Strategic benchmarking, the method used to analyze how other companies are performing in terms of management capabilities, initiative’s for competitive development, and long-term processes that have been proven successful.
A benchmark is a point of reference by which something can be measured. By definition, “benchmark” is a permanent mark established at a known elevation. And it is used as the basis for measuring with the purpose of achieving excellence.
“We used benchmarking to analyze how other companies are performing”.
Compare your process performance and find opportunities
Benchmarking is used to compare the performance of processes with the best performances of other companies inside and outside the industry. Basically, it is the search for industry best practices that lead to superior performance.
For example, benchmarks could be used to compare processes in one retail store with the processes of another store within the same chain.
Why is Benchmarking so Important?
If you want to gain an independent perspective on how well you perform compared to other companies, benchmarking is a great tool!
Let’s sum-up the five main benefits of using benchmarking in your daily routine:
- Identify areas for improvement to gain better results and reduce cost.
- Develop a standardized set of processes and metrics.
- Create a culture centered around continuous improvement to remain relevant.
- Unify your direction and goals to maintain focus within your organization.
- Overcome complacency through high performance goals and organization
So yes, benchmarking is an excellent way to guide and optimize the claims process. However, it is usually easier to define than to implement.
A Benchmarking Process in itself does not ensure a path toward quality improvement.
It is essential to know how to optimize and transform the results into a clear and easily achievable strategy.
Let’s start on your path to excellence!
A Benchmarking Process in itself does not ensure a path toward quality improvement.
First Steps Towards an Excellent Benchmarking Strategy
We have a clear goal to achieve: compare your company with industry bests and find out what you can do to make improvements.
In this comparison process, you need to choose the right Benchmarking Strategy to increase your methodic work.
First, you must know that they are two primary types of benchmarking:
- Internal benchmarking: the comparison of practices and performance between teams, individuals or groups within an organization.
- External benchmarking: the comparison of organizational performance against industry peers or across industries.
Within your company, you can use both methods to improve internal claims processes and monitor what your competitors are doing.
We recommend applying both processes for better results. However, both internal and external benchmarking have three types of methods to improve performance, reduce cost and retain customers:
You can choose the method that works best for you or combine all three of them!
The ABC’s of Process Benchmarking
Let´s start form the first type of method. We developed three golden steps for you to optimized this Benchmarking Process:
1. Determine your competition and the information you want to find. It may be hard to collect all the data you want if you benchmark a single competitor. Instead, select several different organizations to study and get the data you need.
Gathering information from several sources can give you more detailed information on the specific organization you select to study.
2. Select a subject to benchmark. Executives and other senior managers should be involved in deciding which processes are critical to the company’s success.
The processes should then be prioritized based on which metrics are most important to all stakeholders. After prioritizing, select and define the metrics you want to collect from others.
3. Document your current processes. Map out your current processes to identify areas that need improvement and easily compare them against your competitors. Analyze and measure your performance against the data you’ve collected.
Now, you have the first steps towards your search for excellence!
Performance Benchmarking, Your Biggest Ally
The second method, Performance Benchmarking, involves collecting information on how well you’re doing in terms of outcomes and comparing these outcomes internally or externally.
You can use it in a variety of ways, from revenue growth to customer satisfaction. When you collect this information, you will need to create a plan to implement the changes needed to close performance gaps.
Your plan must include clearly defined goals and should be written with the company’s culture in mind to help minimize any pushback you may get from employees.
When you have a plan, it’s time to implement the necessary changes. Closely monitor the changes and employee performance. Implementation requires total buy-in from the top down!
Finally, we suggest documenting all processes and ensuring all employees have access to the information and instructions necessary to reach the same goal.
Benchmarking IS a strategy in itself.
Strategic Benchmarking, Crossing the Finish Line
Finally, we have the third method: Strategic Benchmarking. With this tool you can take a long-term look at the direction your company is going in. Also find out what long-term goals other companies have set.
Here, you have four phases that are involved in normal benchmarking process:
As can you’ve probably figured out by this point, Benchmarking IS a strategy in itself and understanding strategic benchmarking is important for your business.
Knowing where to get started can be difficult, but The Houston Chronical outlined five steps to getting started:
1. Identify your objectives.
2. Identify a company that excels in these objectives.
3. Study that company.
4. Analyze the information you obtained from your studies.
5. Apply your findings to your own company.
This sounds pretty straightforward, right? Well, it is if you have the right tools.
To better explain, let’s discuss the top three questions we get asked about benchmarking.
Who should I Benchmark against?
What you are probably wondering…
The best companies to benchmark against are those that are close to the same size as your company and bring in a comparable amount of revenue.
Comparing against companies similar to your own will give you insight on where you can improve and ideas on how to outperform these companies.
But what if you are trying to grow your company? It is ok to benchmark against competitors that are bigger than you. Keep in mind, their numbers will be larger, but don’t let this discourage you.
Benchmarking against companies in your industry that are larger than you will give your ideas for growth and areas of improvement.
What do I do with my information?
After you figure out who you will benchmark against and gather the proper information, you need to have a plan in place for what you are going to do with that information.
A good first step is to measure your performance against the company you are comparing to. This will give you a good idea of where your strengths and weaknesses are and how you can improve.
Once you have decided on areas of improvement, you and your team will need to come up with a plan to implement these changes. Make sure the goals in your plan are clearly defined and align with your company culture.
Then, after you begin implementing your new plans, you need to monitor each one and take note of any changes.
If changes are moving in the wrong direction or at the wrong pace, it may be time to go back to the drawing board. If a plan is going as expected, or better than expected, still keep a close eye on it to make sure this trend continues.
When you have all of your plans in place and are happy with where they are going, make sure you keep a close eye on them. But also go back and start the process over again with new plans.
How are you going to obtain information about a company that you are studying?
This is the most popular question. Some information might be found pretty easily online, but what about the really important stuff that isn’t online?
Aha! That’s where TerraClaim comes in. Our software has an extensive data warehouse with thousands of companies represented.
And because we love Benchmarking Strategy so much, we want to help you in the process.
That’s why we created a Free Webinar for you to learn even more secrets! For those who stay with us until the end of this meeting, you’ll get a Free Demo to find and experience by yourself all the information you need to successfully benchmark.
You may be asking yourself, “why should I go to this webinar after reading a long article all about strategic benchmarking? I know what I’m doing!”
That depends, do you want to use benchmarking to actually make improvements to your company and not just obtain information about other companies?
If your answer is yes, you will benefit from this webinar. On top of that, benchmarking is constantly evolving so it’s important to stay up-to-date even if you have a process in place that you are happy with.
We are going to teach you how TerraClaim will help you obtain the benchmarking information you need to become more competitive, and also how the software will help you utilize this information.
The webinar will be on October 8th, 2020, at 1 PM and spots are filling up fast!
Sign up here, go to our website or social pages to secure your spot.