Benchmarking is an important process that organisations must go through in order to understand their current market position and realise what needs to be done to not only match but beat out competitors. Here’s how you can get the most out of your benchmarking initiative.
Personally, I am petrified of going to the dentist. But I go twice a year because I fear fixing the problem more than preventing it. And although there might be a few people who don’t mind it, most everyone hates it. The awkward paper napkin-like bibs, the uncomfortable closeness between your face and the dentist’s. Not to mention the pure impossible nature of trying to answer the dentist’s small-talk questions while you have the equivalence of 5 pounds of electronic dental tools whirring in your mouth.
But, we do it. We go to the dentist to check-in with our dental health, see how we look compared to the last time we visited, receive instructions on how to better care for our teeth in the future. And though it might take some time out of our day and it may be a little uncomfortable during the teeth cleaning, when we leave, we feel pretty good about our smile.
In the same chord, benchmarking is a necessary part of understanding where your organisation currently is, what you’re doing right and wrong, and what sort of steps can be made to grow in the direction you want. Think of benchmarking as a regular check-up on your business performance - polishing your data and preventing any holes in your reporting. And unlike the dentist, we can promise it will be painless.
Here are 4 ways to benchmark your business and realise your potential growth.
We’ve talked a lot about data in the past. And why? Because it offers your organisation so much in terms of advanced analytics, machine learning, and artificial intelligence.
Not only do these tools help with improving process times and eliminating bottlenecks, they also can inform your benchmarking initiatives. At Basware, we preach the importance of data because at every step in your purchase-to-pay process, data is gathered. Automated solutions give us the ability to tap into our historical data, which, once it’s gathered, can be used to measure your organisation’s performance. With data at the core of almost every technology, benchmarking has become a routine part of how we manage success against our goals. And since Basware has the world’s largest open business network, we have the unique capability to access data from across millions of transactions on our network. Meaning customers have even more data to use in their benchmarking initiative.
When you use a modern cloud platform like Basware’s, the data you have is comparable with the data that others have and that being the case enables you to measure your own performance but also compares how you are doing against others. This makes the whole benchmarking process much more agile as you are not dependent on large analysis projects, but you can, in real time and without any extra effort, see how your KPIs are developing comparing to peer companies.
When you’re benchmarking, it’s important to make sure you have all the right people involved with the process. Benchmarking, though driven by data, can be very personal. What you look for depends on what your company needs, and your stakeholders will have the most honest opinion in that area. Afterall, a successful benchmarking project seeks to improve all areas of an organisation, each with separate stakeholders at the helm.
Employees believe that employers have their best interest in mind. Because of this, they’ll be most interested in ways a benchmarking project could help their overall working experience. The end result will contain happier employees who will gladly serve as brand advocates for your organisation.
Suppliers want the buyer-supplier relationship to be as pain-free as possible. They want their payment in a timely fashion and want transparency into those payments so they can forecast their cashflow easier. Supplier loyalty can improve when benchmarking initiatives are used to strengthen these elements of the purchase to pay process.
At the end of the day, shareholders really want to see one thing - return on investment (ROI). Increasing profit margins and providing returns are at the top of their priority lists, and a benchmarking program that leads to ROI strengthens shareholders’ loyalties.
By using stakeholders’ perceptions to inform your benchmarking initiatives, it’s important to keep in mind how stakeholders will view the data. Always seek to answer the question, “So what?” from their perspective. Ask questions such as:
What about this benchmarking initiative is important to them?
Why is it important for them?
If you’re behind, near, or above the benchmark, what does that mean to a stakeholder?
You’ve got to see where you are currently in order to understand how to improve. Without data and information guiding a benchmarking initiative, you’ll be attempting to improve your organisation in a vacuum.
In order to avoid making these vital benchmarking decisions in the dark, consider services like Basware’s Maturity Services including Maturity Lab and the 360° Evaluation which use a maturity assessment tool to determine your organisation’s maturity across seven areas of business.
After reviewing this detailed report, Basware specialists coach you through each targeted business area to help you create a plan to improve your organisation. This “inside-out” approach gives you a way to attack areas that need improvement, locate areas where you’re doing well already, and use all this data to make a plan of action best suited for your desired business outcomes. We do this through the two parts of our Maturity Services.
If you want to go deeper into your organisation’s evaluation, you can by partaking in a 360 Evaluation. You’ll gain further insights from your 360 Evaluation, but you’ll also get information regarding:
Analytics insights from your business processes,
Perceptions and feedback from your influential and important stakeholders,
SWOT analysis (strengths and weaknesses & identifying opportunities and threats),
Best plan of action, catered specifically to your business, and
Tons of insights from our Basware experts
If you want to go deeper into your organisation’s evaluation, you can by partaking in a Maturity Lab. You’ll gain further insights from your 360 Evaluation, but you’ll also get information regarding:
Analytics insights from your business processes,
SWOT analysis (strengths and weaknesses & identifying opportunities and threats),
Best plan of action, catered specifically to your business, and
Tons of insights from our Basware experts.
Peer benchmarking allows your organisation to see how they line up in comparison to industry best-performers. You’ve got to ask the important questions like, “How are my competitors differentiating themselves?” and “Where do I stack up against the best in my field?” Peer benchmarking provides an opportunity to get to know yourself and your competition better.
Basware offers peer benchmarking capabilities in our out-of-the-box Analytics solution. This way, customers can see how their success stacks up against others across the purchase-to-pay process. Using best-performers as the benchmark, organisations can see if they’re aligned, behind, or ahead of the industry average in a variety of purchase-to-pay categories such as:
E-invoice rate,
Spend under control,
Automated invoice processing, and
Payment times
With this sort of visibility available at your fingertips, integrated into your Analytics solution, Procurement and AP departments have a clearer view of what sort of SMART goals (Specific, Measurable, Attainable, Relevant and Timely) to set. And with updates occurring continually, your organisation will always remain up to date on the latest peer benchmarks.
Learn more in our whitepaper about how data affects every part of the source-to-pay (S2P) process and discover ways you can use it to benchmark your business. Questions? Contact us!