Benchmarking can be used as a highly effective tool for improving performance.  It can be used as either a tool in itself, or as an element of a business process re-engineering project.

What is Benchmarking?

The approach to benchmarking is based on the following definition:

Benchmarking is the process of identifying, understanding and adapting outstanding practices and processes from organisations anywhere in the world in order to help your own organisation improve its performance.

A more 'user-friendly' definition is as follows:

Benchmarking is the practice of being humble enough to admit that someone else is (maybe?) better at something, and wise enough to try and learn how to match and even surpass them.

Types of Benchmarking

We can assist you to maximise the benefit using the four types of benchmarking below:

1) Internal Benchmarking

This type of benchmarking is used when an organisation searches for best practice within its own boundaries.  When best practices are identified, each department or location is encouraged to adapt it to their own environment and bring their performance up to the level of the internal benchmark, thereby raising the performance of the organisation as a whole.

Internal benchmarking has the advantage that the data is easier to collect because there are fewer barriers to the open sharing of information. It is particularly appropriate where a number of sites within an organisation do similar work.

Explorative Benchmarking

Explorative benchmarking is used to compare the performance of an organisation with other competitive and non-competitive organisations. This can be done both at organisational and functional level. Typically, the search for benchmarking partners is achieved via personal networking, and/or brainstorming the names of, and approaching ‘familiar’ companies. Explorative benchmarking has the advantage that data is easier to collect because the benchmarking partner typically is part of a personal network recommended by someone within the organisation.  It is also less time consuming. The main drawback is that the level of performance of the ‘familiar’ companies determines the level of the excellence of the results.  The approach used, being simple, is not as systematic as the next types of benchmarking and therefore the level of benefit and learning obtained is somewhat restricted.

Comparative Benchmarking

Comparative benchmarking is used to compare the performance of an organisation with other competitive and non-competitive organisations.  This can be done both at organisational and functional level.  In either case, a set of appropriate measures is agreed, and current performance is measured.  This is then compared with other organisations either by searching and analysing information in the public domain, or by requesting information from the organisation itself.  Comparative benchmarking enables an organisation to position itself within its industry of function, and assess potential for improved performance.  Examples of comparative benchmarking include the use of the EFQM Excellence Model for self-assessment, and the Best Value and Quality Services initiatives.

Best Practice Benchmarking

Best Practice Benchmarking is used to identify and learn from best practices in other organisations using similar processes but achieving superior performance. This requires firstly a thorough understanding of your current process and its performance, and secondly an ability to identify the enablers to outstanding performance in the benchmark process. These are then adapted with the benefit of your own process knowledge. Best Practice Benchmarking requires more effort and resource than internal and comparative benchmarking, but enables potentially much greater improvement in performance.  

Overview of Approach:

The approach is based on the Deming Plan-Do-Check-Act cycle with an additional element for Review. This is adapted as described in the diagram overleaf, and detailed in the Institute of Management book 'Understanding Benchmarking in a Week', co-written by Steve Tanner, Director of Oakland Consulting Plc.  Adherence to this systematic approach ensures that the process of change is managed effectively, and delivers the full potential benefit to the organisation.

The Benefits of benchmarking

Benchmarking can be used as a highly effective tool for improving performance. It can be used either as a tool in itself, or as an element of a Business Process Re-engineering project. Either way:

·          It develops realistic stretch goals
·          It establishes realistic action plans
·          It encourages a striving for excellence and innovation
·          It creates a better understanding of your current position
·          It underpins the drive for performance improvement

The Benchmarking Roadmap

The diagram below illustrates the roles and involvement of staff throughout the benchmarking project.

The ‘Trigger for Change’ normally comes either form external stakeholders such as government ministers, customers, or from the executive champions for change. It is vital that the Executive Champions have an understanding of the objectives and resource requirements of the project, and the benchmarking approach to be used. They can then provide sustained support for the benchmarking team throughout the duration of the project. The trigger for change will normally identify the process to be benchmarked, and the process owner or sponsor is responsible for the management and improvement of the process. Other roles are defined according to the scope and duration of the benchmarking project, and the Roadmap illustrates their involvement in the 5-phase approach.