Benchmarking

Benchmarking By:-CHETAN KUMAR

BENCHMARKINGThe continuous process of measuring products, services, and practices against the companys toughest competitors or those companies renowned as industry leaders Objectives: Establish credible goalsContinuous improvementBenefit of Benchmarking:Achieve performance levels that fully satisfy these ever-increasing customer expectations

How Benchmarking is doneEstablish that there is a need for changeIdentifying gaps between the organization and the competitionIdentify what should be changedUnderstand how industry leaders do thingsCreate a picture of how the organization should look after the changeShowing what is possible and what other companies have done

BENCHMARKING FUNDAMENTALS:Know the operationKnow the industry leaders and competitorsIncorporate the best and gain superiority

PHASES OF THE 10-STEP BENCHMARKING PROCESS

Phase 1: PLANNINGDecide what to benchmarkProduct/outputPriority candidates to benchmark to improve performanceIdentify whom to benchmarkPlan the investigation and conduct itCollect data sources and observe best practices

Phase 2: ANALYSISUnderstanding internal business processesExamine best practices of other org.Measure the gapProject future performance

Phase 3: INTEGRATIONRedefine goals and incorporate them Communicate benchmarking finding and gain acceptance Target and strategy should be updated

Phase 4: ACTIONBest practices are implementedPeriodically recalibrate Monitor progress

Phase 5: MATURITYDetermine when leadership position is attainedStandard part Performance levels improving

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 1: What to benchmarkIdentify product/output Develop a clear mission statement The broad functions are broken down into specific outputsSpecific outputs are documented in detail for comparison

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Identifying leading competitors which possess the best practicesInternal BenchmarkingComparison of practices among similar operations within a firmBenefit: Force documentation and allows easy comparisonCompetitive BenchmarkingComparison to the best direct competitorsWays: Public Domain, Direct Benchmarking Exchange & Joint study by 3rd partyFunctional BenchmarkingComparison of functional activities even in dissimilar industries

Step 2: Whom to benchmark

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Information Sources:InternalSearch of everything published on the topic during the last 5 years in a public domainExternalInformation from professionals, seminars, lectures etc.OriginalContact Benchmarking partners directly and collect information using questionnaires

Step 3A: Collect Data

Step 3B: Conduct site visitOutside consultant can be used (little organizational learning and little ownership in findings)Rule of thumb: 70/30; 70% studies done internally, 30% done externally

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Analyse information collectedIndentify gaps and performanceMeasure of superiority

Step 4: Analyse the performance gap

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 5: Project Performance LevelsDecide improvements : Projections in (i)Current process (ii)After benchmarking

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Decide who needs to know Select best presentation vehicleOrganize findingsPresent recommendations

Step 6: Communicate Findings

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 7: Establish Functional GoalsRevise goals Impact on othersManagement approval

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 8: Develop action planSet implementation prioritiesShow revisions to performance gapDevelop action plans

Step 8: Develop action plan

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 9: Implement Plan and monitor resultsBest practicesPilot best practice before implementationEfficiency measures

STEP 1: WHAT TO BENCHMARKSTEP 3A: COLLECT DATASTEP 3B: CONDUCT SITE VISITSTEP 4: ANALYSE THE PERFORMANCE GAPSTEP 5: PROJECT PERFORMANCE LEVELSSTEP 6: COMMUNICATE FINDINGSSTEP 7: ESTABLISH FUNCTIONAL GOALSSTEP 8: DEVELOP ACTION PLANSTEP 9: IMPLEMENT PLAN & MONITOR RESULTSSTEP 10: RECALIBRATE BENCHMARKSSTEP 2: WHOM TO BENCHMARK

Step 10: Recalibrate BenchmarksBenchmarks must be planned and recalibratedComplete reassessment (1-3 years)Step 10: Recalibrate Benchmarks

Conclusion Behavioral benefitsLearning experienceFocus for consensus on needsStimulus for improvementCompetitiveness Improved competitivenessIncreased value in the eye of customersSuperior customer service levelsIncreased market shareImproved financial results

Thank You!!