What is Benchmarking and Why Should you Do it?

Benchmarking
What is Benchmarking and Why Should you Do it?
Benchmarking means studying another organization's performance in an aspect of your business in order to improve your own business.
It is a continuous process of comparing a company’s strategy, products and processes with those of the world leaders and best in class service organizations.
Benchmarking is one of manager’s best tools for determining whether the company is performing particulars functions and activities efficiently, whether its costs are in line with those of competitors.
Benchmarking is the process through which a company measures its products, services and practices against its toughest competitors or those companies recognized as leaders in its industry.
The idea behind benchmarking is to measure internal process against an external standard.
It is a way of learning which companies are best at performing certain activities and functions and then imitating or better still improving on their techniques.

Benchmarking Example
Ritz-Carlton – Benchmark in Jordanian Hospitality
Ritz-Carlton opened a new property in Amman, Jordan. It is set to become the new benchmark for hospitality in the entire country.
Ritz-Carlton Hotel & Residences Amman offers modern lifestyle living through the brand’s unique F&B dining venues, luxurious club lounge, meeting and event spaces, and the largest luxurious rooms in the city.
The hotel has 228 guestrooms, and 34 suites. The hotel also has a 1,050 sqm Grand Ballroom, a boardroom, and five meeting rooms.
The hotel also offers a full-service spa and wellness experience. It houses indoor and outdoor temperature-controlled pools, six treatment rooms, and the largest jacuzzi in Amman.
Emirates Airlines – Benchmark in Post Covid Travel
In 2020, Emirates was rated as the safest airline in the world in its response to the COVID-19 Pandemic norms according to the Safe Travel Barometer.
The airline set an industry-leading safety benchmark since the resumption of its operations, and topped the ranks with a ‘Safe Travel Score’ of 4.4 out of 5.0 among 230+ airlines judged worldwide
The score is based on an independent audit of 26 health and safety parameters evaluating traveler convenience, safety protocols announced by airlines.
Safe Travel Barometer monitors and benchmarks initiatives in the travel, tourism and hospitality industry for the post-COVID world.

Benchmarking Basics for any Service Organization
Q1 – When
Benchmarking can be used at any time, but is usually performed in response to needs that arise within a company.
Q2 – Why
This is the most important question in management’s decision to begin the benchmarking process.
Q3 – Who
Companies may decide to benchmark internally, against competitors, against industry performance, or against the best of the best.
Q4 – What
Benchmarking can focus on roles, processes, or strategic issues. It can be used to establish the function or mission of an organization.
Q5 – How
Benchmarking uses different sources of information including published material, trade meetings, consultants, customers and marketing representatives.

Benchmarking can be applied at Three Levels
Internal Benchmarking
Can be carried out in the larger organization by way of comparisons between operating units.

Competitive benchmarking
This is probably the most frequently quoted use where comparisons are made with directly competitive organizations.
Functional or Generic Benchmarking
This approach compares specific functions such as distribution and after sales service. The advantages here are that information is sometimes easier to obtain then when comparisons are being made with competitors.

Benefits of Benchmarking
The best practices from any industry may be creatively incorporated into a company’s operations.
Benchmarking is motivating. It provides targets that have been achieved by others.
Resistance to change may be lessened if ideas for improvement come from other industries.

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Time Stamps

0:00 What is Benchmarking?
0:37 What is Benchmarking and Why Should you Do it?
1:34 Benchmarking Example
2:57 Benchmarking Basics for any Service Organization
3:48 Benchmarking can be applied at Three Levels
4:33 Benefits of Benchmarking