Russian businesses are adopting the experience of their Western colleagues. The pandemic has only strengthened the trend. We have already talked about unit economics, influencer marketing, customer journey maps and other methods. Today we will analyze another interesting tool – benchmarking.
What is benchmarking?
Benchmarking (from the English “benchmark” – a reference point) is the search, study and implementation of the experience of standard companies. The model is a competitor or an organization that has achieved success in its overseas data niche. The geography extends not only to Russia, but to the whole world. This guarantees the reliability of the information.
Ideally, benchmarking is a continuous process. Businesses should constantly adopt best practices and improve. In reality, companies resort to it when checklists for newbies and experienced marketers there is a crisis or a need for change. It shows is benchmarking how far the company has fallen behind the leaders and what needs to be done in such a situation. Not only weaknesses but also strengths are identified.
Xerox is considered the pioneer in benchmarking. In 1979, the company lost a large share of the market. In search of the cause, managers moved to Japan to study the experience of their Eastern colleagues. Fuji agreed to cooperate. As a zn business directory result, Xerox reduced costs, increased productivity, and triumphantly returned to is benchmarking the industry. Similarly, the company improved logistics, relying on the work of LLBean.
The essence of benchmarking
Benchmarking is a comparative analysis. The company compares itself with leaders and borrows positive experience, starting from the modernization of small operations and ending with the optimization of all departments. Unlike other methods, benchmarking relies not only on quantitative but also on qualitative indicators (for example, the quality of products, service).
The purpose of benchmarking is to study and copy the business processes of the standards. The result will be an improvement of one or several indicators or the entire direction. The tool performs four functions:
- Analytical. Identifying pros and cons. Calculating and comparing resources;
- Cognitive. Search for innovations and their implementation in the company;
- Research. Identification of leaders, selection of indicators, their analysis and comparison;
- Economic. Optimization of expenses and pricing policy.
Most often, one function is implemented. Not the entire model organization is studied, but only the areas or metrics of interest. For example, production, logistics, marketing, personnel management.