Benchmarking
Contemporary Management Technique: Benchmarking
Introduction
Benchmarking process is important because it allows the company to identify the best firms in the market, analyses their excellent activities and management styles which can be incorporated to achieve a competitive advantage (Allard & Holsapplc, 2002). For example, Apple can compare its operation with other firms like Samsung and Nokia which produces similar products. Also, benchmarking is done between companies with the same industry or producing almost common products. The process focuses on the business operations of the selected companies to identify the possible strengths, cost, and techniques. The goal is to identify the best practices that can be implemented in the operations of the company like Apple to improve production and customer service. The management realizes how the target firm operates to remain successful.
Rationale
The purpose of Benchmarking is to measure the products, processes, management styles and services against the dominant competitors. In Benchmarking, Apple should identify the well-recognized market leader company in the industry. In this case, the manager of Apple can use benchmarking in determining the performance of the firm on certain functions. After the comparison, the management also realizes areas that require improvement to perform effectively in the market. Another reason for benchmarking is to evaluate whether the cost of operations is in the lire with that of competitors (Allard & Holsapplc, 2002). The management also compares internal and external activities to determine the weaknesses and strengths of the firm. Some of the internal factors include the accounting process, innovation and time management. The leadership benchmark with other firms to understand the strategy they apply to manage time appropriately. The internal operation of the company is measured about the external standards to identify the best-performing activities and functions of the competitors. Organization undertakes benchmarking practices to measure the quality of methods by the other stakeholders in the industry, their efficiency and also the cost-saving practices within the organization. Benchmarking allows a company an opportunity to identify a performance gap; this achieved through comparison from the best practices undertaken in the industry. The deviation analysis provides a foundation from which performance criteria can be used in future performance measurement. Apple strives to be the best IT solution company globally, to achieve this the company must identify the areas of underperformance and adjust accordingly to meet its operational objectives (Blocher, Chen, & Lin, 2002). Benchmarking identifies the best operational practices which can be adopted not only in the industry but also in other related industries. When a company efficiency and cost-effectiveness adopt, these practices can be achieved. Benchmarking shows the applicability of different business process practices. Through benchmarking, therefore, it’s not a state of try and error to identify the practice that fits or doesn’t fit, but instead, it’s comparing what other organizations are doing with what the other organization is not doing. Information acquired from the benchmarking practice, therefore, has been tested and proofed viable (Blocher et al., 2002). Benchmarking, therefore, is the best approach to business research since the information acquired doesn’t need further analysis. Benchmarking provides details on how to catch up with the industry best performance. The practice directs an organization on the methods to do away with which do not bear the expected performance fruits. Benchmarking practices enables an organization to identify the initiatives other organizations are taking to withstand the operation environment dynamism. Through this, an organization can understand approaches through which it can turn its threats into opportunities. Market leadership requires efficiency in business processes undertaken by an organization. Organizations performance is boosted through understanding instances of performance failure (Blocher et al., 2002). Benchmarking provides the information and therefore setting the guidelines to be followed to achieve the intended performance. The best industry performance in today’s business environment is not only those concerned with cost-effectiveness or efficiency in production. The best practices are therefore based on industrial operational policies which currently are mainly concerned with sustainable development practices. An organization may be having the best financial performance but fail in achieving its strategic objectives. Benchmarking provides necessary information to identify performance instances which require adjustment to fit on the organizational strategic goals.
Benchmarking process.
Benchmarking is a lengthy process well-articulated to achieve some set strategic, operational goals. Benchmarking on its own is a strategic approach to identifying causes and possible solution to performance deviation. Through benchmarking, performance hindrances are identified, and reasonable adjustments need to be implemented to acquire the expected performance. The process of benchmarking involves five main sub-process, these include; benchmarking planning, a collection of information, analysis, implementation, and monitoring.
The planning process is done to identify the business practices that require benchmarking. Benchmarking process has some financial implications for the organization undertaking the exercise. The activities to be benchmarked on therefore must be able to give an organization a competitive edge and boost its financial positioning. Before benchmarking, therefore, Apple has to undertake a cost-benefit analysis to know whether the activity is economically viable or not. The planning phase also entails identifying the best entity to benchmark against. Apple ought to choose a company which has achieved efficiency and effectiveness in its operations for benchmarking purposes. The company identified as a benchmark target must operate within the same environment as Apple, operational environment affects the performance of the business operating within the environment. Using an organization under different operating environment, therefore, may be ineffective to the entire process. The phase also entails identification and creation of a team which will be tasked with the benchmarking process. Team composition determines whether the goals set for the team will be met or not. Under this Apple must ensure that the benchmarking team is composed of members with the same perception and attitude towards the entire process if the process is to succeed. The team leader must also be equipped to be able to lead the team effectively, towards the achievement of the benchmarking goals. Another important consideration of the planning phase is the benchmarking methodology to be adopted for the process. The methodology aspect is concerned with providing the guidelines on what the entire process will address. The method may help in determining the problematic areas in operations (Henderson et al., 2006).
