking will give a clear idea regarding the financial costs of the company. Here, it is better to clear out that apart from processing of logistics and energy consumption, a company sometimes face troubles with waste management issues as well. It is, therefore, a better idea to include a waste management consultant in the process of business benchmarking.

Here a question may certainly come up whether the inclusion of the consultants will cost more to the companies or not. In order to get the ideas of controlling the costs, these consultants need to take the help of functional benchmarking, where the experts will evaluate similar processes or operations of other companies before reaching to their conclusions.

The process of business benchmarking is certainly a crucial process for every company, which will not only help to reduce their extra costs but also improve their quality of working to outrun the competitors and lead the market.