Chuck Wise writes a white paper for Accenture pinpointing what benchmarking is, why it matters, and the best way to implement it. This is your one-stop shopping for getting benchmarking up and running at your organization today, so get your shopping list ready.
Four Major Benefits
Benchmarking, while typically done externally, can also be applied internally to see how analogous business processes compare across similar or completely disparate disciplines. And according to Wise, it yields four major benefits:
- A fact-based, more defensible understanding of a function’s cost and/or performance drivers
- Provides a strong foundation for transformation programs
- Provides a basis for continuous improvement
- Provides a language for key aspects of business processes
Four Steps to Reaping Those Benefits
- Plan, mobilize, and kick-off.
- Gather and validate data.
- Perform quantitative assessment.
- Analyze results and identify recommendations.
Starting out, you need to formally define the scope, desired metrics to evaluate, and relevant data sources of your benchmarking initiative. This includes finding and/or training people to do the actual data collection. Wise explains what to do with that data:
When data collection is completed, the company produces a preliminary benchmark comparison with the peer group, validates the data, and if necessary corrects any inaccuracies. Also during this time, the company should schedule the executive interviews that will form the basis of the qualitative assessment to come. While the second phase of the project typically lasts between one and four weeks, it also is the most common source of delays in benchmarking projects.
The qualitative assessment begat by the executive meetings will better enable you to compare performance between your processes and the peer group best practices. When this is completed, you will finally be able to review cost and performance gaps uncovered and provide recommendations on how to smooth out the rough edges.
For more insights, as well as applicable case studies, you can read the full white paper here: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Achieving_High_Performance_The_Value_of_Benchmarking.pdf