Benchmarking

What is Bench marking

Bench marking basically setting standard of performance and then comparing the actual performance with those set standards. The idea is to achieve best practices in the organization. The best practices are procedures information is gathered and then standards are established to be following.

Types of Bench-marking

1.       Internal Bench-marking

2.       External Bench-marking

1.Internal bench-marking

Internal Bench marking focuses on comparison different unit within industry.

2.External Bench-marking

This type of bench-marking is not limited to the specific industry. The standards outside the organization may also be selected to follow.

Bench-marking process

1.Senior Management involvement

 The bench-marking is a very complex and important process it requires specially expertise and a lot of experience of business. Therefore some senior management person must be responsible for oversee the process.

.

2.Identify Critical Areas

The other step is to select the critical area which required the benchmarking. It is to be noted that every business have some key operations and normally benchmarking are done for those area. The concept is that if the key area or critical areas are upto required level of performance. The effect will be noticed on other areas as well.

3.Performance indicator

 Set performance indicator for the identified area. The performance indicator means how the critical areas would be evaluated in term of performance.

4.Get Data

The first step is to gather data for setting the standards. This is more important stage if the data is not gathering properly, it would not be possible to establish the accurate standard and the whole process would be at stake. Therefore some experience and senior level person should be given the responsibilities to overview the process of gathering data

5.Comparison of Performance

 After appropriate time period compare the performance and find out the shortcoming and deficiencies in the performance of the organization. It is continue process and one must not expect that by setting standards the desired performance could achieve.

6.Corrective Measure: - 

The adjustment is made to achieve the desire level of performance as set by the bench-marking.

7.Monitor the Result:- 

The comparison after appropriate period of time will not work , the continuance monitoring of is also required. The monitoring would put special emphases on the adjustment made by management because if the mistakes are repeated then there is fair chance of failure in achieving the objective set by bench marking.

Advantages of Bench marking

1.Knowledge of best practices

 The bench-marking is involved the study the other organization . this bring new knowledge to the business and also play important role in skill development of the individual. The more knowledge improves your profile value.

2.Establishing the Position

The bench-marking process is really helpful to identify your position in the market. The positioning is one of the best tools to measure your performance in the market,

3.Improve Efficiency

Best practices have a primary objective to improve efficiency of different process in the organization to maximize the profit.