Benchmarking

Prepared by: Prof. Rome Paje

Benchmarking
Best practices that will lead to superior approaches that produce performance exceptional results. Helps a company learn its strengths & weaknesses-& those of other leading organizations and incorporate the best practices into its own operations. Motivation to employees

2 Types of Benchmarking

Competitive

Generic

Benchmarking Process
1. 2. 3. 4.

5.

Determine which function to benchmark Identify KPI to measure Identify the best-in-class companies Measure the performance of the best-in-class companies & compare the results to your own performance. Define & take actions to meet or exceed the best performance

Benefits of Benchmarking
Companies who benchmark their performance report the following benefits:

Identifies specific problem areas and eliminates guesswork Builds confidence when "gut feel" assumptions are validated Helps to prioritize improvement opportunities Shifts internal thinking from "inputs" to "outputs" (i.e. measures) Serves as an excellent baseline "report card" Makes it easier to increase performance expectations and "raise the bar" Creates a sense of competitiveness and a real desire to improve Challenges people to "work smarter" instead of "working harder".

Continuation.
Companies who involve their team throughout the benchmarking process report the following benefits: Accelerates understanding and agreement on the real problem areas Educates on the latest practices being used and performance being achieved Motivates the team to work collaboratively internally to surpass external benchmarks Removes emotion from the discussion.