by: Sarah Joson
Monday, May 23, 2011 |
In the world of outsourcing, the word benchmark basically means comparing data with those of the other players in the industry. This is done to regulate pricing schemes and methods, according to the market’s criteria. Benchmarks don’t only serve as points of reference, these are also used to study cost reduction practices, and in some cases, point out areas for improvement in operational structures.
TPI, an outsourcing consultancy firm, shared five ways on how an outsourcing company can maximize information from benchmarking practices, based on the article by Max Staines, President of Compass North America:
1. Plan. For example, results from benchmarking show that you are spending more than the usual on data storage. You learn that the factors that are causing the heightened expenditure are instigated by defunct and costly processes. It is highly suggested that rather than going for quick resolution, one should opt for a long-term solution that can fix the current situation, and then become an unceasing beneficial system.
2. Use it as leverage. Benchmarking can either make or break a company if not used properly. You can incorporate findings from benchmarking into your strategy and improve your company’s weak areas. Also, findings from benchmarking do not always mean you have to adjust your prices, it means improving your core processes so that you are able to satisfy clients and improve practices.
3. Establish universal standards. All companies involved in data gathering should decide which factors should be considered in benchmarking.
4. Avoid misunderstandings by being transparent. Once the results have been collected, there will be times when data will be perceived by other parties as weak and unreliable. All questions should be entertained and doubts should be addressed immediately. Practice being open with one another, not only in the benchmarking process but also the data collected. Show that you are willing to participate instead of opposing other members.
5. Schedule your benchmark analysis properly. The study should be conducted before sourcing changes are applied to the participating companies. Data gathering done way after the contract term may result to unwanted conflicts.