Benchmarking - Maybe It's Not What You Think It Is!
Many people think that Benchmarking is an assessment against a maturity model; but it is much more powerful than that.
By ROBERT BEVERTON
What comes to mind when you hear the term ‘Benchmarking’?
Many organizations benchmark their IT processes against industry averages or maturity models; but this is not the same as employing Benchmarking as an improvement technique. Whilst both are forms of assessment, the goals, approach, and benefits are quite different. Process benchmarking is simpler and usually narrower in scope, effort and benefit when compared to Benchmarking as an improvement technique.
The latter has been in use for about 40 years. Although Armand Feigenbaum originally proposed the idea in his book Total Quality Control, [1] an example that is often referenced is that of Xerox Corporation. Robert Camp, who led Benchmarking at Xerox, described it as the search for industry best practices that lead to superior performance“ [2]. In the seventies, Xerox started to use Benchmarking, achieving positive results using an approach based on W. Edward Deming’s Plan, Do, Check, Act cycle[1]
“One of the key benefits from Benchmarking is the opportunity for process improvement breakthroughs . . . . . that can significantly improve the performance of an organization”
The primary feature of Benchmarking is that it focuses on another company with superior performance whether it be a competitor or a completely different industry, studying what it does, and gathering ideas for improving one’s own operation. This is usually done in cooperation with the subject organization.
One of its key benefits is the opportunity for process improvement breakthroughs, (as originally discussed by Joseph Juran), that can significantly improve the performance of an organization, [3]. The approach enables an organization to break out of constraints in its current thinking by looking at what makes other organizations successful in a particular area [1] [4].
Contrary to the benchmarking process mentioned at the outset, focussing on quantitative measures and how they are reached is not as important as learning from how things are done. It is about understanding why the benchmark organization is successful and applying these lessons, rather than just mimicking success [1].
“focussing on quantitative measures and how they are reached is not as important as learning from how things are done,“
However, even though Benchmarking appears to be a successful approach to process improvement [5], there are quality issues to consider when contemplating its use. It is important that those involved in a Benchmarking exercise be trained in the approach or have supporting advice from someone who is [3] , especially in view of the variety of Benchmarking approaches that are in use [5].
When looking at benchmark measures it is important to understand how they are derived, to ensure compatibility with the Benchmarking exercise [4]. For example they may show averages not the best [6], or arrived at with different calculations, such as with First Call versus First Contact resolution on the service desk.
Also, they can be influenced by other processes, e.g. First call/Contact resolution measures can be reduced by effective Problem management and increased by auto resolution from Event Management.
Approached with good preparation and planning, using appropriate and adequately trained resources Benchmarking can lead to making significant improvements in an organization’s processes. This is valuable in today’s environment of disruptive innovation where companies need to rethink how they deliver their products so as to maintain competitive advantage.
References List:
[1] Bhutta, K.; Huq, F. (1999) Benchmarking – best practices: an integrated approach. Benchmarking: An International Journal, 6(3) pp.254-268
[2] Camp, R., & American Society for Quality Control. (1989). Benchmarking : The search for industry best practices that lead to superior performance. Madison, Wis.: ASCQ Quality.
[3] Foster, S.T. (2013) Managing Quality Integrating the Supply Chain. 5th Ed. Harlow: Pearson Education Ltd.
[4] Office of Government Commerce (OGC). (2011). Continual service improvement. 2nd Ed., London: TSO
[5] Adebanjo, A.; Abbas, A.; Mann, R. (2010) An Investigation of the adoption and implementation of benchmarking. International Journal of Operations & Production Management, 30(11) pp.1140-1169.
[6] Brooks, J.M.; Bandopadhyay, T; Naegle, R.; Matchett, C. (2014) Don’t Settle for Average When Benchmarking IT. Gartner