How to use Financial Analysis

Benchmarking is a self-improvement tool that enables organizations to compare themselves with others, identify their comparative strengths and weaknesses and learn how to improve them.

“Benchmarking opportunities are uncovered when a company conducts an analysis of its current policies and practices,” says Terry Wireman, senior industry analyst with GenesisSolutions, a specialized provider of maintenance management and reliability solutions across a broad range of industries.

He says benefits from benchmarking are gained by following a disciplined process composed of these 10 steps:
1. Conduct an internal audit of a process or processes.
2. Highlight potential areas for improvement.
3. Do research to find three or four companies with superior processes in the areas identified for improvement.
4. Contact those companies and obtain their cooperation for benchmarking.
5. Develop a “pre-visit” questionnaire highlighting the identified areas for improvement.
6. Perform the site visits to the three or four “partners.”
7. Perform a “gap analysis” on the data gathered compared to your company’s current performance.
8. Develop a plan for implementing the improvements.
9. Facilitate the improvement plan.
10. Start the benchmarking process over again.

“Benchmarking helps companies find the opportunities for improvement that will give them a competitive advantage in their marketplaces,” says Wireman.