Benchmark in Excel
Several options are possible to do benchmark in Excel. For example, you can choose to dedicate a sheet to a competitor, on which you will sift through all the analysis criteria selected. Your Excel document will then include as many tabs as there are competitors.
Or, on the contrary, opt for an approach based on criteria. In this case, each sheet compares competing practices on a given criterion, with one column per competitor, and one line per point of analysis.
For example: if you are carrying out a digital benchmark, you can devote the 1st sheet to the structuring of the content, the 2nd to the functionalities, the 3rd to the media and the 4th to the editorial line.
The advantage: simple and free, it allows weighting and graphic rendering.
The downside: less suitable for visual or editorial benchmarks that require the integration of screenshots.
Types of benchmark
Benchmarking is used both in macro-environment and in micro-environment. You can use it to respond to both global and specific issues.
Types of benchmark |
Descriptions |
| Internal | Comparison of the company’s internal services: process that makes it easy to put the benchmark into practice, before looking elsewhere for better practices. |
| Competitive | Comparison with direct competitors: between competing companies seeking to improve their processes for the benefit of their customers or against other competitors. |
| Functional | Comparisons with external departments or services: between companies, competitors or not, which compare their support processes (human resources management, administration, logistics, etc.) and adapt ideas likely to improve their competitiveness. |
| Generic | Comparisons of work processes or methods: look for best practices from different sectors of activity. |
Creating Benchmarks in Excel
To create a benchmark in Excel, you’ll need to follow these steps:
Identify the data set that you want to benchmark. This could be a set of sales figures, a list of expenses, or any other set of data that you want to compare.
Determine what you want to use as a benchmark. This could be a specific value that you want to compare your data set to, such as an industry standard or a goal that you’ve set for yourself.
Create a new column in your Excel spreadsheet where you’ll calculate the benchmark. For example, if you’re comparing your sales figures to an industry standard, you might create a column where you calculate the percentage difference between your sales figures and the industry standard.
Use Excel functions such as “IF” statements, “SUM” and “AVERAGE” to calculate the benchmark.
Once you’ve calculated the benchmark, you can use Excel charts and graphs to visualize the data and make it easier to compare.
Writing a Benchmark Report:
Once you’ve created your benchmarks in Excel, it’s time to write a benchmark report to share your findings with others. Here are the steps to follow:
Start with an introduction that explains why you conducted the benchmark study and what your goals were.
Provide an overview of the data set that you used and any assumptions that you made.
Describe the benchmarks that you used and how you calculated them.
Present your findings in a clear and concise manner, using charts and graphs to illustrate your data.
Analyze your findings and explain what they mean. For example, if your sales figures are significantly lower than the industry standard, you might discuss possible reasons for this and suggest strategies for improving sales.
End with a conclusion that summarizes your findings and suggests next steps.
Example of a Benchmark Report:
Introduction:
This report presents the findings of a benchmark study conducted to compare the sales figures of our company with the industry standard. The goal of the study was to identify areas where we can improve our sales performance.
Overview:
The data set used for this study included sales figures for the past year, broken down by product line. We assumed that the industry standard for sales performance is a growth rate of 10% per year.
Benchmarks:
We used a benchmark of 10% growth rate to compare our sales figures to the industry standard. To calculate this, we created a new column in our Excel spreadsheet where we calculated the percentage difference between our sales figures and the industry standard.
Findings:
Our findings show that our sales growth rate for the past year was only 5%, which is significantly lower than the industry standard of 10%. This suggests that we need to improve our sales performance in order to remain competitive in the market.
Analysis:
Possible reasons for our lower sales growth rate could include increased competition, changes in consumer preferences, or a lack of effective marketing strategies. To improve our sales performance, we might consider developing new products that better meet the needs of our customers, increasing our marketing efforts, or exploring new markets.
Conclusion:
In conclusion, our benchmark study shows that we need to improve our sales performance in order to meet the industry standard. We recommend that we explore strategies such as developing new products and increasing our marketing efforts to achieve this goal.
Benchmark Example
Company “A” used the performance benchmark to compare its product “X” with its competitor’s product “Y”. She discovered that the price of product “X” which she produces and markets is slightly lower, but it has less functionality than product “Y”.
Aware that to improve its market share and become sustainable, the company must increase the number of functionalities of its product while maintaining a low selling price, the management decided to benchmark its process.
To do this, company “A” set up a team that studied the value chain analysis of product “X”. The team noticed that the activities that weigh the most on costs are marketing and the purchase of semi-finished parts. They also found that by buying standard semi-finished parts on the market, it is difficult to introduce new features, as it would require customizing the parts for her product “X”.
Based on these findings, the benchmarking team assigned appropriate metrics to marketing and purchasing activities and collected the required data. The company joined the benchmarking network and within weeks gathered enough data to compare the performance of its processes.
