BENCHMARKING What’s it? Process that compares business activities and processes with those of similar organisations . Identifies opportunities Doesn’t tell what to do about them BUT
BENCHMARKING What’s it for? Provides information to help companies and organisations improve their : COMPETITIVENESS EFFICIENCY PROFITABILITY
BENCHMARKING How? Compares processes and activities Questions what your business are doing Underline opportunities for improvement AND
BENCHMARKING T Y P E S KEY PERFORMACE INDICATORS COSTS PROCESSES STRATEGIES Comparing costs , such as salaries, it’s possible to identify opportunities for savings Focussed on productivity and efficiency Compare indicators such as Gross margin, wastage levels Compare technologies or production techniques and provide ideas to apply in the business Strategic objectives, resources or Standards of successful organisation that can be incorporate in the business
BENCHMARKING APLICATION 4 STEPS Plan in detail the Benchmarking process Analyse the processes of others Compare own performance with that others analysed Implement the steps necessary to close the gap
BENCHMARKING APLICATION 4 STEPS PLANNING ANALYSIS COMPARATION IMPLEMENT Who will carry out this process? Which is the objective for the company? Who will be the benchmarking partners ? What information will be analysed? Where you differ from the competence? Why ? What actions to take? How is the business performance after changes?
BENCHMARKING OBJECTIVES * Link the benchmarking process with the company objectives. *Focus on the key areas of the business. *Establish the key performance measures. *Select the most adequate employees to carry out this process. *Teams of almost 6 people. *Provide the training that people need to understand the process. PROJECT TEAM 1 st . Step: PLANNING
BENCHMARKING PARTNERS * Internal ; best performers departments of the own company. * External : companies of similar size, structure and objectives. * Outstanding Business : if the environment is very different can be difficult to compare. * Individual partners :for example, leaders in the area the firm is benchmarking * What information?: Costs, process, strategies, etc. * How collect information: approaching the partners, on the internent, etc. INFORMATION 2 nd . Step: ANALYSIS
BENCHMARKING DIFFERENCES * Understand own processes : the business environment and the management structure and style have a great importance in the business performance * Summarise the points where your strategy, process, costs, ect. differ from the benchmarking partners *Establish why there are these differences : -Poor cost control. -Outdated processes or systems. -Different target Market. -Organisational Constrains. -Etc. REASONS 3rd. Step: COMPARATION
BENCHMARKING ACTIONS * Do nothing . * Adapt processes and systems * Notice areas for improvement and further investigation. * Redefine strategic elements *Etc. 4th. Step: IMPLEMENT REVIEW *What impact the changes had in the business performance *The process achieved its objectives. * Regular benchmarking is essential to keep up to date and ahead of the competition.