Strategic Management Accounting: Benchmarking and Cognet Case

This assignment delves into the concept of benchmarking within strategic management accounting. It begins by defining benchmarking and its role in comparing business processes and performance metrics to industry standards. The assignment highlights the primary limitation of benchmarking, which is that it often overlooks the underlying factors contributing to a competitor's success or failure, focusing solely on numerical data. The assignment then presents a case study involving Cognet's sales order department, including an activity cost matrix, relevant operational information, and the company's decision to implement new software. The case study provides details on cost and volume changes in various activities within the department, such as salaries, stores/supplies, and IT costs. The assignment requires an analysis of these changes, including the allocation of additional costs and the calculation of revised cost levels for customer negotiations and home orders processing. The overall goal is to evaluate the impact of benchmarking and strategic decisions on the sales order department's efficiency and effectiveness.

Running head: BENCHMARKING 1
Benchmarking
Student’s name
Institutional Affiliation
Date

BENCHMARKING 2
Strategic Management Accounting
Benchmarking
Benchmarking involves the practice of comparing business processes and
performance metrics to industry best and best performance from other companies. Although
benchmarking has been one of the most vital tools of business performance management that
help to improve efficiency by constantly improving business performance through new
procedures and ideas learned from another organization, it is curbed with a limitation, (Castro
and Frazzon, 2017). Thus, the biggest lack of benchmarking is that it shows only numbers
without taking into account factors that have affected the success/failure of competitors. Most
companies use the competitor’s goals and visions that were flawed due to some specific
factor thereby settling for extremely low standards, (Coskun and Altindag, 2017). When a
company rely on the benchmarking and relax after excelling beyond competitors’ standards,
they may face the danger of arrogance and complacency. In every success and failure of a
competitor, there are certain factors that are responsible which benchmarking strategy tends
not to detect it, thus, leading to the company unplanned losses.

BENCHMARKING 3
Reference
Castro, V.F.D. and Frazzon, E.M., 2017. Benchmarking of best practices: an overview of the
academic literature. Benchmarking: An International Journal, 24(3), pp.750-774.
Coskun, Z. and Altindag, E., 2017. EFFECTS OF INSTITUTIONALISATION FACTORS
AND BENCHMARKING TECHNIQUES ON THE FIRM PERFORMANCE. Journal of
Business Economics and Finance, 6(2), pp.155-167.