Benchmarking

1. The Opportunities

Benchmarking simply involves comparing your business activities and processes with those of other organisations (see 3).

1.1 The simplest form of benchmarking is to compare costs.

• For example, utility bills or salaries.

1.2 Most benchmarking compares key performance indicators.

This tends to focus on productivity and efficiency.

• Some indicators can be expressed as simple statistics. For example, sales per employee, gross profit margins or wastage levels.
• Others may require qualitative, as well as quantitative, analysis.For example, to assess the effectiveness of training activities or levels of customer satisfaction.

1.3 Benchmarking often proves particularly successful when comparing processes.

This involves looking in detail at how other organisations carry out the same or similar processes.

• For example, what technologies and production techniques they use.

1.4 Benchmarking can also be used to compare businesses at a strategic level.

• For example, what strategic objectives organisations have, where resources are focused and what standards they work to.