P r o c e s s b
e n c h m a r k i n g
Definition:
Process Benchmarking is the comparison of practices, procedures
and performance, with specially selected benchmarking partners,
studying one business process at a time.
It answers the question:
What is
the best practice in this topic, where are
the best practitioners and what can we learn from them?
Characteristics:
- Focus: a single process at a time.
- Partners: not chosen until after undertaking a thorough
analysis of your own practices and performance.
- Form of comparison: whenever possible, by actually visiting
the partners' places of business.
- Confidentiality: the identity of partners is known, and the
exchange of information is protected by a code of ethics.
Method:
- Choose a process to study:
in process
benchmarking, one process at a time is studied. If you want to
study more than one process, it is best to set up separate studies
for each process. Examples of processes we have helped
organisations to study include customer service delivery, contract
management, file processing, accounts payable, payroll processing
- the list is endless.
- Form a team: this should include representatives
of all the key stakeholders in the process being studied.
- Develop a baseline for comparison:
develop an
intimate knowledge of your own practices and performance. This
may be via flow charts, identification of problem areas,
cause-and-effect analysis etc.
- Research and select partners:
your partners
should be organisations that are non-competitors and not
necessarily in the same industry as you. They should have some
demonstrated excellence in a process analogous to the one you are
studying.
- Compare processes: via site visits or detailed
discussions, exchange information with your partners that allows
both you and each partner to gain some new ideas about how the
process is carried out, its performance results and what enables
good performance.
- Plan for change:
as a result of what you have
learnt from your partners, identify which ideas you can adopt or
adapt to improve your process, and how to implement them.
- Implement new process: put the ideas in place,
monitor their success and get ready to re-benchmark them at
specific intervals.
Advantages:
- Allows a focus on something that will make a significant
difference to organisation effectiveness.
- Allows a customer focus as well as an efficiency focus.
- Enables a detailed examination of the drivers for success and
efficiency.
- Change arising from process benchmarking is generally readily
accepted by employees and management.
- Creates opportunities for both individual and organisational
development.
Disadvantages:
- If done correctly, takes more time than you think it should
- Can use significant staff resources.
Pitfalls to Avoid:
- Rushing to compare with partners without an intimate knowledge
of your own processes.
- Picking partners for convenience rather than for excellence.
- Not allowing enough time for the methodology to work properly.
- Selecting processes that do not have sufficient potential for
improvement.
Outcomes:
- Effectively implement major improvements to the process that
was benchmarked.
- May lead to other process benchmarking studies of other
business processes.
Optional Approaches to Process
Benchmarking with
Benchmarking
PLUS:
Option 1: One-on-One
Benchmarking PLUS will work with you to help identify the best
topics to benchmark, train a team of your employees in how to
undertake process benchmarking and help you gather the baseline data
you will need in order to make comparisons with partners. We help you
research, select, approach and negotiate arrangements with
benchmarking partners, provide you with tools for gathering data from
partners, and analyse what you observe. We help you put together a
change strategy to implement the solutions you develop as a result of
the visits.
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An example from our casebook
We helped a major health insurance company to study
the Claims Processing function, working with a team of their
own employees to analyse their current processes and
practices, and then locating a number of benchmarking
partners with whom they compared data. Several important
changes to their process were implemented as a result.
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Key benefits of the One-on-One option:
You are able to leverage off the experience of the principals of
Benchmarking PLUS, to:
- Complete your benchmarking project in the shortest possible
time;
- Choose the most appropriate benchmarking partners;
- Gain the maximum possible benefits;
- Foresee and avoid any major risks of an unsuccessful project.
Option 2: Benchmarking User Groups (BUGS) "Private"
This is a development of the One-on-One option, except that it
enables you to set up several benchmarking teams to study a number of
different processes at once.
There is a choice of either bringing the teams along in lock-step
or allowing them to proceed at their own pace.
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An example from our casebook:
A large Victorian government department engaged us to
train the entire staff of the Corporate Services Division in
process benchmarking. We then worked with nineteen separate
project teams to undertake baseline process analysis and
easily identified improvements. Six of these projects then
continued on to benchmark externally with non-government organisations.
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Option 3: Benchmarking User Groups (BUGS) "Public"
Under this option, a group of teams from several different
organisations come together, to study either the same topic or
completely different topics. Over a period of eight months they meet
monthly; individual progress is discussed and the work to be
completed before the next meeting is carefully outlined. Under this
process they receive training on a "just-in-time" basis and proceed
all at the same pace.
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An example from our casebook:
We assisted a group of eight teams from different
industries (varied from manufacturing to legal services and
including both the public and private sectors) to conduct a
process benchmarking project on a topic of their choosing.
Topics studied included production planning, client
communication, employee induction, materials management and
order management.
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Key benefits of BUGS (both "private" and "public" options):
-
It is an extremely high value-for-money way of accessing the
expertise of Benchmarking PLUS.
-
You learn from the experiences of the other participating
teams.
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This option caters more easily to delivery of consulting
advice from a distance.
-
Also caters to members of industry groups, special interest
groups or regional offices of large organisations.
Related Techniques:
Process Benchmarking can be preceded by Performance Benchmarking.
It can also be preceded by a Benchmarking Strategy
establishment, or followed by a Benchmarking Strategy Review process.
