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BENCHMARKING a powerful management tool

I made this benchmarking presentation, when I attended a management course in Vienna at the Joint Vienna Institute. It's a general presentation about benchmarking. My purpose was to present the benchmarking tool to my course coleques. Enjoy!

Darius Bor

on 22 September 2018

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Transcript of BENCHMARKING a powerful management tool


"Improving ourselves by
learning from others"


is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries

is an improvement process that is used to identify best practice within a peer group and facilitate it's incorporation into your organization. Studying best practices provides the greatest opportunity for gaining a strategic, operational and financial advantage

is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit measure) resulting in a metric of performance that is then compared to others
Benchmarking jest procesem innowacyjnym, a nie poszukiwaniem idealnego rozwiazania
"Benchmarking is the practice of being humble enough to admit that someone esle is better at something and wise enough to try and learn how to match and even surpass them at it."
Benchmarking is time and cost efficient because it involves
imitation and adaptation rather than pure invention
Benchmarking gives us
the chance of gaining:
Better Awareness of Ourselves

What we are doing?
How we are doing?
How well we are doing?
Better Awareness of the Best

What they are doing?
How they are doing?
How well they are doing it?
Get the data and
analyse differences
Analyse current plans & performance
Complet the benchmarking audit
Identify best practice & most useful improvements
What to benchmark?
Where do comparisons matter?
Where have we tried to improve and it's not working?
Start the project
benchmarking partners
Identify organizations that are leaders in these areas
Identify other industries that have similar processes
Start improvements in practice
Involve the work group
Implement training
Link to business strategic plan
What type of benchmarking will you use?
Identify the stakeholders and staff involved
Prepare a team for research: marketing research, quantitative research, surveys, questionnaires, quality control reports, financial ratio analysis or simply reviewing cycle times
Review curent state
Identify key performance measures and your current performance level
Compare to what you know about best practice level
ID the greatest opportunities for improvement
Analyse costs, quality and outcomes of partners
Does it "translate"?
What would need to be changed?
Set new performance targets and service standards using the benchmarked data
From the alternatives, which have the best chance of working/greatest impact on key measures/most visible?
Plan communication and change management planning
Benchmarking Copying
Conditions are never identical
Benchmarking is not just making changes and improvements for the sake of making changes
Benchmarking is about adding value
Benchmarking types
Comparing performance between different groups or teams within an organization
Comparing performance with companies in a specific industry or across industries
Within these broader categories, there are 3 specific types of benchmarking
Process benchmarking
Strategic benchmarking
Performance benchmarking
The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms
Allows the initiator company to assess their competitive position by comparing products and services with those of target companies
Involves observing how other compete. This type of benchmarking is usually not industry specific, meaning it is best to look at other industries
These can be further detailed
Performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity
Financial benchmarking
A company will focus its benchmarking on a single function, to improve the operation of that particular function
Functions as a tool for improvement and innovation in public administration
State organizations invest efforts an resources to achieve quality, efficiency and effectiveness of the services they provide
Functional benchmarking
The process of designing new products or upgrades to current ones
Find strenghs and weaknesses
Product benchmarking
Embraces everything from staffing and productivity to office flow and analysis of procedures function
Operational benchmarking
Process of collecting, analysing and relating energy performance data of comparable activities with the purpose of evaluating and comparing performance between or within entities
Energy benchmarking
Benchmarking in the public sector
Easier to implement
Easier to access data
External ideas blocked
Helps to measure one's own performance
Helps to search for best practices
Takes time
Requires support
Legal/ethical issues
Industrial espionage
Commonly Benchmarked Performance Measures
Financial ratios
Productivity ratios
Customer related results
Operating results
Human resource measures
Quality measures
Market Share Data
Structural measures
Time costs
Visit costs
Database costs
Types of costs
Members of the benchmarking team will be investing time in researching problems, finding exceptional companies to study, visit and implementation
This will take them away from their regular tasks for part of each day
So additional staff might be required
This includes:
hotel rooms
travel costs
lost labor time
Organizations that institutionalize benchmarking into their daily procedures find it is useful to create and maintain a database of best practices and the companies associated with each best practice now
Benchmarking Essentials
Top management support and guidance and report to them
Aligning benchmarking with the vision and mission
Committed and creative benchmarking team
Continual analysis & reassessment
Appropriate benchmarking methodology
Conclusions must be justified by the data
A high code of ethics is essential
Internal training on benchmarking for company personnel is crucial
Lessons learned
Networking and discussing ways for improvement is very important. Create a communication platform for opinion & experience Share Point.
Learn from others experience & practices
The workshop for discussions and best practice is the most important part of the benchmarking process
Develope specific Task Groups
What is best for someone else may not suit you
Helps in unlockig your knowledge potential
Make benefit of others brains, ideas
Give benchmarking a chance -
it worth it
Assess improvements &
Implement new and improved business practices
Monitor KPI's to see if changes are impacting
Satu Mare, ROMANIA
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