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Importance of Industry Benchmarking and Performance Reporting

The capability of attaining good organizational performance revolves around adopting the best practices that are suitable in the particular industry from which any company’s activities are based. To determine the best practices, an organization has to exploit the benchmarking tool for acquiring information about success tactics used by the competitors in the industry. Benchmarking involves finding the best practices and implementing them to attain competitive advantage, improve entity sales, and bring innovativeness in the organization. Performance reporting is the process by which an organization critically assesses its activities by analyzing various parameters to know whether it meets the set targets and business objectives. External performance reporting reveal the information on organizational progress whereby both financial and non-financial aspects such as inventory turnovers, expenditure and profits.

Benchmarking is an important tool for helping poorly performing businesses discover the best practices employed by well-performing firms in the same industry. The social media has helped many organizations to get information on the trending best practices of businesses in this dynamic industry. This tool helps the business to minimize its labor costs since it will not engage in many activities of research which are expensive and time consuming. The organization can additionally understand the best quality in the market and adjust its operations to meet the standards in the market (Wheeler and Elkington 2001). Moreover, benchmarking has helped smaller firms increase their profits and sales through understanding the best product promotion techniques, better production methods and adopt best management styles in their organizations.

Performance reporting has helped in improving the effectiveness of carrying out business operations through setting out benchmarks. The well-performing businesses pride themselves with best practices of customer satisfaction, increasing profits and high sales hence giving other firms a chance to learn from their output results…

 

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