Collecting Information
To achieve benchmarking objectives, the data collection methodology has to be effective. Redesigning of data collection tools will ensure that the information collected using these instruments is valuable to the company undertaking the benchmarking. Apple can acquire the intended data from either the secondary sources or the primary sources (Blocher et al., 2002). The type of data source identified for the study, therefore, affects the kind of information collection tools to be used. The questionnaires to be used in the data collection must be designed in such a manner that the information collected is relevant to the research process (Henderson, Winning, Gerzina, King and Hyde 2006). The data collection instrument must be designed to give information based on solving the problem identified during the planning phase. Use of process script should be incorporated especially when collecting information via the telephone. The scripts will guide the team members to ask only the intended question and avoid disruptions. Data collection should be documented procedurally to ensure that the team is well guided in the data collection process. The team involved in data collection on behave of Apple ought to undergo thorough training to be fully equipped for the practice. When the data collection process is a success, then the entire process will be successful. However, when wrong or inadequate data is collected the process is bound to fail on its set objectives.
Technique analysis
After data is collected successfully then proper analysis has to be done to ascertain meaning to the collected data. Appropriate analysis techniques should be applied to be able to identify the relationship between different variables under consideration. Under this, the company statisticians should work tirelessly to ascertain to every set of data. The main objective of benchmarking is identifying relationship between different practices and the performance levels of the company. Any set of data, therefore, must be well analyzed to identify instances when this relationship is displayed (Allard and Holsapplc, 2002.). The results must then be presented for management to facilitate decision making. The results should be used in the identification of outstanding performance practices on the part of the firm under consideration. Proper results presentations methods should be used to ensure that the information about the practice is well understood. Graphical presentation format should be used since they are easy to interpret. Identification of causes for performance gaps ought to be undertaken to give a relevant interpretation to the decision-making team of the organization. From data analyses, the organization process enablers should be isolated and the performance gaps identified. Data analysis should also provide information on Apple hindrances to achieving the intended performance change.
Applicability by other organization
For a benchmark process to be effective by other organizations, all these processes must be followed keenly to avoid making any errors in either of the processes. Errors which may arise in either of these stages has large financial implications to the organization. The implementation phase is the most important phase this is because it calls for drastic changes to be undertaken within the organization. Benchmarking practices enables an organization to identify the initiatives other organizations are taking to withstand the operation environment dynamism. Through this, an organization can understand approaches through which it can turn its threats into opportunities. Market leadership requires efficiency in business processes undertaken by an organization. Organizations embrace the use of the benchmark approach to acquire a competitive edge and also to operate within the laid down operational procedures within the industry upon which the organization operates. Benchmarking provides necessary information to identify performance instances which require adjustment to fit on the organization strategic objectives. Benchmarking is undertaken by organizations uncomfortable with their current performance and who are striving to achieve more through effective practices (Andersen 2010). These organizations are tasked with changing the operating premises to fit the requirement of the proposal from the benchmarking. The successful implementation has ended up giving the organizations a competitive edge offers their competitors. Achievement of organizational non-financial objectives has also been facilitated when effective benchmarking is undertaken. These objectives include; an organization corporate social responsibility- and organization doesn’t exist only to make profits, but also to fulfill its social obligation to the host community. As noted earlier in the paper benchmarking is not just based on acquiring a competitive advantage.
Applicability to Apple
An organization, therefore, can undertake the practices to effectively be able to implement its social responsibility goals. Another objective of an organization which may be effected through benchmarking is an organization’s objective of following the industry standard operational procedures. An organization seeking to standout above the other organizations in a given sector may perform benchmarking. Through understanding other best players in the industry practices, the organization will be able to change its practices and align it with operational guidelines of the industry. However, there are many forms of benchmarking that Apple can undertake to strategize and achieve the set objectives. The different forms of benchmarking Apple can adopt include; competitive benchmarking- this form of benchmarking is intended to give the organization a competitive edge of the other IT companies such as Nokia, Techno among other. Through this benchmarking Apple will seek to promote the quality of its products, reduce the cost of operations and promote the efficiency in production. These achievements will give the company a competitive advantage over its close competitors. Another benchmarking approach which can be used by the organization is functional benchmarking (Anand and Kodali 2008). Under this approach, the organization seeks to understand the causes and implications of the deviation from the intended performance standards. On implementing finding from this benchmarking practice, the organization will enjoy from useful functionality. Apple can also undertake international benchmarking approach since the organization seeks to achieve global audience effectively undertaking an international benchmarking will help achieve this strategic goal. Through this, the organization will compare its performance on a global scale with other successful organizations. Understanding the needs and expectations of the global market will enable the organization to strategize on to how well it can serve its market. Another approach through which Apple can use benchmarking is through process benchmarking. Analysis based on the process of the different organization will enable Apple to identify bottlenecks and hindrances which are based on the organization processes. Through this Apple might undertake process redesigning to strategically fit and give the intended performance standards (Anand and Kodali 2008).
