Benchmarking is a systematic and continuous process that enables organizations to identify world-class performance and measure themselves against that. It is a tool that enables the investigation and the achievement of excellence, based on the realities of the business environments rather than on internal standards and historical trends.
There are many good reasons for organizations to benchmark. First, doing so can help them to stay in business by enabling them to outperform similar organizations, including competitors. Second, it ensures that the organization is continually striving to improve its performance through learning. Benchmarking opens minds to ideas from new sources, both within the same industry and in unrelated sectors.
Everything you need before you can begin benchmarking
- A comparable set of peers to benchmark against: This means comparing against companies of a similar size, geography, business type, or other characteristics.
- A combination of quantitative and qualitative surveys: A quantitative survey delivers hard data to compare, and a qualitative survey provides background information, context, and best practices.
- The right level of detail: The best benchmarks are neither too general nor overly detailed. For example, you can’t just compare the entirety of a contact centre from different banks. You must delve deeper into each business line or queue to ensure that you compare apples to apples.
At Burnie Group, we benchmark different sets of businesses such as everyday banking, credit cards and lending, direct investments, savings, wealth management, small business banking, business banking, and insurance. We also compare across various channels, such as phone, IVR, online, mobile, chat, and SMS.
3 tips for better benchmarking
1. Benchmarking is not a stand-alone activity
To succeed, benchmarking must be part of the journey of continuous improvement. What value is there in knowing where you stand, if there’s no follow-through to better your processes and output? For example, in the pursuit of operational excellence — optimizing people, process, and product — you must holistically adopt a change management strategy. Focusing on the customers’ needs, keeping the employees positive and empowered, and continually improving the current activities in the workplace is the ultimate goal of the operations journey, and benchmarking is an integral part of that voyage.
2. Benchmarking is not just competitive analysis.
Benchmarking goes further than a simple examination of the pricing and features of competitors’ products or services; it considers the output and the process by which the output is obtained. Additionally, benchmarking is more than market research because it considers the business practices that enable the satisfaction of customer needs and thus helps the organization to realize superior business performance. Many definitions of benchmarking exist, each offering slight variations on common themes.
3. Benchmarking isn’t a “one-and-done” activity
Benchmarking is not a static one-time exercise, it is ongoing. By regularly studying and comparing your benchmarks to your competition, the industry, and the individual processes of your company, you allow them to evolve to meet changing demands and requirements. By keeping your benchmarks fluid, you ensure that your business is following best practices, resulting in an increase in productivity and profits.
When executed correctly, benchmarking can be a powerful impetus to change, driving home sometimes uncomfortable facts and convincing leaders of the need to embark on improvement efforts.