What benchmarking is
Benchmarking is a Business Excellence tool for finding, adapting and implementing outstanding practices in order to achieve superior performance. Benchmarking comprises prioritisation of strategic improvement needs (the why), measurement (the what - the Benchmarks) and practices (the how – the doing of benchmarking). Re-measure tracks performance improvement.
Benchmarking can be used to generate both incremental change and wide-ranging strategic reform for an organisation. It is a learning process in which information, knowledge and experience about leading practices is shared through partnerships between organisations. It allows an organisation to compare itself with others and, in the process, step back from itself and reflect. Comparative measurement through benchmarks/ and benchmarking helps to identify problems and opportunities and also test hypotheses and “gut feelings” about performance. Benchmarking offers an organisation an opportunity to change and to improve.
Benchmarking is not a single event. It is an ongoing process for finding improved ways of doing things. The basic steps are:
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Identify what needs to improve in your services
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Find organisations with best practice in the relevant areas
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Partner with those organisations to learn from their experiences and share your own experiences
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Gain an understanding of strengths and gaps in your own practices
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Develop options for improvement
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Develop a business case and/or an implementation plan, including an evaluation plan
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Implement the change
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Review performance
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Identify further opportunities for reform.
What benchmarking is not
There is an important distinction between benchmarking as a
process and specific benchmarks. Many people regard the benchmarks
as benchmarking, when this is only a small part of the benchmarking
process.
Benchmarking is the process that starts from identifying an
area for improvement and ends in enhancing the quality of its
services.
Benchmarks are data comparisons, such as performance output
figures. They can be a pointer to what you should be improving
and from whom you should be learning.
Benchmarking does not mean simply collecting and comparing benchmarks
or other performance figures (eg staff turnover or debtor days).
Performance is invariably measured in different ways by different
organisations and figures alone are not a reliable basis for
comparison. However, it can be valuable to partner with other
organisations on a regular basis to compare performance figures
and discuss the merits of alternative management practices and
systems.
Types of benchmarking partnerships
Sector benchmarking: |
Is conducted in partnership with similar functions areas
in similar types of organisations eg government agencies.
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Industry or Functional benchmarking: |
Involves partners in the same functional area, such as
HR, finance and fleet management, in the private or public
sector.
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Generic benchmarking: |
Communications with operational communications
in a private sector organisation. The range of comparisons
is usually very broad within a common theme (for example,
for communications: customer service, internal communications,
strategic planning, or turn around times).
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Internal benchmarking: |
Is partnering between different areas within
the one organisation. For example, the HR and Finance areas
within an organisation could develop a balanced performance
measurement system. Benefits are that potential benchmarking
partners are easy to identify, information sharing is usually
straightforward and can result in improvement of strategies
and processes within the organisation. The opportunities
for learning from better practice are, however, limited
to the scope of the internal partners.
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Competitive Benchmarking: |
Involves partnering with potential competitors
(eg outsourcing services). The willingness and openness
of competitors to share sensitive information determines
the extent of benefits. However, where there are common
interests, competitive benchmarking can be very useful.
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Organisations starting their first benchmarking
project may test the water with sector benchmarking in a familiar
environment and move on to other forms once the benefits of benchmarking
are established and accepted.
Generic benchmarking often produces the greatest benefits because
it highlights ways of working outside existing paradigms. However,
this demands a sound knowledge of the benchmarking process and
organisations must be specific about where improvements are needed,
to ensure that relevant benchmarking partners are selected.
Partnerships can be at the internal, local, state, national
or international level. Organisations need to determine the most
appropriate choice for each situation.
What is Benchmarking?
A business Excellence tool for finding, adapting and implementing
outstanding practices in order to achieve superior performance
Benchmarking comprises measurement (the what)
and practices (the how).
Remeasure comparatively tracks performance improvement.
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