Implementation phase
The implementation stage of benchmarking concerned with making the intended change to achieve the intended goals. The implementation stage is intended to narrowing down or eliminating the performance gap. The phase is intended to matching the ideal state with the actual performance state. Effective implementation of the benchmarking process calls for change within the organization. Formulation of a formally recognized action plan based on organizational policy should be undertaken. Operational change also leads to changes on the premises on which the past practices were undertaken. Apple ought to be willing to make changes which support the implementation of the system changes. Organizational culture should be changed to support the new changes in the process. To change or alter an organizations culture can be easily achieved through the changing of the organization’s leadership. Through this approach resistance to change will be avoided leading to successful implementation of the findings. The organization should work to ensure that all the organization’s human resource efforts are directed towards imparting the intended change. A change in leadership style to incorporate all the ideas towards a successful implementation of the changes will also aid the operationalization of the concepts. The organization must also allocate the necessary resources which facilitate them implementation phase. The right person must be used to acquire the intended results. The resources ought to be distributed based on the requirement basis as shown by the result analysis (Attiany, 2014). The top management team of Apple must support the implementation initiatives proposed from the benchmarking practice undertaken. Changing the operational premise to fit the implementation is also very essential. The organization policy, for instance, ought to be changed to support the proposed changes. The organization carrying capacity regarding capabilities has to be adjusted to fit in the proposed changes to acquire effectiveness in implementation.
Monitoring phase
The final phase of benchmarking is monitoring and control. The process is undertaken to identify whether the intended changes have been effective all not. Performance measurement program has to be put in place to evaluate the entire progress of the just implemented plans. The phase is used to ensure that an organization leaps maximum benefit from the undertaken process. Monitoring and evaluation have to be undertaken on a regular basis to measure any deviation from the intended results. If the implementation doesn’t produce the intended results process redesigning may be conducted to ensure that the procedures are aligned with the intended results. The failure of the benchmarking to provide the intended result may have various implications for the organization. When an analysis has been undertaken from a different sector, the applicability of the process may become impossible. The implementation of the wrong program may cost the organization even more. The monitoring phase should be used to confirm whether to continue with the implementation or shift back to the original practices. Effective monitoring ensures that the allocated resources are used well and in a timely manner to deliver the intended operational goals.
Conclusion
Benchmarking if effectively undertaken can add value to the organization’s processes, work structure, and also the workflow. The practice achieves this through identification of work areas that require improvement and simple rectifying to achieve the intended organizational goals. Benchmarking identifies when a change is necessary and clearly shows the implications accrued if the results of the practice are implemented. Benchmarking, therefore, is the appropriate approach to curbing the threats arising in the course of doing business. Benchmarking allows a company an opportunity to identify a performance gap; this achieved through comparison from the best practices undertaken in the industry. Benchmarking creates an avenue through which the business can continuously adjust and make an improvement to their processes, operational premises, their financial management, and also their functionality. For organizations to remain competitively relevant, they must make use of this approach to understand the operational environment better. Benchmarking offers organizations opportunity to compete at fairgrounds by understanding the strengths and weaknesses of each other in the same industry. Organizations growth and development is based on continuous improvement in performance on the part of the organization. Improved performances lead to increased customer satisfaction and thus promoting customer loyalty. Benchmarking, therefore, can be seen as the answer to effective operations.
References
Allard, S. and C. Holsapplc. (2002.) “Knowledge Management as a Key for e-Business Competitiveness: From the Knowledge Chain to KM Audit.” Journal of Computer Information, Systems, 42:5.
Anand, G., and Kodali, R. (2008). Benchmarking the benchmarking models. Benchmarking, An international Journal. 15(3), pp.257-291.
Andersen, (2010) Industrial benchmarking for competitive advantage, Human Systems Management journal, Vol. 18, Issue 3(4)
Attiany M. (2014). Competitive advantage through benchmarking: field study of indusrial companies listed in amman stock exchange. Journal of business study quarterly. 5(4) p.41-51
Blocher, E., Chen, K. H., & Lin, W. T. (2002). Cost management: A strategic emphasis.
Henderson-Smart, C., Winning, T., Gerzina, T., King, S., & Hyde, S. (2006). Benchmarking Learning and Teaching: Developing a Method. Quality Assurance in Education, 14(2), 14355.