The results indicate that marketing activities could be greatly improved. The team found that many industrial companies profitably attract new customers through strong online advertising. Yet other external observations showed that the return rate of advertising was significantly lower than that of social media. Therefore, she opted for the use of social media, this allowed her to attract more customers, while reducing her costs by 20%.
Secondly, she focused on studying the interest of buying semi-finished products on the market. Even if the approach provides flexibility, it is more expensive and does not allow the product to be personalized. However, according to their conclusions, this activity can be improved by manufacturing the parts within the company or by establishing long-term relationships with suppliers. The data collected and the experience of other similar companies have shown that the best option would be to seek to establish long-term relationships with suppliers. It would cost less than making the parts or buying them on an open market. This solution also makes it possible to order personalized parts, which proves to be essential for developing the new functionalities of the product.
By benchmarking its activities, the team identified the presence of overheads in the company’s production process and introduced new ways to improve current processes to improve profitability and business agility.
Best Reports for Decision Makers in Business in in Excel: Download Now, It’s Free!
Example Benchmark in Excel
| Benchmarks | Core Feature 1 Benchmark Description |
Core Feature 1 Score (1 = weak; 10 = strong) |
Core Feature 2 Benchmark Description |
Core Feature 2 Score (1 = weak; 10 = strong) |
Core Feature 3 Benchmark Description |
Core Feature 3 Score (1 = weak; 10 = strong) |
Overall Benchmark Score |
| Your Organization | 6 | 3 | 9 | 18 | |||
| Benchmark Organization 1 | 4 | 7 | 6 | 17 | |||
| Benchmark Organization 2 | 5 | 4 | 7 | 16 | |||
| Benchmark Organization 3 | 2 | 1 | 4 | 7 | |||
| Benchmark Organization 4 | 5 | 10 | 10 | 25 | |||
| Benchmark Organization 5 | 1 | 5 | 5 | 11 | |||
| Benchmark Organization 6 | 6 | 1 | 6 | 13 | |||
| Benchmark Organization 7 | 7 | 7 | 10 | 24 | |||
| Benchmark Organization 8 | 8 | 7 | 9 | 24 | |||
| Benchmark Organization 9 | 3 | 8 | 1 | 12 |
Download for free this Benchmark in Excel
How do you write a benchmark report?
1. Write down the summary
Here is some information to include in the summary.
Our benchmark has shown that the sites studied were largely made on specific developments, when it comes to major players present in several countries. On the other hand, the more direct competitors have used CMS (Content management system) to create their site.
PrestaShop seems to be popular, and it restricts the e-commerce functionalities offered to a certain extent (obligation of functional choices imposed by the editor).
The fundamentals will be applied to my project, and in particular:
- a standard catalog categorization for textile shops;
- standardized product sheets, in which I will take care to add precise information both on my products, but also on their maintenance;
- classic management of the ordering process, so as not to confuse Internet users;
- the possibility of placing orders without having to create a customer account, although I will retain this possibility;
- management of discount coupons and promotional offers.
All this will have to be carried by the CMS that I will choose after a more in-depth technical study.
Few of my competitors offer chat systems to contact an operator. This feature seems to be little used in this professional environment. Maybe my potential customers are less used to this kind of digital tool to answer visitors’ questions?
Still from the user’s point of view, customer reviews are very present, both at the level of the articles presented, and of the sites as a whole.
While some sites include reviews whose source is not verifiable, the major players use third-party solutions to guarantee the credibility of the comments published and the ratings received.
It is up to you to supplement this information with your own observations, and to write a final summary of the observations of your benchmark.
2. Write down the elements of the benchmark
before starting a benchmark, you have to know what you are looking for. A self-analysis is therefore essential to set the limits of this comparative study. This reflection can be formalized in writing in a collaborative work tool within the company or in specifications.
3. Select companies
It is advisable to choose companies recognized for what you are looking to improve: know-how, productivity, communication… In a niche market where few competitors excel, nothing prevents you from comparing yourself to companies with different business sectors.
4. Write down your collected data
general conditions of sale, online reviews, social networks, press… many resources available online allow you to find information. Moreover, studying companies that are not direct competitors opens the door to more collaboration.
5. Write down your comparison
Once the information has been collected, it should be analyzed and compared with your own practices. The spreadsheet is a basic tool for carrying out this work.
6. Set up an action plan
The results obtained must highlight the competing practices that it would be interesting to adapt to your company. These changes are to be implemented in the form of an action plan to be communicated to all the departments concerned.
7. Finalize and formalize your document / benchmark
This synthesis is now complete.
If you have to present your work, you will begin by explaining your approach in a few words, you will summarize the process for selecting competitors that you will have applied, then you will present the main categories of criteria used for your study.
Then come the restitution sheets for each of the sites you have studied.
Finally, the last pages will be devoted to your conclusion.
How to do a benchmark? The simple steps to follow like the Pros
Photo credit: danielkirsch via Pixabay
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