Do you think benchmarking is just another fad, or is it really useful for all firms? Why, or why not? How could benchmarking be used in your place of employment? Does it rate as a viable tool for future development?
Benchmarking is an important tool that is used by a number of companies across various industries. It allows a company to rate its products and services offering, organizational activities and processes systematically in comparison to other similar players in the industry. Benchmark is basically a point of reference to which comparisons can be made.
It can be used by various companies from different industries for a number of processes and activities in different departments. Benchmarking can be done on performances, financial aspects, product and services offering, strategy and operations, competitive analysis among others. For example a company making computers would use benchmarking to understand its position in comparison to other computer makers. This would be done in bits and parts, processing speeds, graphics, ease of use, post sales services, price and durability among others. This would make the firm understand its position in different aspects individually which are core in making a computer in turn enabling them to fine tune their products.
Benchmarking is a useful tool as it makes the firm understand where it stands in different aspects of the business. It can be used to identify and define a price for a product or service. It can be used as a feedback for firms to adjust their processes and offerings. It can also be useful the firm’s current position in term of its long term goals. Ranking products and services with the competitors and understanding the differences is also an advantage of benchmarking.