6 Strategic Goals Needed for Business Benchmarking

What is always floating in the minds of the top leaders and the consultants? Of course the performance of their business! Of course, everything they are doing is for the sake of performance and growth. It is true that the financial analysis of a company can be insightful for the top management; still it can be baseless at some points.  Therefore, an external benchmarking is always recommended along with internal analysis. 

However, to get most out of it, business benchmarking should be conducted in the right way. Many leaders fail to determine where they should start. This blog will shed light on six top strategic measures with which benchmarking can be started:

The revenue growth of a company reflects the overall condition of a company’s customer value proposition. The goal of the strategy is to enhance the value for the customers than their peers. Once this goal is achieved, the company will be able to outpace the industry.  It may seem apparently seem simple, but it is not. It can be disturbed by a nuance that, in most of the cases, is overlooked. Benchmarking the revenue growth of a company is often overlooked. It can mislead the business as the growth or loss of the total number of companies has an impact on revenue growth. At the time of benchmarking the revenue growth of a company, it is important to ensure that the business is benchmarking its revenue growth against that of relevant firms and organisations. 

When a business is growing faster than other businesses in the same industry, then it is clear that the strategic plan of the business is on the right track. Here emerges a question- whether the business grows in a financially superior way than the competition or not. Answer to this question will make it easy to understand the profitability of the company to its competitors.  This strategic goal is quite easy to achieve. 

If you are accountable for running top management of a business, you need to understand the process well to benchmark your business.  In order to assure success, you need to choose peers having better and fewer profitability rates than you. It will help you explore your weak and strong areas. After benchmarking, you will be able to understand which areas of your business need further improvement and which areas are doing well and need to maintain the state.

You should understand how a company’s product line penetration and growth stack up against the competition. Product line penetration benchmarking emphasise product organisation or service lines in segments. If you garner industry benchmarks earlier, it will help you complete the process without any hassle. 

Productivity depends on the number and skill of the employees. Therefore, it is also important to evaluate productivity revenue per employee. If you find it satisfying, that’s fine. Otherwise, you need to determine how many people you will further need and which skills you will need. 

Once you have ensured that you have enough human resources, it’s time for you to evaluate whether the right people have assigned to right roles and designations or not. The first business benchmarking assessment should begin with a span of control. This is the ratio of employees to each individual contributor. 

It is imperative to consider the operating expense breakdown. For this, you will need to dig into the cost structure of a company. It reveals insights and opportunities. The benchmarking analysis is simply straightforward.  It takes most of the time, provides the outline of a company’s general ledger categories to the benchmarking categories. 

These are the six top strategic goals that a business needs to consider for ensuring the success of a business benchmarking.  By meeting these strategic goals, a business will be able to achieve success without any ordeal. 

Dylan Munro is working as a head business analyst with a leading business benchmarking firm. He has been guiding a number of businesses on benchmarking. If you need ideas to benchmark your business, you can look at his official blogs most of which are featured on internal and external benchmarking. 

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