Benchmarking

Benchmarking

Benchmarking Jonathan Poland

Benchmarking is the process of comparing the performance of a business, product, or process against other businesses, products, or processes in the same or a similar industry. The goal of benchmarking is to identify best practices, areas for improvement, and potential opportunities for innovation.

To conduct a benchmarking study, businesses typically gather information about their own performance as well as the performance of other companies in the industry. This information may be gathered through a variety of sources, including financial reports, customer feedback, and industry data. The data is then analyzed to identify key trends and insights, and to compare the performance of the business against its competitors.

One key aspect of benchmarking is identifying areas for improvement. By comparing their performance to that of other companies, businesses can identify areas where they are underperforming and develop strategies to improve. For example, a business may discover that its competitors are achieving higher customer satisfaction ratings or lower operating costs, and use this information to develop strategies to improve its own performance in these areas.

Another important aspect of benchmarking is identifying best practices and potential opportunities for innovation. By understanding the strategies and approaches of other companies in the industry, businesses can identify practices that are working well and consider incorporating them into their own operations. Additionally, benchmarking can help businesses to identify potential opportunities for innovation, such as new business models, products, or services.

Overall, benchmarking is a valuable practice for businesses that want to improve their performance and stay competitive in their industry. By comparing their performance to that of other companies, businesses can gain valuable insights and develop strategies to improve and innovate. The following are examples of benchmarking.

Technology

A database firm benchmarks the query performance of products against the competition on a regular basis as part of their product development efforts.

Financial

A utility provides investors with a comparison of financial metrics such as operating margins against industry averages.

Marketing

An airline hires a consultant to benchmark customer service metrics such as customer satisfaction against key competitors.

Processes

A telecom company implements a new process for provisioning and benchmarks its results against industry best practices.

Markets

A trading firm benchmarks the decisioning and trading speed of its algorithms compared to what is known about the competition on the same exchange.

Services

A firm benchmarks its average fulfillment and delivery speed against key competitors.

Cities

A city benchmarks its quality of life measurements against other cities in the region or world.

Governments

A state benchmarks its healthcare costs and indicators of health such as life expectancy against other states in the same county.

Products

A solar module manufacturer benchmarks the conversion efficiency of its products against other solar manufacturers on a global basis.

Strategy

A social media firm benchmarks its spending on research & development against close competitors in the industry.

Operations

An IT operations team benchmarks its uptime against a top competitor that published their uptime figures in a media report.

Productivity

A data center is moving towards automating time consuming maintenance and support tasks. Before the project begins they seek employee productivity benchmarks from a consultant who is familiar with best practices in the industry.

Retail

A shoe retailer compares their sales per square foot with industry peers.

Learn More
Process Risk Jonathan Poland

Process Risk

Process risk is the risk of financial loss or other negative consequences that may arise from the operation of a…

Telecommuting Jonathan Poland

Telecommuting

Telecommuting, also known as remote work or working from home, is a type of flexible work arrangement in which employees…

Strategic Direction Jonathan Poland

Strategic Direction

Strategic direction refers to the long-term vision and direction of an organization, and it serves as a guiding principle for…

Channel Strategy Jonathan Poland

Channel Strategy

A channel strategy refers to the plan an organization uses to reach and interact with its customers. A channel is…

Trade Secret Jonathan Poland

Trade Secret

A trade secret is a type of carefully guarded information that gives a company a competitive advantage in the market.…

Two-Sided Market Jonathan Poland

Two-Sided Market

A two-sided market, also known as a multi-sided platform, is a market in which two or more groups of customers…

Organizational Capital Jonathan Poland

Organizational Capital

Organizational capital refers to the intangible assets and resources within an organization that support its operations and enable it to…

Accountability Jonathan Poland

Accountability

Accountability refers to the responsibility of an organization or individual to provide explanations for their actions and accept responsibility for…

Fixed Assets Jonathan Poland

Fixed Assets

Fixed assets are long-term resources that are owned by a business and are used to generate future economic benefits. In…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Key Employees Jonathan Poland

Key Employees

Key employees, or key personnel, are individuals who possess unique skills, knowledge, or connections that make their prolonged absence or…

What is an Economic Bad? Jonathan Poland

What is an Economic Bad?

An economic bad refers to a negative outcome or impact that results from business activity and consumption. This is in…

Upselling Jonathan Poland

Upselling

Upselling is a sales technique that involves encouraging customers to purchase higher-priced, add-ons, or upgraded versions of products or services…

Design to Value Jonathan Poland

Design to Value

Design to value refers to the design requirements and considerations that aim to maximize the value of a product or…

Administrative Burden Jonathan Poland

Administrative Burden

Administrative burden refers to the workload and effort required to comply with laws and regulations that do not directly contribute…

Decision Trees Jonathan Poland

Decision Trees

Decision Trees are a popular machine learning algorithm used for both classification and regression tasks. They are part of a…

Switching Barriers Jonathan Poland

Switching Barriers

Switching barriers are factors that make it difficult or inconvenient for customers to switch from one product or service to…

Bias for Action Jonathan Poland

Bias for Action

Bias for action is a mindset or approach that emphasizes the importance of taking action quickly, without extensive thought or…

Lobbying Jonathan Poland

Lobbying

Vertical integration is when a single company owns multiple levels or all of its supply chain.