BENCHMARKING

Avoid
reinventing
the wheel
Strategy Comes First
“Would you please tell me
which way I ought to go
from here?”
“That depends a good deal
on where you want to get
to.”
“I really don’t know,” replied
Alice
“Then it doesn’t matter
which way you go,” said
the cat.
 Lessons learnt in the Real World
 If you’re not going to take action based on the
results, don’t measure it!
 “Don’t measure what you won’t change.”
 Key questions that must be asked and
answered
 Will I change my behavior, or ask my people to
change their behaviors, based on this measure?
 Does the potential benefit to be gained from this
information exceed the cost of obtaining it?
 Build from key components up to the overall
process measures, but know where you are
going before you begin.
WHAT IS BENCHMARKING

What is our What are others’

performance level? performance levels?
How do we do it? How did they get there?

Creative
adaptation

BRAKTHROUGH
PERFORMANCE
 WHAT IS BENCHMARKING
 Tool for continuous improvement

 Systematic search for best

practices

 Not a panacea that can replace all

other quality efforts
Benchmarking Defined
Benchmarking is systematic and
continuous improvement process: a
process of continuously measuring and
comparing an organization’s business
processes against process leaders
anywhere in the world to gain
information which will help the
organization to take action to improve
its performance.
RESONS TO BENCHMARK
 Promotes superior performance
 Provides an organized framework
 Inspires managers to compete
 Hard to argue that an objective is
impossible when others can do it
 Efforts Are Saved As A Readymade Model Is
Available
 Benchmarking Enhances Innovation
 Work hours Are Saved
Varieties of Benchmarking
 Internal Benchmarking
 External Benchmarking
 Competitive Benchmarking
 Industry Benchmarking
 Generic benchmarking
 Process benchmarking
 Performance Benchmarking
 Strategic Benchmarking
Process of Benchmarking

 What should WE benchmark?

 Whom should WE benchmark?

 How do WE perform the process?

 How do THEY perform the process?

 Output, Results, Success Factor

Who/What is
Benchmark
BEST?
WHAT?
Data Collection

US Data Analysis THEM

Data Collection

How do How do THEY

WE do it? do it?

Processes, practices, Methods

 PROCESS
 Decide What To Benchmark

 Understand Current Performance

 Plan

 Study Others

 Learn From The Data

 Use The Findings

 DECIDING WHAT TO BENCHMARK
 Virtually to any business process

 Critical success factor

 Which processes are causing the most

trouble ?

 Which processes contribute the most to

customer satisfaction ?
 DECIDING WHAT TO BENCHMARK
 What are the competitive pressures
impacting the organization the most ?
 Which are not performing upto expectation?
 What processes or functions have the most
potential for differentiating our organization
from the competition?
Xerox's Benchmarking Process Steps
 1. Identify what is to be benchmarked
PLANNING 2. Identify comparative companies
3. Determine data collection method
and collect data

4. Determine current performance ‘GAP’

ANALYSIS 5. Project future performance levels

6. Communicate benchmark, findings

INTEGRATION and gain acceptance
7. Establish functional goals

8. Develop action plans

ACTION 9. Implement Specific action and
monitor progress
10. Recalibrate benchmarks

MATURITY • Leadership position attained

• Best practices fully integrated into process
 Integrated Approach to Benchmarking

 EFQM Business Excellence Model

 Balanced Scorecard
 Service Quality Framework (Servqual)
 Gap Analysis Techniques
 Quality Function Deployment
 European Foundation for Quality
Management (EFQM) Model

 Principle:
“Customer satisfaction, people
(employee) satisfaction and impact on
society are achieved through leadership
driving policy and strategy, people
management, resources and processes,
leading ultimately to excellence in
business results.”
 90 pts 90 pts

100 pts 140 pts 150 pts

80 pts 200 pts

90 pts 60 pts

500 points 500 points

 BALANCED SCOREBOARD
 Emerged from ‘Measuring Performance in
the Organization of the future’ conducted in
1990s
 Provides answers to four basic questions
 How do customers see us?
 What must we excel at?
 Can we continue to improve and create
value?
 How do we look at shareholders?
 Gap Analysis

a rk
hm
nc
Be
Performance

X
n y
pa
o m
C

Time
 Shareholder performance
Gap

SPIDER WEB
Employee Customer
Performance MULTI-CRITERIA
performance
Gap GAP ANALYSIS Gap

Community performance
Gap
DRAWBACKS
 Moving Target

 Technology

 Innovation Neglected