In our previous post, we showed that an evaluation of internal performance is a good place to start a corporate benchmarking exercise. We also explained that the most potent benefits come from external benchmarking, which examine performance, practices, and pricing.
Marketing teams can achieve maximum impact when they look at the world beyond their own desks, department, and company. Organizations that consider benchmarking a one-time exercise are likely to fail at achieving impactful outcomes. The key to the success of any benchmarking program is establishing a process for ongoing assessment and a culture of continuous improvement. Executing periodic benchmarking along key points in the workflow helps drive process optimization, maximize resources, and validate cost controls.
Several common perceptions emerge from benchmarking. First, leaders who do not have the time, resources, or technology avoid tapping into benchmarking. Second, those who apply benchmarks infrequently are unable to leverage and progress from their use. And last, those who incorporate benchmarking as an integral part of an organization’s overall process improvement practices are fostering improved business outcomes.
Only 54% of marketing decisions are being influenced by marketing analytics. Marketing leaders cite poor data quality and non-actionable results as top reasons why they do not rely on analytics to make decisions.
Source: Gartner Marketing Data and Analytics Survey 2020
Effective benchmarking processes involve four key steps. Planning – identify what is to be benchmarked, comparative companies, and specific data elements. Analysis – determine current performance levels and gaps, project future performance levels, and communicate findings. Integration – establish functional goals and develop action plans. And Action – implement actions, monitor progress, and recalibrate benchmarks as needed.
To gain the greatest benefit from benchmarking, teams need to overcome the triple challenges of Granularity – when benchmarking research is too general or too specific, Data – when availability, quality, and statistical relevance are in question, and Value – focused on how the results are utilized to drive successful change.
Through 2023, 75% of technology providers will incorporate business outcome and risk avoidance metrics into marketing programs and product offerings.
Source: Gartner, Nine Predictions for Technology and Service Providers in a World of Turmoil, 2020
Progressive results can be achieved when comparing marketing and procurement’s ability to execute efficiently (cost and productivity), and effectively (quality and value). Ultimately, identifying opportunities for improving processes, practices, and performance is the single most significant advantage of benchmarking.
The highest value of benchmarking is delivered when leaders learn from data results, apply the recommendations, track the success of the actions, and make continuous improvements based on the outcomes of those actions.
Looking to Technology Solutions
To gain better visibility through Benchmarking, companies need a robust spend taxonomy, a technology stack capable of tracking it, and disciplined operating models that ensure the accuracy and completeness of the data.
35% of marketing operations leaders say they use traditional office software such as spreadsheets, email, and document management systems to manage critical marketing operational activities.
Source: Gartner, 2020 Marketing Operations Survey
Today’s technology solutions centralize data capture activities to provide leaders improved transparency across the marketing, procurement, and supply chain ecosystem. Integrating a cloud-based solution also boosts data response times, enhances flexible capacity, and promotes enterprise data security.
In the Third Installment in this series, we will explain how marketing organizations struggle to adequately track internal and external project details and costs because most of them suffer from either incomplete or inaccurate data. And we’ll suggest ways to resolve those shortcomings through the use of available technology. You can read Part One of this series here
Ken McDonald is the founder of SourceSCM Consulting LLC, dedicated to partnering with businesses to drive cost optimization, accelerate organizational transformation, and execute innovative, customer-focused solutions. A trusted sourcing and supply chain expert with 30 years of Fortune 6 leadership experience, Ken focuses on sourcing, negotiations, contracting, supplier relationship management, risk, compliance, supplier diversity, distribution, and logistics operations in highly regulated industries. He began his career in retail and moved from there into lead roles in manufacturing and distribution. Ken volunteers as a sports coach and with various groups benefiting children’s charities, food banks, and struggling families.