Benchmarking is the process of identifying and learning from best practices in order to improve performance. It involves examining how other companies achieve high performance levels and understanding their processes. The key steps in benchmarking are: (1) understanding existing business processes, (2) analyzing processes of others, (3) comparing performance, and (4) implementing steps to close gaps. Benchmarking should be an ongoing process to continuously improve by learning from others. There are different types of benchmarking based on purpose, such as strategic, performance, process, functional, internal, external, and international benchmarking.
Benchmarking is the process of identifying and learning from best practices in order to improve performance. It involves examining how other companies achieve high performance levels and understanding their processes. The key steps in benchmarking are: (1) understanding existing business processes, (2) analyzing processes of others, (3) comparing performance, and (4) implementing steps to close gaps. Benchmarking should be an ongoing process to continuously improve by learning from others. There are different types of benchmarking based on purpose, such as strategic, performance, process, functional, internal, external, and international benchmarking.
Benchmarking is the process of identifying and learning from best practices in order to improve performance. It involves examining how other companies achieve high performance levels and understanding their processes. The key steps in benchmarking are: (1) understanding existing business processes, (2) analyzing processes of others, (3) comparing performance, and (4) implementing steps to close gaps. Benchmarking should be an ongoing process to continuously improve by learning from others. There are different types of benchmarking based on purpose, such as strategic, performance, process, functional, internal, external, and international benchmarking.
Benchmarking is the process of identifying and learning from best practices in order to improve performance. It involves examining how other companies achieve high performance levels and understanding their processes. The key steps in benchmarking are: (1) understanding existing business processes, (2) analyzing processes of others, (3) comparing performance, and (4) implementing steps to close gaps. Benchmarking should be an ongoing process to continuously improve by learning from others. There are different types of benchmarking based on purpose, such as strategic, performance, process, functional, internal, external, and international benchmarking.
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BENCHMARKING
Benchmarking is the process of identifying "best practice" in relation to
both products (including) and the processes by which those products are created and delivered. The search for "best practice" can take place both inside a particular industry, and also in other industries (for example - are there lessons to be learned from other industries?). The objective of benchmarking is to understand and evaluate the current position of a business or organisation in relation to "best practice" and to identify areas and means of performance improvement. The Benchmarking Process Benchmarking involves looking outward (outside a particular business, organisation, industry, region or country) to examine how others achieve their performance levels and to understand the processes they use. In this way benchmarking helps explain the processes behind excellent performance. When the lessons learnt from a benchmarking exercise are applied appropriately, they facilitate improved performance in critical functions within an organisation or in key areas of the business environment. Application of benchmarking involves four key steps: (1) Understand in detail existing business processes (2) Analyse the business processes of others (3) Compare own business performance with that of others analysed (4) Implement the steps necessary to close the performance gap Benchmarking should not be considered a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with the goal of keeping abreast of ever-improving best practice.
Types of Benchmarking There are a number of different types of benchmarking, as summarised below: Type
Description
Most Appropriate for
the Following
Purposes Strategic Benchmarkin Where businesses need to improve g overall performance by examining the long-term strategies and general approaches that have enabled highperformers to succeed. It involves considering high level aspects such as core competencies, developing new products and services and improving capabilities for dealing with changes in the external environment.
Re-aligning business strategies that have become inappropriate
Changes resulting from this type of
benchmarking may be difficult to implement and take a long time to materialise Performance or Businesses consider their position in Competitive relation to performance characteristics Benchmarkin of key products and services. g Benchmarking partners are drawn from the same sector. This type of analysis is often undertaken through trade associations or third parties to protect confidentiality.
Assessing relative level
of performance in key areas or activities in comparison with others in the same sector and finding ways of closing gaps in performance
Process Benchmarkin Focuses on improving specific critical g processes and operations. Benchmarking partners are sought from best practice organisations that perform similar work or deliver similar services.
Achieving improvements in key processes to obtain quick benefits
Process benchmarking invariably involves
producing process maps to facilitate comparison and analysis. This type of benchmarking often results in short term benefits. Functional Businesses look to benchmark with Benchmarkin partners drawn from different business g sectors or areas of activity to find ways of improving similar functions or work processes. This sort of benchmarking can lead to innovation and dramatic improvements.
Improving activities or services for which counterparts do not exist.
Several business units
within the same Internal Involves benchmarking businesses or organisation exemplify Benchmarkin operations from within the same good practice and g organisation (e.g. business units in management want to different countries). The main advantages of internal benchmarking are spread this expertise quickly, throughout the that access to sensitive data and information is easier; standardised data is organisation often readily available; and, usually less time and resources are needed. There may be fewer barriers to implementation as practices may be relatively easy to transfer across the same organisation. However, real innovation may be lacking and best in class performance is more likely to be found through external benchmarking. External Benchmarkin Involves analysing outside organisations g that are known to be best in class. External benchmarking provides opportunities of learning from those who are at the "leading edge".
Where examples of good practices can be found in other organisations and there is a lack of good practices within internal business units
This type of benchmarking can take up
significant time and resource to ensure the comparability of data and information, the credibility of the findings and the development of sound recommendations. International Benchmarkin Best practitioners are identified and g analysed elsewhere in the world, perhaps because there are too few benchmarking partners within the same country to produce valid results. Globalisation and advances in information technology are increasing opportunities for international projects. However, these can take more time and resources to set up and implement and the results may need careful analysis due to national differences
Where the aim is to
achieve world class status or simply because there are insufficient" national" businesses against which to benchmark.
