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ASSIGNMENT- 1
It the process of measuring the performance of one's company against the best in the
same or another industry. It is using the knowledge and the experience of others to
improve the organization. It is analyzing the performance and noting the strengths and
weaknesses of the organization and assessing what must be done to improve.
OBJECTIVES OF BENCHMARKING
Becoming competitive.
Improving industry best practices.
Defining customer requirement.
Establishing effective goals and objectives.
Developing the measures of productivity.
PROCESS OF BENCHMARKING
The following six steps are the core techniques of benchmarking:
Decide what to benchmark.
Understand the current performance of your organization.
Do proper planning of what, how and when of benchmarking endeavor.
Study others well (the practices or system you wish to benchmark)
Gather data and learn from it.
Use the findings.
It involves the following;
1. Planning: The planning phase determines the need for benchmarking and the area
which requires it. The competitors and means to collect the relevant data are also
decided at this particular stage.
2. Analysis: The Company then analyzes the data so gathered to find out the
strengths of the competitors, list out its weaknesses and ways of improvement.
3. Integration: At this phase, the analysis is reported to the top management, and
after their approval, the desired action plan with a well-defined strategy, is
developed.
4. Action: Now, the management has a workable plan; at this stage, the employees
execute the benchmarking plan.
5. Maturity: The final stage is maturity; it is at this phase, the result of using
benchmarking to improve the business operations can be observed.
TYPES OF BENCHMARKING
There are four major types of benchmarking:
INTERNAL BENCHMARKING:
EXTERNAL BENCHMARKING:
In external benchmarking, the companies compare their performance with that of its
competitors in the industry or across the globe. Usually, by the data collected through
associations or third party.
COMPETITIVE BENCHMARKING
FUNCTIONAL BENCHMARKING
Improves Learning Methodology: Benchmarking paves the way for idea generation
and sharing of proven business practices which can be seen as a learning
experience for the companies.
Initiates Technological Upgradation: Through this strategy, the companies get to
know about the new technology and techniques which have been adopted by the
market leaders. The companies can accordingly plan for up-gradation of its
technology to sustain the competition.
Improve Company’s Standards: The company analyzes and studies the standards
of the competitors. This facilitates the company to raise its standard of production
and products accordingly.
Enhances Work Quality: It leads to organizational growth since it improves the
overall quality of the output and reduces the chances of errors due to the
standardization of business operations.
Cope Up with Competition: Knowing about the competitors’ business and their
strategy helps the company to design its strategies efficiently. It also facilitates the
company to be updated with the recent developments and technology, hence
beating the market competition.
Improves Efficiency: The overall efficiency of the employees increases with this
practice since standardization of work motivates them to perform better without
making many mistakes.
Increases Customer Satisfaction: Through benchmarking, the company collects
sufficient data on customer’s needs and wants through customer feedback. This
information helps the company to enhance the customer experience and
satisfaction level.
Help Overcome Weaknesses: These strategies help the company in finding out its
shortcomings and working over them to get the desired results
CASE STUDY – INTELLEX; USING BENCHMARKING TO ITS DRIVE GROWTH
BENCHMARKING:
Previously Intelex faced several challenges scaling their organization:
Transitioning the organization from a small company structure to a fast growth,
global competitor
Implementing financial and operational systems to manage budgets and planning.
Getting the management team alignment in terms of key metrics and targets.
Initially, the Finance team started with some publicly available surveys, but quickly found
they needed more depth and different company cohorts to compare themselves as they
expanded.
Hence they discovered the OPEXEngine Benchmark Engine as a third party benchmarking
platform. OPEXEngine provide comparisons to guide decisions and help manage
operating risks. Intelex adopted Process and operating benchmarking by using this
database to drive its growth. The Benchmarking helped them analyze and improve their
organization and get a clear idea where to invest their resources.
With the help of it, the company benchmarked its Budgeting and planning process.
The financial team using the benchmarking platform then became able to review similar
companies in terms of revenue and business model. It helped them to look at similar size
companies, sometimes similar deal sizes, sometimes public companies or certain growth
rates. It helped the management teams anticipate results based on past information. It
makes it easier for finance managers to produce more accurate budgets and perform
what-if scenario analysis to be able to accurately guess what will happen tomorrow.
RESULTS AFTER USING THE BENCHMARKING PLATFORM: Intelex grew from 200
employees in 2015 to a company with global offices with almost 500 employees in
2017. It evolved both operationally and financially. It has grown to 500 employees with
global offices and over 30 percent growth in 2017 to become one of the fast growth SaaS
companies in Canada, with over 1,100 clients and 1.5 million users worldwide now. It has
reduced risk in resource allocation decisions, drove operational change and efficiencies
throughout the organization helping the management team to move quickly on
operational challenges and making it one of Canada’s fastest growth SaaS companies.
https://theinvestorsbook.com/benchmarking.html
http://tqmgroups.blogspot.com/p/benchmarking.html
https://www.opexengine.com/case-studies/intelex-case-study-using-benchmark
ing-to-drive-growth/