How Performance Benchmarking can help you Ensure Efficiency and Cost-Effectiveness for your Business
Performance benchmarking is an incredibly powerful tool for optimizing an existing business process. Comparing your business outcomes to the industry standard or those of your competitors, you can gain several valuable insights about your brand. This short-read aims to give you a basic idea on what performance benchmarking is and how it can add value to your business.
What is Performance Benchmarking?
Performance benchmarking is a process by which the performance of a company is compared with the best performance being achieved - be it by a competitor or a company in a different industry altogether! This information is then employed to identify (and subsequently address) the gaps that exist in the company’s business processes.
For example, if you take 5 hours to manufacture a product that sells for USD 10,000, and your competitor takes only 2 hours to manufacture a similar product that also sells for USD 10,000, then this benchmark suggests that your production line can be faster. With such benchmarks, you can:
- Identify the areas in which the performance of other brands is better than yours.
- Compare the business processes of your competitors with your own.
- Make data-driven decisions for the improvement of your operations.
How Can Performance Benchmarking Add Value to Your Business?
- Performance benchmarking can help you build on your existing business processes and operations.
- It can also give you a measure of the effectiveness of your past performance.
- By improving the efficiency of your business processes, benchmarking can help you lower your operating costs.
- Benchmarking identifies the way your competitors operate, helping you maintain a competitive edge.
- By adapting based on the needs of your customers, benchmarking can also increase your customer satisfaction (which also contributes to customer loyalty).
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