5 Ways Consultants Can Use Benchmarking Analysis
Benchmarking analysis is an invaluable tool for today’s management consultants. Benchmarking involves comparing a current data set to historical data sets or data from industry peers. It can help consultants determine where clients are ahead of competition, identify areas for client improvement, boost the quality of the firm’s IP, and increase the firm’s competitive value.
A number of well-known firms have developed successful benchmarking analysis offerings. Gartner, for example, has provided benchmarking analysis to great acclaim. Gartner’s services give IT functions an unbiased perspective on how their performance relates to the competition. The Hackett Group also specializes in business benchmarking, using a database of data from over 13,000 engagements to inform their conclusions. PwC and Bain have also seen success in providing benchmarking analyses in operations, sales, and a number of other areas.
But benchmarking can be a complex process. In order to dive deep and understand the why behind the data, benchmarking requires more than simply comparing two sets of numbers. Worthwhile benchmarking can thus require a number of different tools and methodologies, depending on the project’s analytical focus. As with any analysis that involves a lot of data, the process can be costly and time-consuming. Consultants must collect data, often from multiple sources, clean and reformat it, and load it into whatever tool they use. The complexity of benchmark analysis, in fact, is perhaps why few firms are making use it today. Complex, manual processes can be dangerous to consultants as they are time consuming and error prone, making them susceptible to faulty conclusions.
The answer for today’s consultants is to automate the benchmarking process and map the data to specific models. By automating, consultants can reach conclusions faster and ensure that no errors occur. By using data models, consultants can ensure that data will be collected consistently over time. This consistency will allow them to draw more accurate conclusions. The benefits of automating benchmark analysis are numerous – here are just a few that we’ve identified.
Add A New Paid Offering
Benchmarking services provide consultants another offering for their portfolio, granting them a competitive edge. Benchmarking is a proven practice and can be highly attractive to clients who want to understand where they stand competitively. It can provide a level of historical certainty that other methods cannot. Some firms are even exploring “benchmarking As-A-Service.”
Define Gap Analyses with Data
Benchmarking data can inform consultants as to clients’ overall status in their industries better than any other method. By identifying specific performance indicators and comparing a client’s data to competitor data, consultants can draw accurate conclusions about where their clients can improve. Their guidance is then based on data with clearly measurable opportunities for improvement.
Create a Winning Pitch
By storing and automating the access of historical data, consultants can build a much better understanding of what a company needs to be successful. By using this knowledge to lead sales conversations, consultants can create a winning sales pitch by proving that their methods are backed by real data. Moreover, they can begin providing insights right at the start of an engagement.
Become a Thought Leader
In addition to informing sales pitches, the insights that benchmark data provide can help consultants become better thought leaders. They can use the knowledge they gain over time to prove their expertise in specific fields via publications, speaking engagements, etc.
Improve Intellectual Property
Consultants can also use benchmarking analysis to improve their own internal operations. Firms can benchmark against their own historical data, including the performance of their frameworks or assessments and key metrics of each engagement. By analyzing their own data over time, consultants can test the accuracy of their models and the success of their projects. On a more micro level, it can even allow them to test the success of their client interview questions. If some questions result in unclear answers, those questions can probably use some editing.
Automating benchmarking enables consultants to provide clients with additional value and improve their own intellectual property. Finding the right software for consistent and deep-diving benchmarking is key for consultants who want to add benchmarking to their portfolios or take their current methods to the next level.
