In: Finance
Does your organization (or one you are familiar with) use financial benchmarking? Would you use it if you had a chance to do so? Why or why not?
Yes, I am familiar with some companies that use financial benchmarking. Yes, I would certainly use financial benchmarking if given a change.
Explanation:
There are basically two types on financial benchmarking, they are
internal and external benchmarking.
Internal benchmarking includes comparison between teams
performance, individual or group performance within an
organization.
External benchmarking includes peers comparison with respect to
performance and practices of an organization.
Financial benchmarking demonstrates how best performing firms
complete any particular process in question , it helps executives
in decision making.
Financial benchmarking helps companies to identify winning
strategies which enabled best performing firms to be successful. It
also examines how the best companies compete which is helpful for
small and medium size companies in long term.
There are many financial benchmarking business intelligence
softwares available in the market that shows the financials of a
company compared to their competitors.
Financial benchmarking helps a company in identifying the
improvement opportunities. It also helps companies to look into
future and build winning strategies and plans through which it can
stay for longer term in the market and make profits.