Importance of benchmarking
PLM often requires new types of skills and capabilities and this can necessitate extensive cultural and strategic changes to be made within an organization — a process that can take anywhere from months to years. The organization also needs to ensure that it is on the right track with the changes. And here, benchmarking can play a key role by helping you remain focused and on-course.
Benchmarking can be about comparing your current products to your past products, or about comparing your products to those from your competition. This can tell you how well — or how poorly — your product is performing in particular KPIs. These key performance indicators could range from adoption and stickiness to customer feedback and net promoter score.
ProductCraft, which aggregates insights from product leaders, points out
that product performance benchmarks exist so that companies can identify ways to make their products better. “Benchmarking is a key part of the continuous improvement cycle, which includes measurement, comparing results to competition, and identifying opportunities for improvement. Before a company can reap the benefits of product benchmarks, the product organization needs to ensure it is effectively capturing product data and measuring the right things.”
The important bit here, of course, is knowing what these right things are and being able to prioritize them according to their importance to the organization. As management consultancy DRM Associates observes
, no organization can improve all aspects of product development at once. “The implementation of product development best practices can be viewed as a journey rather than a destination.” And the first step on this journey is to understand the practices that should be adopted. Second step would be to consider the strategic direction for the organization — for example, the goal could be to become a low-cost producer, or the most innovative producer, or perhaps the highest quality producer. Next, the organization must assess its strengths and weaknesses. “By focusing on the gap between where a company is and where it needs to be, priorities can be set for making improvements.”