When used as a quality assurance tool, benchmarking builds comparisons between your performance and the performance of your competition. Benchmarking can be used to identify core strengths and pain points, ultimately empowering a company with the data it needs to improve its operations. Modern and more robust data technology has made comprehensive data-driven benchmarking analysis accessible for businesses of all sizes and industries.
Baseline: Finding a Company’s Key Performance Metrics
Benchmarking requires that the company accurately track its performance metrics. Therefore, initiating the benchmarking process already involves the collection of valuable and important data which can be used in a variety of quality assurance strategies. Through this data collection, companies will discover their baseline performance and be able to analyze a wide selection of comparisons moving forward.
Compare: Identifying a Company’s Strong and Weak Performance Points
Comprehensive benchmarking between a multitude of industry competitors will show a company exactly where it stands. Companies are able to quickly improve their quality by identifying the areas in which they fail to meet the standards of their competitors. Further, companies can also identify the areas in which they excel and seek to promote themselves using this new knowledge. Over time, benchmarking can also be used to determine whether another company may be closing the gap in a company’s stronger areas.
In particular, benchmarking is often used to find a company’s position within a larger industry or a wider field of competitors. It is often used by companies seeking to grow internationally, to identify their place within a global market. Benchmarking can also be used to significant effect by companies who are new to an industry and thus are not yet certain where they measure up.
Improve: Using Historical Data to Encourage Upward Trends
Benchmarking is traditionally used to compare a business with its competition. But it can also be used to compare current data with historic data to ensure that the business is continuously trending upwards. Any downward trends would indicate backsliding that the company should address for the purposes of quality assurance and before a more serious issue develops. Retaining this historical data also aids a company in ensuring that certain standards are consistently met. A regular analysis of company benchmarking will provide the information a company needs to remain on top of its improvements and standards before there are negative repercussions.
Monitor: Making Corrective Actions and Measuring Results
Once benchmarking has been initiated, businesses can then take action to improve their performance and set targets. They can then use new benchmarks to determine whether their actions have improved the prior performance issues. Benchmarking enables a company to easily quantify the results of their actions. If the performance issues have been addressed, the loop can be closed and the performance maintained. If the performance issues have not been addressed, further action can be initiated. Comprehensive benchmarking offers the ability to make quite sophisticated comparisons; for instance, a business can see if improvement in one area adversely affects performance in another.
Benchmarking processes should be included in any comprehensive quality assurance program. They offer a particularly powerful method by which a company can target and achieve new standards of performance. Through benchmarking, businesses can more readily identify areas of improvement and reveal both their strengths and shortcomings within their industry. The more frequently benchmarking is completed, the more accurate the overall picture will be. Though benchmarking is used primarily to compare one company with other companies, it can also be used as an internal analysis tool for the betterment of business processes.