The value of creating reliable knowledge infrastructure based on a foundation of data and competitive analysis cannot be overstated. This is the only reliable method of reporting on trends in a way that speaks to an industry’s overall digital competence.
Benchmarking Industry Report
The process of benchmarking, especially in the realm of digital competence, is vital to your organization’s self-awareness. Over recent months we’ve written about how even the most well-established companies must always keep an eye on their competitors (using competitive benchmarking), but it’s equally important to engage in continuous strategic benchmarking as well.
What Is Strategic Benchmarking?
A key theme that we continue to emphasize is the need to watch trends not only within your own industry but also throughout the digital ecosystem. This awareness of broad core competency trends lies at the heart of strategic benchmarking. Without an established paradigm through which to evaluate society’s digital evolution, you may have difficulty even defining what a “trend” consists of. The process of digital benchmarking across industries becomes far clearer when you have a specific procedure in place. The hallmark of the best-practice approach to benchmarking is a mindset of constant exploration, as well as an up-to-the-moment perspective on the changing digital landscape. By systematically keeping your company’s ear to the ground, you’ll be amply prepared for the next innovation, disruptive technology or revolutionary approach. This knowledge is the tool that allows businesses of all sizes to react in an agile way to potential disruptive forces.
Integrating the Two Benchmarking Concepts
It’s important to consider how competitive and strategic approaches to benchmarking interact with each other. If you spend all your time tracking your progress against your dozen closest competitors, you can undoubtedly generate a chart of your company’s relative performance on any given set of digital competencies. However, even if you are masterful at contextualizing your own company’s performance among its competitors, you may still be left grasping for straws regarding which specific digital function has the highest priority.
Similarly, you can monitor society’s digital evolution on a 24/7 basis, constantly following the latest market news as new startups attract stunning amounts of venture capital and legacy companies introduce cutting-edge digital functions. If you don’t know where your company stands in the context of those digital sea changes, however, the “trends” just serve as disconnected news items or points of interest. No level of competitive intelligence is complete if it just streams in as an RSS feed — no matter how comprehensive the news covered in that feed is.
The Right Toolset for Integrating Your Benchmarking Approaches
What this integration requires is a unique set of business intelligence skills, a bit different from the ordinary capabilities required for day-to-day business operations. The key here is translation. The ability to translate trends observed in the broader marketplace into actionable, measurable components of specific maturity and competency is somewhat subtle. Not only do analysts tasked with this goal need to understand the context in which trends emerge, but they also need to be able to pass that knowledge on to business leaders in mutually intelligible language. The metrics for benchmarking, and the key knowledge supplied by those metrics, will only be recognized by executives if they receive the information couched within a familiar vocabulary and mindset.
One key skill needed for effective translation of broader trends into actionable goals is the ability to perceive unexpected uses for emerging technologies. Here are two examples:
A while ago, there was a sudden uptick in the availability of mobile wallets. The original concept arose from the vision that phones could one day replace physical wallets, making people less dependent on carrying physical cash and personal identification. The catalyst for the initial realization of this vision was a straightforward question: Can we make the in-person shopping experience simpler? Whole Foods, CVS and Best Buy quickly signed on to mobile payment channels, and it became clear that retail stores were appropriate use cases for such technology. Other industries, however, didn’t quite recognize the utility of mobile-enabled transactions, and hung back from implementing it. Once State Farm took the leap and changed its insurance payment process to allow for premium payment via mobile app, however, it became clear that any type of financial exchange could be facilitated by mobile devices. After that, like a giant crystal forming around a single seed, the entire insurance industry suddenly looked into enabling payments via mobile.
Similarly, the concept of augmented reality has never seen a heyday as bright as this last year. After Pokemon Go provided a shining example of consumer-facing AR in action, everyone wanted a piece of the AR experience. Pokemon Go mimicry was everywhere. Developers at Sephora, Home Depot and a few other pioneers had recognized in AR a unique opportunity to disrupt traditional marketing entirely. Leveraging the AR trend in an entirely new way, they enabled consumers to point their phones or computers at specific products and encounter the buying experience on their own terms. Almost overnight, the retail and e-commerce space became totally different. Every company was suddenly exploring how to infuse their omnichannel strategy with some component of AR, and the market for this technology is popularly expected to reach $90 billion by 2020.
Sustained Monitoring Is Part of the Process
That translation of societal trend to a comparable and benchmark-able competency in a given industry is indispensable. Sheer analytical skill, though, is not enough to gain full value from an integrated benchmarking process. In order to completely understand what’s next, what’s driving change, and what’s about to become the status quo, constant monitoring must also be a basic requirement. The value of creating a reliable infrastructure based on a foundation of data and competitive analysis cannot be overstated. This is the only reliable method of reporting on trends in a way that speaks to an industry’s overall digital competence.
What Goes Into Benchmarking Infrastructure?
Of course each company has their own individual needs within the competitive benchmarking process, but it’s useful to enumerate some of the standard best-practice foundations for structuring information. With these elements in place, your organization can avoid the pitfall of being unfocused or being left with random disconnected morsels of information. Often, a professional outside benchmarking partner, with a laser-focused understanding of your company’s unique needs, is in the best position to work with you to move through these crucial foundational steps:
- Achieve support and buy-in from leadership: This is essential for success and requires that the benchmarking team includes effective communicators.
- Set clear objectives and scope for the benchmarking project: Like any project, you have to know what you’re looking for and when you’ve found it.
- Involve stakeholders throughout your organization: Some essential metrics may not be obvious unless you seek input from each department, as well as from external viewpoints.
- Document your own existing processes first: This helps make sure that you’re comparing “apples to apples” as you conduct your benchmarking work.
- Know the location of your own performance gaps and consider whether internal benchmarking needs to be conducted. This is a separate process in larger organizations, in which various branches or locations are measured against one another.
- Design and implement a standardized data-gathering procedure that can be readily replicated.
- Verify that the information you have gathered meets the original project objectives.
- Use the compiled intelligence to identify strengths and performance gaps, and prioritize the order in which those will be addressed. Implement changes on the basis of what was learned
- Engage executive leadership in the ongoing process, providing clear timeline, financials and ROI analytics.
- Create a plan for ongoing industry reporting, together with updating and re-evaluating as needed.
Benchmarking Enables an Evidence-Based Digital Transformation
The beauty of benchmarking is that it establishes standards of comparison. These standards create a context within which a multiplicity of data points can coalesce into a unified, actionable body of information. Clear metrics emerge for everything from recruitment to transportation, order and fulfillment processes to customer experience and technical quality. The takeaway is that digital no longer lives within its own individual IT silo; it infuses every functional aspect of your company. Thus, the digital benchmarking process can inform your standard SWOT analysis, in which you identify your company’s strengths, weaknesses, opportunities and threats. This type of analysis is vital for the formation of your digital strategy.