Risk management benchmarking
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Risk Management Benchmarking
Benchmarking is the comparison of processes within or outside an organization. The main aim is for learning and improvement of performance. Benchmarking is essential because an organization gets to learn from the best in terms of the provision of services to its clients.
Internal benchmarking is a comparison that is done within the organization (Castro & Frazzon, 2017). This is achieved by the exchange of ideas within departments of the organization, like the finance department benchmarking with the human resource department. Internal benchmarking mostly works as a stepping stone to organizations that have never had any benchmarking.
External benchmarking is the comparison and exchange of ideas among two or more organizations. This is done more officially as it involves the setting of dates, venues, and also having clear arrears one organization wants to learn from the other (Larkin et al., 2015). Clearways of data collection are also crucial in external benchmarking as the organization only focuses on what they want to learn from other organizations.
Risk managers can use both internal and external benchmarking to measure results in the organization. Internally, this can be done by choosing the best performing department to benchmark with the least performing department. Externally risk managers can look for firms with similar ventures and are having excellent performance and ask for an exchange of ideas with them.
In conclusion benchmarking is necessary for the growth of the organization. Internal benchmarking improves internal processes, which would reflect on performance increase. External benchmarking enhances competition.
References
Castro, V. F. D., & Frazzon, E. M. (2017). Benchmarking of best practices: an overview of the academic literature. Benchmarking: an international journal, 24(3), 750-774.
Larkin, S., Fox-Lent, C., Eisenberg, D. A., Trump, B. D., Wallace, S., Chadderton, C., & Linkov, I. (2015). Benchmarking agency and organizational practices in resilience decision making. Environment Systems and Decisions, 35(2), 185-195.