Benchmarking is a fact-based assessment of how well a company’s processes compare to those of “Top Performers” in the client’s industry and among other businesses. Competitive benchmarking evaluates how and where your business compares to its competitors. Benchmarking enables you to evaluate the performance of your business in relation to that of your opponents and other best-in-class companies by utilising a set of specified parameters. An excellent tool for locating and prioritising opportunities for process or performance improvement is benchmark reporting. It is a form of comparative data analysis that aids in locating prospective improvement areas. Regardless of the degree or combination of levers used, it offers a factual foundation for cost reduction efforts.

It is crucial to decide what to benchmark before beginning an exercise in benchmarking. What should be benchmarked mostly depends on the enterprise’s top issues and the difficulties the sector is facing. Making informed decisions and growing your business depend on monitoring its success. Comparing a company’s measures to those of the competition to identify opportunities for improvement is known as competitive benchmarking. Comparisons can be made against internal peers or external competitors once the key areas have been determined. Comparing several data, including compound metrics, physical metrics, and financial analytics, might highlight inefficient locations. Although the depth and breadth of the benchmarking process can be adjusted, it’s still vital to take time, money, and data availability into account.

Comparing data is the simplest aspect of competitive benchmarking. As benchmarking advisers, we assist clients in comprehending the “why” behind the facts while doing benchmarking research so they may use that understanding to gain a competitive edge.

Companies use competitive benchmarking to:

• Gain an independent perspective about how well you perform compared to other companies
• Compare performance between product lines/business units in your own company
• Understand why the margins are less than the competitors
• Identify what the competitor is doing differently
• Identify what metrics, in particular, can be improved
• Determine where in the cost structure there is a scope to cut costs
• Hold people more accountable for their performance
• Drill down into performance gaps to identify areas for improvement
• Develop a standardized set of processes and metrics
• Enable a mindset and culture of continuous improvement
• Better understand what makes a company successful
• Identify ways to meet customer needs
• Identify the organization’s strengths and weaknesses
• Benchmarking broadens people’s experience base and increases knowledge
• Technical breakthroughs from other industries that may be useful can be identified early