God, grant me the serenity to accept the things I cannot change, The courage to change the things I can, And the wisdom to know the difference. (Serenity Prayer, Reinhold Niebuhr)
Benchmarking & Competitive Intelligence
Benchmarking is comparing ones business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost. In the process of best practice benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compares the results and processes of those studied (the "targets") to one's own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful. (Wikipedia).
- Internal Benchmarking - Comparing a process in one function with that of another function or comparing the same function across locations.
- Competitive benchmarking - Comparing with direct competitors, either locally, nationally or worldwide. The organization may not be viewed as a direct competitor when comparing with other organizations outside the local market area.
- Functional benchmarking - Comparing processes to other organizations with similar processes in the same function, but outside the industry.
- Generic benchmarking - Finding organizations that have best in class processes and approaches from which one may learn and translate to improvements at one's own organization.
Steps in Benchmarking
- Review, refine and define existing processes to be benchmarked
- Determine what to benchmark
- Form a benchmarking team
- Identify benchmark partners
- Collect and analyze benchmarking information
- Evaluation organization's performance versus benchmark partner
- Determine how upgrading practices will impact the organizations
- Establish new strategic targets
- Implement improvements and a system to monitor progress
- Do it all over again
Competitive intelligence (CI) is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in strategic decision making for an organization (Wikipedia).
Competitor analysis can include an understanding of a competitor's:
- Current strategy
- Resources and Capabilities
- Strategic Moves and Outcomes