Benchmarking Methodology

OPEXEngine follows a rigorous benchmarking process to identify - and help subscribers learn from - the most effective operating practices in their industry.  Benchmarking is not an operating plan or strategy, but rather a series of guideposts to help a company to identify opportunities for realizing greater efficiencies.  Rarely is any company most efficient in every facet of operations, so everyone can learn something valuable from peers.

In each of our four phases - planning, data collection, data analysis and reporting - OPEXEngine adheres to the Benchmarking Code of Conduct of the American Productivity and Quality Center (www.apqc.org), a recognized leader in the benchmarking of performance and best practices.

Planning

To identify and define the most useful metrics to benchmark, we consult extensively with numerous chief financial and other operating officers in each industry we cover, as well as tap our own P&L operating experience.  From this research, we devise data definitions for each metric in the clearest terms to assure data consistency and accurate comparisons.  We regularly consider collecting data on new benchmarks, remaining sensitive to the time and effort required of subscribers to collect and submit new data.

Data Collection

Subscribing companies enter line-item data into a secure, Excel-like web-based form.  OPEXEngine data analysts review submissions for completeness and to assure consistency with our standardized metrics definitions.  Data is blinded and tagged by industry segment and other parameters.  All data are held in a secure and confidential database, and no individual company information is revealed.

Data analysis

Data collected for each metric are automatically compiled into benchmarks - say, "marketing expenses as a percentage of total revenue and as a percentage of total operating expense," as measures of expense efficiency.  OPEXEngine business analysts meticulously review industry and segment reports for emerging trends in such benchmarks against baseline data and report statistically meaningful changes.  We round out the statistical analysis with selected interviews of companies reporting the trending indicators to provide context for the changes.

Reporting

OPEXEngine provides a custom report to each subscribing company, comparing its metrics against benchmarks for the overall industry, and as our data set grows, for its sub-segment peers as well.  Metrics are reported in the data format most relevant to the given benchmark - as a percentage of total revenue or marketing dollars expended per customer, for example.

Most benchmarks are reported as the median value of each of three ranges:  the median value for the upper 25% of reported figures, the median value for the lowest 25% of the reported figures, and the median value for the middle 50% of reported figures:

Metrics and benchmarks are reported by industry segment, revenue size, revenue models, sales channels, and major world geographies.  Additional customer queries on the database are available.