Benchmarking is widely regarded as the skill that should be communicated and utilised in day to day business operations. Benchmarking has spread throughout the corporate environment and is used as a management tool to enhance global competitiveness.
What is Benchmarking?
A systematic and continuous process of searching, learning, adapting and implementing the best practices from within your organisation or from other organisations towards attaining superior performance.
Benchmarking provides a methodology for learning best practices. Benchmarking is a methodical process involving careful research and an understanding of our own processes, products and services. This methodical process helps us to gain management support for improvement, identify those who perform well, determine what needs to be improved, and incorporate what we have learned to change our performances for the better.
Benchmarking is not merely copying the most successful methods or practices. The end result of benchmarking is change, learning how to change, implementing and managing change for continuous improvement. Benchmarking helps to promote an innovation and knowledge – driven culture in business.
In simple terms, benchmarking is analytical tool used to measure and compare business operations, functions or processes against best-in-class performers. Benchmarking in itself does not result in improvement. Instead, it identifies shortcomings, or inefficiencies, in the product, process, systems, or organisations. The real challenge and opportunity, therefore, is to leverage the knowledge gained from benchmarking processes into competitive advantage for the organisation.
What is a Benchmark?
A measured, “best-in-class” achievement; a reference or measurement standard for comparison; this performance level is recognised as the standard of excellence for a specific business process.
What is Best Practices?
Superior performance within a function independent of industry, leadership, management, or operational methods or approaches that lead to exceptional performance; best practice is a relative term and usually indicates innovative or interesting business practices which have been identified as contributing to improve performance at leading companies.
What is Malaysia Benchmarking Index (MBI)?
A powerful online benchmarking tool designed to help companies to improve their performances. MBI allows companies to compare their performances using financial and management key performance ratios.
Three steps in implementing MBI:
- The MBI Benchmarking Report which includes all the MBI key performance ratios enables company to compare performance with a chosen sample of companies
- After analysed performance with a comprehensive and objective way, company will be able to identify not only those areas relatively strong or weak, but company can also make connections between "cause" and "effect"
- MBI can help companies to move forward through Community of Innovation and Business Process Improvement breakthroughs
MPC Benchmarking Model
The model provides an adequate framework for successful planning and execution for any benchmarking exercise and serves as an analytical tool to measure and identify gaps and inefficiencies in business operations that can be applied to all industries.