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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 its 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 doesnt 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_templa http://www.ebenchmarking.com/ http://www.nhsbenchmarking.nhs.uk/ http://www.berr.gov.uk/dius/innovation/bench marking-innovation/index.html