Benchmarking is a method of analyzing competitors in order to find better solutions and implement them in one's own company. When conducting benchmarking, a company compares its work with market leaders and decides which aspects of its activities need improvement. Based on the results of benchmarking, the company should make a decision on implementing changes to improve its own efficiency. Objects of such research can include:
- business processes;
- marketing strategy;
- products and services;
- pricing policy.
In large companies, benchmarking is a systematic process that is constantly ongoing. It helps to understand the success factors of other companies and how they have achieved their success. By comparing oneself with them, one can get an answer - what is missing and how to catch up or even surpass competitors. Benchmarking is conducted in order to find new ways of development, improve the organization's work and plan further actions. This allows the company not to miss new solutions of competitors, with the help of which they can gain an advantage over you. The company always understands market trends and timely reacts to changes.
Different processes can be the object of research. For example, it is not necessary to study the experience of competitors - benchmarking can be carried out within the company to improve the interaction between departments. Therefore, benchmarking has several types.
- External benchmarking is the most common type of benchmarking, which aims to study the practices of other companies. Depending on their own ambitions and tasks, the object of research may vary. The company can analyze its immediate competitors, with whom it competes in its niche. Another source of information can be market leaders. In this case, the company conducting benchmarking may not compete with them, but strive to reach a new level.
- Internal benchmarking is carried out to compare the work of different departments. The object of comparison can be the performance indicators of departments, as well as the exchange of experience and solutions that help in their work. For example, one department started using a sprint system, which increased its efficiency, so it was decided to implement this methodology in other departments. It is also possible to compare the current performance indicators of the entire company as a whole with those from previous years.
- Functional benchmarking is used when implementing new functions and ideas to find out how these processes are implemented in other companies. For functional benchmarking, it is not necessary to study competitors - you can analyze any companies where the desired solution has been successfully implemented.