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Benchmarking
 

Benchmarking

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A benchmark is a point of reference for a measurement. Benchmarking is process of comparing one's business processes and performance metrics to industry bests or best practices from other industries. It does this by capturing performance metrics and comparing their values with a comparable set of previously recorded measures. This comparison set can be taken from a variety of sources--e.g. from within the same organization at a different times, from competitors, from similar processes within the industry. Typical dimensions measured are quality, time, and cost.

Benchmarking models are useful to determining how well an activity, process, business unit, division, or corporation is performing compared with other similar organizations. Benchmarking aims to achieve maximum effectiveness of learning from the best and helps to move the organization from its current state to desired “best practice” future state.

To be implemented successfully, there must be active engagement of management, clear objectives, and ongoing effort.

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    Benchmarking Benchmarking Presentation Transcript

    • Crowdsourced BusinessPresentation Design ServiceBenchmarkingBenchmarking Industry Best PracticesMay 21, 2013Benchmarking is process of comparing ones business processes and performancemetrics to industry bests or best practices from other industries. It does this bycapturing performance metrics and comparing their values with a comparable set ofpreviously recorded measures. This document explains the Benchmarking process,its benefits, limitations, costs, methods/frameworks, types, approach, and more.ORIGINAL PROJECT DETAILShttp://pptlab.com/ppt/Benchmarking-2
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 2PPT Lab (www.pptlab.com) is the only crowdsourcedpresentation design service. Get consulting-qualitypresentations at a fraction of the cost!Each month, we will create well over 50 slides of for our members.As a member, you will drive what business slides we create bysubmitting your own presentation projects to our team. Allpresentations will be created by a team of managementconsultants and follow the Consulting Presentation Framework.www.PPTLab.comsupport@pptlab.com
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 3Contents Overview 4 Characteristics 9 Approach 15 Appendix 18
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 4Benchmarking is tool that allows an organization to judge its performancein relation to its former self, key competitors, and the overall industryExecutive SummaryA benchmark is a point of reference for a measurement. Benchmarking is process of comparing onesbusiness processes and performance metrics to industry bests or best practices from other industries.It does this by capturing performance metrics and comparing their values with a comparable set ofpreviously recorded measures. This comparison set can be taken from a variety of sources--e.g. fromwithin the same organization at a different times, from competitors, from similar processes within theindustry. Typical dimensions measured are quality, time, and cost.Benchmarking models are useful to determining how well anactivity, process, business unit, division, or corporation isperforming compared with other similar organizations.Benchmarking aims to achieve maximum effectiveness oflearning from the best and helps to move the organization fromits current state to desired “best practice” future state.To be implemented successfully, there must be activeengagement of management, clear objectives, and ongoing effort.Benchmarks represent what best practices should be.The term "benchmark" presumablyoriginates from the practice ofmaking dimensional heightmeasurements of an object on aworkbench using a gradual scale orsimilar tool—and then using thesurface of the workbench as theorigin for the measurements.THIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 5Benchmarking allows us to evaluate ourselves and our competition“If you know the enemy and know yourself, you neednot fear the results of a hundred battles.”– Sun Tsu, The Art of WarTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 6There are 10 types of benchmarking that are commonly performed10 Types of BenchmarkingInternalBenchmarkingCompetitiveBenchmarkingFunctionalBenchmarkingGenericBenchmarkingCollaborativeBenchmarking• Benchmarking within anorganization—e.g.among different businessunits—coveringeverything from staffingand productivity to officeflow and analysis ofprocedures performed• Benchmarkingperformance orprocesses againstcompetitors• Benchmarking similarprocesses within anindustry—complexfunctions (e.g. HR,Finance, IT) are unlikelyto be directly comparableand may need to bedisaggregated• Comparing operationsbetween unrelatedindustries• Benchmarking carriedout collaboratively bygroups of companies—e.g. among subsidiariesof a multi-national indifferent countries or andindustry organization1 2 3 4 5FinancialBenchmarkingPerformanceBenchmarkingStrategicBenchmarkingProductBenchmarkingInvestor-basedBenchmarking6 7 8 9 10• Performing a financialanalysis and comparingthe results in an effort toassess your overallcompetitiveness