Benchmarking and Best Practices 1

Wa e l E i n o
D r. S h e r i f D e l a w a r
Contemporary Management
December 20, 2009

What is Benchmarking?
"Benchmarking is the process of measuring an organization's
internal processes then identifying, understanding, and adapting
outstanding practices from other organizations considered to be
best-in-class.
Most business processes are common throughout industries. For
example; NASA has the same basic Human Resources requirements
for hiring and developing employees as does American Express.
British Telecom has the same Customer Satisfaction Survey process
as Brooklyn Union Gas. These processes, albeit from different
industries, are all common and can be benchmarked very
effectively. It's called "getting out of the box".
One of the biggest mistakes organizations make when first
benchmarking is that they limit their benchmarking activity to their
own industry. Benchmarking within your industry is essential.
However, you already have a pretty good idea how your industry
performs so it's imperative that you reach outside and above your
own industry into other industries that perform a similar process but
Benchmarking and Best Practices 2

may have to perform this process extremely well in order to

succeed. Here are a couple examples of how one industry can
leapfrog their competitor by learning and adapting a similar process
from a totally different industry:
Problem Solution
Benchmarked admittance process
with hospital emergency room
Customer surveys indicate long departments resulting in
wait times for hotel rooms, dramatically reduced check-in
especially for repeat times. Also netted less employees
Customers. needed, automation for frequent
hotel guests, and many more
process improvements.
Initial benchmarking research
Routine maintenance on indicated we are already #1.
aircraft between flights such as Brainstormed and discovered Indy
refueling, cleaning, tire checks 500 racing team pit crews have a
taking too long. Plane on the similar maintenance process and a
ground means more planes and similar requirement to get their
personnel are required to vehicle back on the track as quickly
maintain high level of service and safely as possible. After
and schedules. Need to reduce benchmarking pit crews
ground time required in maintenance turn-around-times for
between flights without aircraft between flights were
sacrificing quality or safety of reduced by more than half
passengers. saving/making the airline millions of
dollars within the first few years.

Types of Benchmarking

There are essentially three types of benchmarking: strategic, data-

based, and process-based benchmarking. They differ depending on
the type of information you are trying to gather. Strategic
Benchmarking looks at the strategies companies use to compete.
Benchmarking to improve improvements in business process
performance generally focuses on uncovering how well other
companies perform in comparison with you and others, and how
they achieve this performance. This is the focus of Data-based and
Process-based Benchmarking.
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TOP-10 Benchmarking Organizations

The following is a ranking of organizations that are heavily engaged

in benchmarking. These member organizations have implemented
internal benchmarking methodologies and practices to support their
entire organizations' efforts to improve their products and services
for both internal and external Customers.

These organizations are excellent role models for you to learn how
to deploy benchmarking throughout your workgroup, department,
division or entire organization. They are leaders!

Organization Ranking
Xerox 1
Saudi Aramco 2
U.S. Army 3
Dubai Municipality 4
Battelle 5
United Technologies 6
American Ordnance LLC 7
DynMcDermott 8
Fleet Readiness Center East Cherry Point NC 9
Allergan 10
Benchmarking and Best Practices 4

What is a Best Practice?

"best practices" are documented strategies and tactics employed

by highly admired companies. These companies are not "best-in-
class" in every area - such a company does not exist. But due to the
nature of competition and their drive for excellence, the profiled
practices have been implemented and honed to help place their
practitioners as the most admired, the most profitable, and the
keenest competitors in business.

We gather this information from a variety of sources. For the most

part, this information is based on interviews, surveys, and other
mechanisms of "primary" research - information that is simply not
available in the public sector. Other database documents are
distilled insights from secondary research -- books, magazines,
libraries, Internet, and other public-domain resources. This ensures
that the contents are truly valuable and are not simple re-hashing
or re-publication of press releases and articles.
Best practice through benchmarking
Applying best practice means learning from and through the
experience of others. One way of doing this is through
benchmarking, which allows you to compare your business with
other successful businesses to highlight areas where your business
could improve.

Best practice through standards

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Standards are fixed specifications or benchmarks, which are

established by independent bodies such as the British Standards
Institution (BSI). BSI develops both technical and management
standards:

• technical standards are precise specifications against which a

business can measure the quality of its product, service or
processes
• management standards are models for achieving best business
and organisational practice
Applying the appropriate standards to your business will enable you
to apply best practice across the organisation, and to work against
objective criteria to achieve manufacturing or service quality.

What are the benefits to the business?

A best practice strategy can help your business to:

• become more competitive

• increase sales and develop new markets
• reduce costs and become more efficient
• improve the skills of your workforce
• use technology more effectively
• reduce waste and improve quality
• respond more quickly to innovations in your sector

Management best practice

Management best practice involves:

• the communication of a clear mission and strategy

• leadership by example
• the setting of demanding but realistic targets
• an open and communicative management style
• clear and careful strategic planning
There are several business tools that you can use to achieve
management best practice, including:

• benchmarking
• forecasting
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• financial planning
• strategic planning
• performance monitoring
Using key performance indicators (KPIs) is an effective way of
monitoring your business. KPIs can be used to measure progress in
achieving business objectives across a range of activities and
enable you to identify areas that need attention. They can also can
be used to measure activities such as sales volumes, profitability,
quality and staff turnover.

The KPIs you choose will depend on your specific business. They
should, however, be related to your overall objectives, be clearly
measurable and provide an indication of where improvements need
to be made.

Refrences
http://www.benchnet.com/bppf2003e.cfm
http://www.businesslink.gov.uk/bdotg/