WHAT IS BENCHMARKING

Benchmarking is defined as the process of measuring products, services, and processes against those of organizations known to be leaders in one or more aspects of their operations. Benchmarking provides necessary insights to help you understand how your organization compares with similar organizations, even if they are in a different business or have a different group of customers.

Benchmarking can also help organizations identify areas, systems, or processes for improvements—either incremental (continuous) improvements or dramatic (business process re-engineering) improvements.

Incremental Quality Improvement vs Benchmarking Breakthroughs

Benchmarking has been classified into two distinct categories: technical and competitive. The House of Quality matrix and Gantt charts are often used to plot the benchmarking evaluation.

• Technical benchmarking
• Competitive benchmarking
• Benchmarking procedure
• Benchmarking example
• Benchmarking studies
• Benchmarking resources

TECHNICAL BENCHMARKING

Technical benchmarking is performed by design staff to determine the capabilities of products or services, especially in comparison to the products or services of leading competitors. For example, on a scale of one to four, four being best, how do designers rank the properties of your organization’s products or services? If you cannot obtain hard data, the design efforts may be insufficient, and products or services may be inadequate to be competitive.

COMPETITIVE BENCHMARKING

Competitive benchmarking compares how well (or poorly) an organization is doing with respect to the leading competition, especially with respect to critically important attributes, functions, or values associated with the organization’s products or services. For example, on a scale of one to four, four being best, how do customers rank your organization’s products or services compared to those of the leading competition? If you cannot obtain hard data, marketing efforts may be misdirected and design efforts misguided.

BENCHMARKING PROCEDURE

Considerations

• Before an organization can achieve the full benefits of benchmarking, its own processes must be clearly understood and under control.
• Benchmarking studies require significant investments of manpower and time, so management must champion the process all the way through, including being ready and willing to make changes based on what is learned.
• Too broad a scope dooms the project to failure. A subject that is not critical to the organization’s success won’t return enough benefits to make the study worthwhile.
• Inadequate resources can also doom a benchmarking study by underestimating the effort involved or inadequate planning. The better you prepare, the more efficient your study will be.

Plan

1. Define a tightly focused subject of the benchmarking study. Choose an issue critical to the organization’s success.
2. Form a cross-functional team. During Step 1 and 2, management’s goals and support for the study must be firmly established.
3. Study your own process. Know how the work is done and measurements of the output.
4. Identify partner organizations that may have best practices.

Collect

1. Collect information directly from partner organizations. Collect both process descriptions and numeric data, using questionnaires, telephone interviews, and/or site visits.

Analyze

1. Compare the collected data, both numeric and descriptive.
2. Determine gaps between your performance measurements and those of your partners.
3. Determine the differences in practices that cause the gaps.

Adapt

1. Develop goals for your organization’s process.
2. Develop action plans to achieve those goals.
3. Implement and monitor plans.

BENCHMARKING EXAMPLE

Carleton University’s department of housing began a project to improve the process by which students apply for and are assigned housing. This project had three main goals:

1. Reduce residence vacancy rates to below 1%
2. Improve student satisfaction levels
3. Make the best possible use of employee time and effort

The department chose benchmarking as the basis for the improvement project after realizing that other universities already had better processes Carleton could learn from and quickly implement without needing to re-engineer the process from scratch.

The cross-functional team started by mapping the existing residence application process to establish a baseline, focusing attention on the process used by new first-year students (left side, Figure 1).

Figure 1: Main Process Steps Before and After Benchmarking

The project team then conducted focus groups with students living in residence, asking them to describe their expectations of the assignment service process, their perceptions of the services they actually received, and any gaps between the two.

The team also reviewed websites of housing offices at 24 international universities, followed by a telephone survey of 12 of these to find out more about their systems. The team then conducted site visits to four universities seen as leaders in dealing with residence applications to learn about their current processes and discuss the relative advantages and disadvantages of each one.

The team presented its benchmarking report to management, describing the best practices seen at other universities and making specific recommendations for adapting them for Carleton (right side, Figure 1). Carleton implemented many of the recommended changes and is seeing the benefits (Figure 2).

Figure 2: Benchmarking Average Vacancy Rates for Residences

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