Benchmarking

Need

The global business landscape has been evolving rapidly over the years, and companies ’ are adopting various methods to stay ahead of competition. With globalisation of capital markets, investors are now quick to move their capital based on financial performance.

CEOs, CFOs and senior managers are under constant pressure to deliver better results every quarter through enhanced productivity, higher growth or lower costs. In this dynamic environment, it becomes imperative that companies realize and adopt the best practices followed by industry leaders. In this context, companies need to ensure that they adopt objective measures to compare their performance vis-à-vis others in the market or in the industry globally.

Benchmarking is a proven tool to help companies understand their performance relative to similar companies, usually within the same industry, for a variety of business issues and processes.

The objective of a benchmarking exercise is to assess the performance of the organisation. It is a process used in management and can be conducted internally as well as externally. External Benchmarking involves comparing the performance of the organization with those of competitors and industry leaders and provides the CEO and top management valuable insights into issues, performance and trends at a global and / or regional level. Internal Benchmarking is used to track efficiencies and support continuous improvement programs at a departmental, divisional or even at a corporate level.

Benchmarking exercises are routinely conducted on the following functions like finance, operations, marketing and HR and involves a detailed assessment using key performance tracking measurements.

Financial Benchmarking

Financial benchmarking allows a company to compare and assess performance against top performers in the industry based on its financial statements. D&B employs a proprietary methodology for conducting benchmarking studies across industry sectors. D&B Research & Advisory Services teams rely on their experience of various sectors and employ relevant financial analyses to highlight the client’s relative positioning with respect to key competitors, industry averages and similar businesses in other industries.

D&B‘s Research and Analysis (RAS) team of consultants work closely with the clients to clearly understand the requirements and conduct in depth analysis to highlight client’s current relative positioning.

D&B RAS actively leverages on D&B’s vast reservoir of knowledge of businesses and markets across the globe. D&B Global Knowledge Base combines information from D&B’s Economic Analysis Group (EAG) that tracks economies, markets and industries worldwide, and from Risk Management Solutions Group (RMS) that manages a global database of over 100 million companies. D&B RAS draws upon this Global Knowledge base as well as primary and secondary research to supplement its understanding of regional and international business environments.

D&B’s Benchmarking Methodology comprises an eight-step process consisting of:

• Analysis of client’s requirements
• Industry review & market overview
• Estimation of key industry averages
• Short-listing of key industry players
• Collection of business & financial data for key industry players
• Detailed analysis of key industry players’ and client’s performance
• D&B’s Relative Financial Position Model (A dynamic evaluation system that assesses companies and financial institutions on financial parameters and helps to determine the relative position of the companies being studied with respect to each other.)
• Key Observations and Recommendations

Sample Output

Benefits

Many clients in the region have benefited from adopting D&B’s Relative Financial Positioning Model for benchmarking. D&B’s financial benchmarking services provide the CEO, CFO and senior management at the client with an objective measure of business performance on an on-going basis. It also allows the management to understand the industry trends and positions of key competitors.

D&B’s financial benchmarking model also studies linkages between business, market & industry factors and the resulting financial performance.

Clients across diverse industries like FMCG, Logistics, Retailing, Manufacturing, Banking, Services etc. have used D&B’s services in benchmarking.

The benefits of benchmarking studies can be summarised as under:

• Helps assess the current state of performance
• Helps assess the performance of competitors
• Provides insight into industry and market trends
• Acts as an objective tool of performance measurement at enterprise level
• Identifies areas of good and sub optimal performance
• Analyses reasons for poor performance
• Suggests potential course of action for improvement
• Acts as a support tool for continuous improvement initiatives

To learn more about Research & Advisory Services, send us a message on mail@dnbsame.com or info-egypt@dnbsame.com call us on +234 9 461 3291 for Nigeria and +202 2524 2425 for Egypt.