How Benchmarks Hit the Goals of Business Hub?

Nowadays organisations are running towards to satisfy their aspiring targets and emphasis on reaching their ultimate goal. It not only deviates them from the focused path but also diverges the thirst of observing and learning, which are an inevitable element of the business services. The most effective way to overlook this quandary is to bring industry benchmarks into the limelight. Let’s see what benchmarking defines. Benchmarking is the process of data collection, of targets and comparators, which can be compared against those of another business. By adopting identified best practices, it is expected that performance levels will improve. Benchmarking includes gathering data about targets and comparators. Thus, the present levels of performance are often identified and evaluated against best practice. It helps organisations to spot aspects of their performance which need to be improved. However, benchmarking is more useful for helping firms catch up instead of innovating. 

Types of Benchmarking

1. Internal Benchmarking: Internal Benchmarking involves comparing one operating function with similar ones within the same organisation. Comparing performance with that of external organisations is easier. However, using internal benchmarking alone is unlikely to lead to innovative or best- practice solutions, because there is no scope to find out from other organisations.

2. Industry Benchmarking: In this approach, benchmarks are set by looking at what other organisations in the same industry as your organisation achieve. It can be divided into competitor benchmarking and non-competitor benchmarking.

• Competitor Benchmarking: Information is gathered about the performance of direct competitors. From a strategic view, the worth of competitor benchmarking is that if an organisation can match a competitor's performance in an area which was previously a central competence for the competitor. 
• Non-Competitor benchmarking: This is particularly relevant for not for profit organisations, for example, it can be useful to compare exam success rates between schools, or mortality rates between hospitals. Because these firms do not directly compete with each other, the exchange of data should be more transparent than in competitor benchmarking.

3. Functional Benchmarking: In functional benchmarking, internal functions or activities are compared with those of the best external practitioners, no matter of their industry. So, for example, a telephone banking service could compare its call answering times to those in an organisation in another industry which encompasses an excellent reputation for answering phone calls quickly and efficiently. 

Equally, a railway company which provides onboard catering could seek opportunities to enhance by sharing information and comparing its catering operations with those of an airline industry that has been chosen as the best in terms of in-flight catering. Through functional benchmarking, an organisation can attempt to find new, innovative ways to create a competitive advantage, as well as solving threshold problems. 

Stages of Benchmarking

Also read, How Certificate of Entitlement Help Expo 2020 Participants in Reclaiming Tax?

Merits of Benchmarking

• Standard Performance: Benchmarking can evaluate a firm's existing position, and provide a basis for determining standards of performance. 
• Comparability: Benchmarking can be useful for setting objectives and targets. Budgets need to be challenging and looking at the results of comparator organisations to achieve the target budgets set by the company. Cross comparisons bring about different ways of doing things. 
• Versatile Implementation: It may be a good method of implementing change, people being involved in identifying and seeking out alternative ways of doing things in their own areas. 
• Cost Effective: It helps with cost reduction, or identifying areas where improvement is necessary.
• Effective Operations: It improves the effectiveness of operations. It delivers services to an outlined quality. 

Demerits of Benchmarking

• Ineffective Output: It infers there is one best way of doing business – arguably this boils down to the difference between efficiency and effectiveness. It may bring an effective process but the output might not be useful
• Outdated Solutions: It may be yesterday's solution to tomorrow's problem. For example, a cross channel ferry company might benchmark its activities (e.g. speed of turnaround at Dover and Calais, cleanliness on ship) against another ferry company, whereas the real competitor is the channel tunnel. 
• Unable to Catch-Up the Competitor:  It is difficult to catch up on the exercise rather than the development of anything distinctive. After the benchmarking, the competitor might improve performance in a different way. 
• Lack of Accurate Data: It depends on accurate information about comparator companies.

CDA on Benchmarking Services

CDA offers Benchmark measures to ensure operational effectiveness across three dimensions: cost, risk and service. We focus on aligning your operational strategy to business strategy. Ur benchmarking services provide managers with a way of identifying how well areas of firms are performing, with a regard to progress the performance of those areas which are currently underperforming. 

You may also read, Impact of UAE VAT and Tax Refund Scheme on Official participants of Expo 2020

CDA provides various business services that include CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software services and Due Diligence Services. If you have any queries or need any of our services, feel good to contact us. 

Hope you have got a clear idea about how benchmarks hit the goals of business hub. Still, you'd have thought, contact CDA. Our expert will call you back immediately and will offer you a one-hour free consultation.