Benchmarking

Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests or best practices from other industries. Dimensions typically measured are quality, time, and cost. In the process of benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compare the results and processes of those studied (the “targets”) to one’s own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.

The term benchmarking was first used by cobblers to measure people’s feet for shoes. They would place someone’s foot on a “bench” and mark it out to make the pattern for the shoes.

CREinFocus advocates internal benchmarking first and foremost. Rightsizing the footprint of the portfolio and the associated investments and recurring costs is a fundamental requirement for optimal financial performance.

Peter Drucker once said, “Focus is the key to economic success.”

In the not-too-distant past, business cycles were longer. That made the focus on real estate less urgent. Today business cycles are very often short. That can be precarious for both owned and leased real estate. It’s costly to get in. And it’s costly to exit. Historically, labor was cheap and technology was expensive. Today, labor is expensive and technology is cheap. This impact on corporate real estate is profound.

In the near term, CREinFocus will help its clients determine the optimal targets for both space and expense. In the mid to longer term, our anonymized data will give those same clients a competitive edge for industry-specific and geographic decision making.

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