What Is Benchmarking?

Benchmarking is a comparative analysis of the performance of one’s own company or organization and the average indicators in the industry taking into account a number of criteria. It came about as a result of global competition and is a popular managerial tool used to improve the quality and efficiency of managing business.

The benefit from benchmarking by bringing your performance level closer to that of the bests in the industry and by developing a strategy for making managerial decisions based on data. This upgrades your business to a new level of competitiveness.

Examples of analytical reports from the solution developed by Smart Analytics are given below. The solution allows benchmarking general indicators of the Belgian hospitals’ activities against those of other healthcare market players in Belgium.

Here is a report on the analysis of patients’ stay in the given hospital (dark-blue column) compared to other Belgian hospitals. The average indicator is shown in red. The report demonstrates the duration of hospital treatment for each pathology group and allows pinpointing the least profitable medical pathology groups for the hospital.

Benchmarking is used for analysing care profiles. It demonstrates the frequency of the procedures in departments of the same type. The higher the frequency, the more costs are needed for this or that type of care.

This report demonstrated the ratio of actual duration (dark-blue column) and expected duration (red column) of patients’ stay in hospital as per type of beds. It makes it possible to see the deviation from the expected treatment duration depending on the type of beds. The exceeded duration implies higher costs whereas duration below the expected rate implies repeated admissions later.

Benchmarking vs Competitive Analysis

Benchmarking often resembles the competitive analysis. However, the two are quite different. Competitor analysis is comparatively more widespread than benchmarking, although it is up to you to decide which tool is more relevant to your business based on your time and resources. The two approaches are compared in the table below:

Benchmarking	Competitive Analysis
Aimed at comparing self with other industry players (answers the question ‘Where are we compared with our rivals?’)	Aimed at measuring efficiency indicators (answers the question ‘What are our rivals doing?)
Strives for continuous improvement	Strives for prompt focused improvement
Co-operation for exchanging information	Considered by some as industrial espionage
A competitive advantage needs to be maintained	It is a good idea to implement this competitive advantage
Implementing best practices after analysis	Attempting to copy somebody’s experience/process

Stages of Benchmarking

The basic benchmarking stages include:

Choosing indicators for benchmarking
Collecting information about similar companies for further comparison
Collecting information about their inner performance indicators
Thoroughly analysing the collected information to define points for improvement in own company
Сoming to conclusions based on the research in analytical reports
Using the new information for ideas about implementing changes in own company

Thanks to solutions from Smart Analytics, a company is able to automate most of the stages mentioned: from the collection, validation and harmonization of data from different sources and building calculation models, as well as calculating analytical indicators to generating over 200 types of analytical reports.

Benchmarking is not only a benign methodology for maximizing organizational performance but also a determinant of working reality for managers and/or planners.

Carlos A. S. Passos & Rosana B. B. Haddad

Centro de Tecnologia da Informação Renato Archer

For continuous improvement of its performance a business must be aware of its strong and weak points. This is what benchmarking is for – it is an analysis aimed at devising ways that would help to remain on a par with competitors and implement changes easily.

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Benchmarking as a Tool for Improving Efficiency

What Is Benchmarking?

Benchmarking vs Competitive Analysis

Stages of Benchmarking

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