Benchmarking

Presented by: Darya Balyasnikova

What is Benchmarking?

• Comparative method for firms based on best practices in the industry

• Reference point used in order to bring superior results

Benchmarking Targets

• Prime competitors– Benefit: high level of granularity– Possible drawback: competitors not willing to share their

best practices

Benchmarking Targets (cont.)

• The organization itself– Division to division– Spread by training– Benefits:

• Cost effective• Easy to get information

– Drawback:• May miss the bigger

picture

Benchmarking Targets (cont.)

• Best in Industry– Finding industry leader and learning what they

do that is so much better than you– Getting close to the competitor and learning

from them– Drawback: competition for information

Benchmarking Targets (cont.)

• World Class– Comparing against the best in the world– Drawback: very high competition for information

Types

• Performance Benchmarking– Comparison of one’s own performance with

another organization’s performance• Involves comparing products and services with other

firms

Types (cont.)

• Best Practice Benchmarking– Observation and investigation of business

processes• Benchmarks cost and efficiency

Types (cont.)

• Strategic Benchmarking– Compares long-term decisions and actions

• Functional Benchmarking– Compares functions regardless of the industry

Types (cont.)

• Financial Benchmarking– Examines overall competitiveness

• Generic Benchmarking– Comparison against best practices in any type of

organization

Types of Benchmarking (cont.)

• Product Benchmarking– Leads to designing new products/upgrades to

existent products– May involve reverse engineering

• Xerox Corporation

The Benchmarking Process: Planning

• Identify what is to be benchmarked

• Identify comparative companies

• Determine data collection method

• Collect data

The Benchmarking Process: Analysis

• Determine current performance gaps

• Project future performance levels

The Benchmarking Process: Integration

• Communicate benchmark findings and gain acceptance

• Establish functional goals

The Benchmarking Process: Action

• Develop action plans

• Implement specific actions and monitor and report progress

The Benchmarking Process: Maturity

• Leadership position attained

• Practices fully integrated into processes

Cost of Benchmarking

• Moderately expensive process:– Travel costs– Time costs– Database costs

Some Stats

• Global Benchmarking Network survey (2008)– 450 organizations from over 40 countries

– 77% used mission and vision statements/customer surveys

– 72% used SWOT analysis

– 68% used Informal Benchmarking

– 49% used Performance Benchmarking

– 39% used Best Practice Benchmarking

Advantages

• Minimizes costs• Saves time• Initiates formulation of strategic goals and

objectives• Facilitates organizational learning• Forces organization to think “outside the box”• Brings improvement in critical areas

Top Benchmarking Companies of 2011

• APQC• HCL Expense Management• Alpine Access• TechCaliber Consulting• BPA International• AOTMP• PSS Product Support Solutions• A1 Electronics Inc.• DEVEO

Conclusion

• Benchmarking = good learning opportunity– Stimulates creativity– Stretches cognitive abilities

• Possibilities of bringing about useful changes

• “Seeing is believing”

Thank You

• Presented by:– Darya Balyasnikova

• DEM Program at UTM• CCT355• November 21, 2011

• Questions?– E-mail me:

• darya.ova@gmail.com