Within the broader categories of internal and external benchmarking, there are several sub-categories of benchmarking. Process benchmarking involves observing the best practices from one or more benchmark firms to better your processes and weigh outsourcing as an option. Performance benchmarking refers to the process of designing new products or altering current products. Businesses can use reverse engineering to take apart a competitor's product to better understand how it works and to identify areas for improvement. Financial benchmarking is used to compare your finances to that of competitors to access your overall productivity and competitiveness.
Benchmarking suppliers on a consistent basis will provide businesses with several advantages such as staying on top of market and industry trends, identifying best practices among incumbent and competitive suppliers, and finding gaps that may exist within SLAs or resource allocation. Improving strategic parts of the organization will allow it to become more efficient and can help ensure its success in the long term. Strategic advantage is more easily achieved when you increase organizational learning. This learning is accomplished through awareness of your business and everything that encompasses it. It's important to bring new ideas to your organization and promote creativity because this helps you surpass other companies in competitiveness.
Source One recently worked on a benchmark where we compared translation rates across various suppliers. These translation rates reflected per word pricing for translation services offered over the phone. The client did not perform much market research when they selected a translation provider, so they did not end up getting the cheapest price for the most quality services. Source One reviewed internal data and marketplace data to determine the pricing that several suppliers were offering. Source One also compared the quality of these services by speaking with other clients and analyzing competitors reviews and reputation. After comparing the suppliers and choosing the most suitable translation provider, Source One was able to recommend strategic initiatives to help our client achieve an overall savings of 14% annually on translation services.
Benchmarking can be used in any industry and should be part of your organization's internal practice. Competition will always be a prevalent and deciding factor in the success of your business because it is essential to keep current with market trends and competitors. Always remember to frequently benchmark to ensure that your strategy is based on reality and not historical data. With the tips listed above, you will be on your way to improving your organization and will be more aware of all facets of your organization.