BENCHMARKING

DEFINITION
Benchmarking is a systematic study and comparison of a companys key performance indicators with those of competitors and others considered best-in-class in a specific function.

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 benchmarking

OBJECTIVES OF BENCHMARKING
Improve employee performance Helps to know about industry leaders and competitors Helps to determine world class performance Accelerate and manage change Improve customer satisfaction Become the best in the business

TYPES OF BENCHMARKING
Strategic benchmarking Performance or competitive benchmarking Process benchmarking Functional benchmarking Internal benchmarking External benchmarking International benchmarking

STRATEGIC BENCHMARKING
Improve overall performance by examining the long term strategies and general approaches that have enabled high performers to succeed. It involves core competencies, new product development, etc., Changes from this type of benchmarking are difficult to implement and take a long time to materialize.

PERFORMANCE OR COMPETITIVE BENCHMARKING

Performance characteristics of key products and services are compared. Benchmarking partners are taken from the same sector

PROCESS BENCHMARKING
It focuses on improving specific critical processes and operations. It often results in short term benefits

FUNCTIONAL BENCHMARKING
Benchmarking partners are drawn from different business sectors to find ways of improving similar functions or work processes. It can lead to innovation and dramatic improvements.

INTERNAL BENCHMARKING
It involves benchmarking from within the same organisation ( e.g business units in different countries) Usually less time and resources are needed.

EXTERNAL BENCHMARKING
It involves analyzing outside organisations that are known to be best in class. It provides opportunities of learning from those who are at the leading edge.

INTERNATIONAL BENCHMARKING
Best practitioners are identified and analyzed in the world. Globalisation and information technology are increasing opportunities for international projects.

REASONS TO BENCHMARK

BENCHMARKING PROCESS
Identify what to benchmark Determine what to measure Identify who to benchmark Collect the data Analyse data and determine the gap Set goals and develop an action plan Monitor the process

STEP 1 : IDENTIFY WHAT TO BENCHMARK

Clarify the benchmarking objective Decide whom to involve Define the process Consider the scope Set the boundaries Agree on what happens in the process Flowchart the process

CLARIFY THE BECHMARKING OBJECTIVE

DECIDE WHOM TO INVOLVE

DEFINE THE PROCESS

CONSIDER THE SCOPE

Human resources function Recruiting and interviewing process

SET THE BOUNDARIES

AGREE ON THE PROCESS

FLOWCHART THE PROCESS

STEP 2: DETERMINE WHAT TO MEASURE

Examine the flowchart Establish the process measures Verify that measures match objectives

EXAMINE THE FLOWCHART

Overall time to complete the process Completion time at each individual task Number of defects Costs

ESTABLISH PROCESS MEASURES

Consider measures outside the process Comparing and selecting your benchmarking measures Verify that measures match objectives

VERIFY THAT MEASURES MATCH OBJECTVES

STEP 3: IDENTIFY WHO TO BENCHMARK

Conduct general research Choose level to benchmark

STEP 4: COLLECT DATA

Internal Other companies

STEP 5: ANALYSE DATA AND DETERMINE THE GAP

Quantitative data Qualitative analysis

STEP 6: SET GOALS AND DEVELOP AN ACTION PLAN

Set performance goals Develop an action plan

SET PERFROMANCE GOALS

DEVELOP AN ACTION PLAN

Determine tasks, timeliness and responsibility Develop a contingency plan

STEP 7 : MONITOR THE PROCESS

Track the changes Make benchmarking a habit

ADVANTAGES OF BENCHMARKING
Helps to know organisations strength and weakness Satisfy the customer needs Motivate employees Helps to realize level of performance Promotes changes and bring innovation Cost effective and time efficient

DISADVANTAGES OF BENCHMARKING
Complex Difficult process Cannot quickly replace performance Time consuming