Benchmark means comparing the processes of a business and performance metrics to the best industry practices from other organizations. Benchmarking dimensions include time, cost, and quality. For example, a company measures the performance of its products and services or processes with that of another company, which is considered to be the highest or top in the industry. “Best in class” is the benchmark set to identify internal possibilities for improvement and betterment.
For example, when a company launched a new website for disabled people, it compared its quality of content with that of the websites related to disabilities of top Indian companies. It also compared the cost and time involved in producing timely content on the website and how the content can be reached the desired audiences. This helped the company to set up weekly meetings and gain feedback from the team members working on the project.
There was also an external committee set up by the company that invited guest posts from the NGOs and organizations that were working in the disabled sector. This helped the company to diversify its reach and also set a higher benchmark than the existing websites.
The different types of benchmarking include internal, external, competitive, performance, and practice. In internal benchmarking, the processes are compared within the company. In external benchmarking, the processes are compared with other top organizations. In competitive benchmarking, the processes are compared with competitor companies. In performance benchmarking, the metrics are analyzed to set performance standards. In the practice of strategic benchmarking, successful organizations are evaluated and their strategies are studied.
For example, when a new employee was hired for the Assistant Manager post, he was given opportunities for growth in his job profile and how he had to work with his team to achieve a benchmark that was set up by the earlier Assistant Manager who had left the job. The new employee was given the target of achieving 50% more sales than the last quarter as the first criterion for the surety of his job. However, when the Assistant Manager got only 30% of the sales, he was given another chance to prove his talent and skills for another quarter.
In the next quarter, the new employee studied the strategies and evaluated the benchmark opportunities of the competitor companies. This helped him to understand how he can improve his sales by getting new interns or marketing professionals working in the industry. He also implemented the ideation of collaborating with service organizations that promoted brands and services on digital platforms. Thus, the next quarter’s results gave him a boost in sales by 70% and helped him to secure a job in the organization.
The new Assistant Manager also set a new benchmark when he introduced a new line of products that looked like offers for the existing products. This helped the company to tap into the younger audience who were not just aware of the products of the company because it dealt with the mid-aged audiences. The benchmark set by the new manager also helped the company to improve its brand presence in the online platforms and tap a new segment of users.