-Benchmarking is not the picture seen on the slide -Benchmarking is used to build comparative reference points -You use benchmarking to improve your organization’s operations and effectiveness

WHY SHOULD WE BENCHMARK? -Saves time, minimizes costs -Don’t need to re-invent the wheel -Can improve the efficiency and effectiveness of organizations -Facilitates learning -Good for gathering information on the competition

-How do I benchmark? -You can benchmark against competitors, your own organization, and industry leaders -All benchmarking targets are relevant, depending on what you are trying to achieve

- COMPETITORS -Benchmarking against competitors allows you to take a good look at your competition, and see how you stack up against them -Competitors are less likely to share publically share information on their practices -IE. Chapters looking at how Amazon does things

INTERNAL ORGANIZATION -You can benchmark metrics within your organization. -For instance, you can look at the effectiveness of different Sales offices within the organization. -If one Sales office is doing better than the others, you can find out why, and then apply those practices across the other offices -Cost effective, easy to get info -May miss out on external opportunities for improvement

INDUSTRY LEADERS -Benchmark against industry leaders -Allows you to see how you’re performing compared to top performers -Top performers may not be willing to share information -Top performers have a lot of capital, you may not

TYPES OF BENCHMARKING: -Performance benchmarking -Best Practice Benchmarking -Strategic Benchmarking -Financial Benchmarking -Product Benchmarking

PERFORMANCE BENCHMARKING -Compare your performance with competitor’s performance -Can compare products or services -You want to see whose products & services are meeting the customers demands -If theirs are and yours aren't, find out why

BEST PRACTICES -Benchmark against industry-wide best practices -I work in the network security industry, so we benchmark against controls like ISO27001, PCI- DSS, etc. -Allows you to compare against a firm foundation on practices that have been vetted over time -Best practices are best practices for a reason

STRATEGIC BENCHMARKING -Look at the long-term decisions other organizations have made -For instance, Apple moving into the mobile space was a long-term decision -Why did Apple do that? If they’re did, should we? What do they know that we don’t?

FUNCTIONAL BENCHMARKING -Compare current business functions to functions in other businesses, they do not need to be the same as your organization -For instance, compare the performance and processes of your Sales department to another organization’s. -Compare IT and HR to another companies -IE. Sheridan comparing its registration process to UTMs

FINANCIAL BENCHMARKING -Compare the financial performance of your company to another company in the same industry (preferably a top performer) -Find differences in your financial performance and theirs -For instance If their costs are lower, find out why? Do they own parts of their supply chain? Exclusive contracts? Mob extortion?

PRODUCT BENCHMARKING -Compare your products to other leading competitors products -Find out what customers like about those products, and what they don’t like -Incorporate this feedback to improve your own product, or into new products -Reverse engineer existing products to find out how they work

7 STEP PROCESS FOR BENCHMARKING STEP 1 : PLANNING - Essential for any benchmarking project -Recognize the need for benchmarking (Hey… we suck…) -Create a benchmarking plan – select targets, the type of benchmarking you want to do, and who will be doing the benchmarking (people resources) -Decide what type of data you want to measure, and how it’ll be measured. Establish metrics.

STEP 2: DATA COLLECTION -This step involves the actual collection of data -Depending on the type of benchmarking, data can be collected from a number of sources: -Financial statements -Customer testimonies -Internal documents -Insider information -Best practices -The internet -Existing products

STEP 3: DATA ANALYSIS -The data collected must first be validated for accuracy and completeness. This is to ensure you are not benchmarking against inaccurate data, which could lead to bad results. -You will want to indicate your own strengths and weaknesses, and determine any gaps between your current capabilities and the capabilities of the organization your benchmarking against -Provide recommendations on how to close those gaps

STEP 4: REPORTING -Consolidate your analysis into a clear and concise report -Gaps, conclusions, and recommendations should be clearly illustrated -Make the business case for enacting your recommended improvements

STEP 5: IMPLEMENTING IMPROVEMENT ACTIONS -Once recommendations have been made and approved, they must then be implemented. -These recommendations should be a part of the organization’s larger strategic plan (continual business and performance improvement) -Benchmarking should be an on-going process, and not a one-shot deal

STEP 7: INSITUTIONALIZED LEARNING -Performance improvements must be fully embedded within the organization -They must be sustained over time, and should be a part of the organization’s larger vision -Culture of continual improvement and learning

CONCLUSION -Benchmarking is a good way for new businesses to streamline their processes without having to reinvent something that’s already been done -Can help to improve existing businesses -Can result in innovation and creativity -Can expose competitor’s weaknesses