By Mike Cieri
Benchmarking is a way of determining what is the best performance being achieved – whether in a particular organization, a competitor, industry or by an entirely different industry. This information can then be used to identify gaps in an organization’s processes in order to achieve a competitive advantage.
There is no single way to perform benchmarking although there are 6 steps that are considered best practice.
- Decide what to benchmark – Because benchmarking can be applied to any business process or function, a range of research techniques may be required. It is important to pick a benchmarking project that is significant to meeting the organizations goals. Some examples to consider:
- Where do bottlenecks occur;
- Where frequent complaints arise;
- Which functions contribute most to their favorable or unfavorable image;
- What will have the most impact on achieving strategic goals and objectives;
- Where the greatest opportunities for substantial gain are likely to reside; and
- Which functions consume the greatest portion of the organization’s resources.
- Understand the process in your organization – A thorough understanding of your own processes is important for several reasons. First, it is difficult to apply lessons learned from others if you have not analyzed your process. Second, understanding your internal process will help you gather information. Finally, having a base line performance provides a point against which improvement effort can be measured.
- Identify organizations that are leaders in these areas – Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade & professional associations, and magazines to determine which companies are worthy of study.
- Gather & analyze data – Benchmarking data can best be collected through telephone interviews, site visits, surveys and/or questionnaires. Typically questionnaires are used to gather information. The questions that you include in the questionnaire should be selected carefully in order to meet your needs without overburdening the organization providing the information.
Once you’ve gathered all the data from your benchmarking partners, look for trends and decided what may be transferable to your organization and/or what you are willing to change in order to improve your business results.
- Implement new and improved business practices – Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process.
- Monitor and adjust as needed – As you implement the improvement plan make sure you are getting the desired results. If not, analyze what’s getting in the way and make adjustments.
Unfortunately, one cannot guarantee the success of your efforts, but we can give tips for success:
- Understand your process and the core principles of benchmarking.
- Develop a team with stakeholders involved.
- Get a champion from upper management.
- Commit adequate resources and training
Typical benchmarking projects.
- Process benchmarking
- Financial benchmarking
- Performance benchmarking
- Strategic benchmarking
- Functional benchmarking
- Best-in-class benchmarking
About the Author
Mike Cieri, MSIR, is Vice President of Mardac Consultants and been in the Human Resource Management field for over 20 years. During this time he has held a variety of management positions, including several years on the executive management team of a large corporation as Vice President of Human Resources and Safety, as well as Vice President of Operations.
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