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Introduction to Benchmarking
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What is Benchmarking

• Benchmarking is an improvement process

that is used to identify best practice within
a peer group and facilitate it’s
incorporation into your organization
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Why best practice

• Best practice refers to techniques,

methods or processes that are more
effective at delivering a desired outcome.
• Incorporating best practice into your
organization can lead to greater efficiency
and effectiveness and a happier customer.
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Benefits of Benchmarking
• Benchmarking helps identify the gaps between
the organization that is undertaking the
benchmarking assessment and best practice.
• Undertaking benchmarking can lead to
improvements being incorporated into processes
and systems delivering gains in efficiency and
effectiveness
• Benchmarking can help align improvement
activity with strategic goals and objectives
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The Benchmarking process

• Benchmarking has a defined process
1. Identify the process that will be benchmarked – consider what
metrics will be measured
2. Measure results in own organization
3. Identify a benchmarking partner (look for one with favourable
results or to the metric being measured or known best practice)
4. Measure the process
5. Analyze the conditions that determine the favourable results
6. Determine an action plan to take your organization to the
favourable results
7. Review Benchmarking results and conduct regular reviews
with your peer(s).
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Problems with Benchmarking

• Problems with benchmarking occur where
– Data is not obtained for the process being measured
– and analysis becomes subjective
– No peer group/best practice identified (including data
available)
– The gap between current state and best practice is
captured but nothing is done about it
– Assumed best practice isn't best practice
– Benchmarking happens as a one off event and not
reviewed periodically
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The importance of data

• In order to measure the gap between the
measuring organization and best practice
quantifiable measures need to be taken
• This requires data
• Unless this method is followed results can
be subjective and inaccurate
• Follow on improvement activity can have
negligible impact
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Using your Peer-group

• Benchmarking relies on a partner organization or
“peers” which will be measured against.
• Peers could be a different group in the same
organization (e.g two purchasing departments in
a multinational organization) or a completely
separate company
• The importance is measuring your performance
against another “peer” with a different standard
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Benchmarking doesn’t stop

• Benchmarking should be viewed as a

continuous improvement method
• Regular reviews of performance should be
taken especially if improvement activity is
underway to transition to “best practice”
• Regular reviews of the peer group should
be taken to cater for any
changes/improvement made
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Further resources

• For more information try these web

resources
– http://www.ogc.gov.uk/documentation_and_te
mplates_benchmarking.asp
– http://www.ebenchmarking.com/
– http://www.nhsbenchmarking.nhs.uk/
– http://www.berr.gov.uk/dius/innovation/bench
marking-innovation/index.html