In the construction industry, there is fierce competition, generally on price. Multiple construction contractors bid for the same project. Based on these bids, the client decides which contractor should do the work. Construction companies want to bid the best to win and get the work. However, the bid should stay realistic and manageable. Otherwise, the contractor will not make a profit by executing the project.
Benchmarking is a powerful tool of project controls, which aims to improve project performance through a systematic approach and it can help construction companies improve their efficiency and effectivity in this competitive environment.
Here are the 3 best practices of benchmarking which can be applied by construction companies:
1. Internal Benchmarking
Internal benchmarking is about analyzing the internal processes and performance of a (construction) company. The employees often have ideas about the improvement opportunities within the company. The company must collect information about its project performance under different circumstances regarding these processes. The performance over time is then analyzed to identify disciplines or methods that can be improved internally.
2. Competitor Benchmarking
The performance of a company might be quite stable over time, which does not mean that it is a good one. To measure the performance of a company there is another method of benchmarking, which compares the performance of your company to your competitors.
This method is a logical method within the construction industry since your company wants to win the bid against the competitors. If a competing construction company wins the bid, it might be useful to compare the performance and processes of that company with yours. This industry comparison might result in an identification of gaps within your services or processes.
Besides getting insights into how you can perform better than your competitors, this method helps innovate. In the case of internal benchmarking, a company might stick to its standard procedures. However, with the insights coming through competitors benchmarking, the standard procedures could be improved.
3. Strategic Benchmarking
Not only competing companies can bring useful insights into how you can improve your performances. You can also learn from high performing companies which deliver other, not-competing services in the same industry, or even in other industries.
Strategic benchmarking is comparing your performance with a best-in-class company which is known for its high performance. Strategic benchmarking helps a company think beyond its own standards and come up with innovative processes and approaches.
Conclusion
In conclusion, several methods are available for the application of benchmarking in the construction industry and the three best practices are explained in this blog. Whichever you choose to apply, benchmarking can help you improve the performance of your projects and therefore win more bids and make more profit out of them.
Project Benchmarking with Cleopatra Enterprise
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