Benchmarking

Purpose:
Benchmarking helps to improve process effectiveness, product quality and service delivery. It enables an organisation to compare their existing performance and approach to others, and identify elements that can be adopted and adapted in their business context. Benchmarking enables organisations to compare and improve themselves and prompt innovation.

Although benchmarking is widely used, it not a precise science and there are many different approaches - ranging from models of quality measurement to basic comparison undertaken on a pragmatic basis. It is often necessary to tailor an approach that provides a sustainable method of benchmarking in view of the organisational goals and business needs.

Fitness for purpose checklist:

• Has the type of benchmarking programme, and the approach to be adopted been agreed by the stakeholders?
• Are their suitable reference sites or datums on which to compare existing practices?
• Are all parties willing to adopt a benchmarking code of conduct?
• Is the organisation prepared to make changes by adopting/adapting best practice?
• Is the organisation willing to commit to an ongoing improvement programme in which benchmarking is perceived as an important technique?
• Is the organisation able and willing to commit adequate resources for benchmarking?

Suggested content:

Individual organisations tend to customise existing models to fit with their overall approach to continuous improvement and background culture.

A typical process is likely to include:

• Planning - identifying the subject area to be reviewed, defining the objectives for the study and the criteria that will be used to assess success, selecting the approach and type of benchmarking, identifying potential partners etc.
• Collecting data and information - developing with partners a mutual understanding and benchmarking protocol, agreeing terminology and performance measures to be used, undertaking information and data collection, collation of findings.
• Analysing the findings - review of findings, gap analysis, seeking explanation for the gaps in performance, ensuring comparisons are meaningful and credible, communicate the findings, identify realistic opportunities for improvement.
• Implement recommendations - examine the feasibility of making improvements with respect to organisational constraints and preconditions, obtain the support of key stakeholders for making the changes needed, implement action plans, monitor performance, keep stakeholders informed of progress.
• Monitoring and reviewing - evaluate the benchmarking process and the results of improvement initiatives against business objectives, document the lessons learnt, periodically re-consider the benchmarks in the light of changes. 

Source information:

• Programme management
• Knowledge of process improvement strategies and benchmarking techniques
• Awareness of suitable organisations, forum for benchmarking, or benchmark repositories
• Process definition, process models, service definition (service catalogue, Service Level Agreements)

Notes:

• Quantitative benchmarks often require a significant investment in research and can provide metrics-based results. Formalised methods such as the European Framework for Quality Management (EFQM) Excellence Model®, are also quantitatively based, requiring inputs which can be represented numerically and providing calculated results which provide metrics and league table comparisons.
• Alternative approaches focus on more qualitative comparisons and the identification of good practices.
• Three types of benchmarking are commonly recognised:
• Process - focusing on discrete business processes, e.g. strategic planning, procurement, service delivery etc.
• Performance - enabling an assessment of competitive position through product and service comparisons. This type of benchmarking is usually focused on costs, technical quality, ancillary service features, and performance characteristics.
• Strategic - seeking to identify winning strategies across a number of market domains. This type of benchmarking requires a longer planning horizon for benefits to be realised.
• The way in which a benchmarking study is structured will determine the extent to which the exercise is successful. It is important to ensure that a significant proportion of time is spent at the outset defining the focus and scope of the study.

Further information:

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