The term benchmarking originates from surveying terminology where it was used to denote a mark representing a given altitude and against which other heights could be calibrated or “benchmarked.” In the most general terms, it has come to mean any standard against which something is compared. In business terms, benchmarking is comparing your business to others to understand your current position and learn from it.

Benchmarking can show you where your weaknesses are, which areas you can improve, new or different ways to do things, strategies for improvement, what is possible, where your strengths are and how to maintain them, and where you can increase efficiency. The underlying reason for benchmarking is to learn how to improve your business process and thereby increase your competitiveness.

Some of the major types of benchmarking are as follows: Metric benchmarking is the use of quantitative measures as reference points for comparisons. Best-practice benchmarking focuses on identifying outstanding techniques. Information technology benchmarking includes data processing, systems analysis, programming, end-user support, and networks. Infrastructure benchmarking includes data centers, networks, data/information, end-user support, and distribution remote centers. Application benchmarking includes system analysis, development and maintenance programming, and functionality. Strategy benchmarking includes skills assessment, information technology strategy, business-technology alignment, and delineation of roles and responsibilities.

A business can choose to benchmark their entire business or just some key aspects of it. The first step is to identify different aspects of your business and choose which are the most important to your business success. Some aspects of business that are traditionally benchmarked include: customer service, profitability, manufacturing processes, accounting procedures, overheads, turnover, number of customers, marketing, sales methods, and product range as examples.

While it is beneficial to use consistent metrics for annual comparisons and analysis, the development of new, creative metrics is equally as important to monitoring the health of your business. Here are a few creative metrics:

• Customer suggestions tracking the number of customer suggestions during a given time period can indicate the level of customer engagement with your brand. A high volume of constructive suggestions could initiate a major social networking initiative.

• Employee suggestions are a clear indication that your engagement strategy is working. When employees don’t offer suggestions, it’s because they aren’t personally invested in the business.

• Site traffic. Google Analytics makes it easy to monitor site traffic. But when you use the data to create a metric that compares your site traffic to the competition’s site traffic, you get an accurate gauge of the value of your current web strategy.

When used appropriately, benchmarking has proved to be a very effective tool for bringing about improvements in performance. Benchmarking allows you to discover the gaps in your performance when compared with someone else. It helps you see things differently, or as others outside of your business may see them. It is a proactive step in assessing what the competition is doing.

Once a gap has been identified the key question is: “How much of the gap do you wish to close?” Do you wish to improve a little or a lot? What is the benefit from each stage of change and what will it cost? Some areas will need greater effort to change than others but all must be compared to probable benefit/return for that effort.

Benchmarking uses different sources of information, including published material, statistical reports, trade meetings, and conversations with industry experts, consultants, customers, and marketing representatives to gather metrics.

BizMiner™ is an excellent competitive intelligence resource available to BizCenter clients. The Oregon Small Business Development Center Network recently purchased a statewide license to this expansive benchmarking database. Your BizCenter business advisor has access to market research, industry financial reports, balance sheets, risk index and other pertinent competitive benchmarking data that you need to plan and grow your business.

Without metrics, it’s impossible to evaluate your business’s progress and performance. Businesses that succeed and make money constantly assess themselves and improve in all dimensions of their business. Metrics are the cornerstone of their assessment and the foundation for any business improvement. Call Debbie Jo (541) 881-5762 at the TVCC BizCenter to schedule your business benchmarking advisory meeting. The team at the BizCenter can help you identify negative gaps in your businesses performance and in taking effective action to close that gap.

Andrea Testi is the Treasure Valley Community College Small Business Development Center director. She can be contacted at

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