andproductivity• Allows the initiator firm toassess their competitiveposition by comparingproducts and serviceswith those of target firms• This involves observinghow others compete.This type is usually notindustry specific,meaning it is best to lookat other industries• The process of designingnew products orupgrades to current ones—can sometimes involvereverse engineering tofind strengths andweaknesses• This extends thebenchmarking to alsocompare to peercompanies that can beconsidered alternativeinvestment opportunitiesfrom the perspective ofan investorTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 7Benchmarking, if done correctly, provides numerous benefits andadvantages that span both strategic and operational gainsBenefits and Advantages Can be leveraged to determine the optimal price per unit of your product or service Results can be used to improve organization strategy Can inform us about the status of long term goals Supports decision making Measures customer satisfaction and loyalty Supports budgeting decisions Ranks your organization in the market (typically operationally)It’ll highlight what processes we can improveon and where our competencies areTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 8Benchmarking also has many limitations that we should be mindful ofLimitations Benchmarking is a tough process that needs a lot of commitment to succeed Time-consuming and expensive Benchmarking projects often end with they-are-different-from-us syndrome or competitivesensitivity that prevents free flow of information that is necessary Comparing performances and processes with “best in class” isimportant and should ideally be done on a continuous basis Sanity Check: Is the success of the target company really attributable to the practice thatis benchmarked? Are the companies really comparable in strategy, size, model, culture? Sanity Check: What are the downsides of adopting a practice?More on costson the next slideRemember! The competition isimproving its processes tooTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 9C.K. Prahalad argues that organizations should look for Next Practices, andnot be focused on Best PracticesBest Practice vs. Next PracticeBenchmarks provide guidance to what best practices are. Business strategist C.K. Prahaladargues that best practices can only take a company so far. They allow businesses to catch up tocompetitors, but not become the market leader. To gain the leadership position, an organizationmust look for next practices.To find next practices, C.K. Prahalad recommends addressing 6 key questions:Is the problem widely recognized?Does it affect other industries?Are radical innovations needed?123Can a next practice impact the economics ofthe industry?Can a next practice be a source ofcompetitive advantage?Can a next practice create a big opportunityfor the firm?456Source: Best Practices Get You Only So Far, HBR, PrahaladTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 10The benchmarking process follows an 8 phase approachApproach (8 Phase)Benchmarking is an exercise that should be repeated and re-validated onan ongoing basis.ScopeDefinitionPartnerSelectionMethodsDetermin-ationDataCollectionDiscrep-ancyAnalysisResults andDiscussionImprove-ment PlanMonitoringand NextSteps• Define thescope of thebenchmarkingexercise• Selectbenchmarkpartner(s)• Determinemeasurementmethods, units,indicators, anddata collectionmethod• Collect thebenchmarkingdata• Analyze anydiscrepancies• Present theresults anddiscussimplications,areas ofimprovement,and goals• Makeimprovementplans on newprocedures• Monitorprogress anddevelop planfor ongoingbenchmarkingTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 11Here is an alternate 12 phase approachApproach (12 Phase)Benchmarking is an exercise that should be repeated and re-validated onan ongoing basis.Source: TThe Search for Industry Best Practices That Lead to Superior Performance, CampSelectSubjectDefine theProcessIdentifyPotentialPartnersIdentifyDataSourcesCollect Dataand SelectPartnersDeterminethe GapTargetFuturePerform-anceCommuni-catAdjust Goal ImplementReview andCalibrateEstablishProcessDifferencesTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 12Here is a list of software that can be used for benchmarkingBenchmarking SoftwareSOFTWARE NAME PUBLISHER TYPE DETAILSComboBenchmarkCompare toCompete OnlineBenchmarkingWeb-baseddatabase This web-based database is suitable for groups ofcompetitors to benchmark individual performanceagainst group performance All process and performance benchmarks can beprocessed in this software, providing interesting analysistools and complete benchmarking reportGOBENCHINDEC GmbH &Co. KGWeb-baseddatabase The web-based database supports different kinds ofbenchmarking categories (product, process, competitor,customer, reverse engineering, marketing, patents,technologies, innovations, etc.) It is a very powerful analysis toolMicrosoftExcelExcel Desktopspreadsheetsoftware Excel is your standard spreadsheet software and isoften used for smaller projects Benchmarking data can be captured, stored,manipulated, and analyzed within ExcelTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 13Below is a list of commonly used benchmarking methods and frameworks,each having different analytical focusBenchmarking Methodologies / Related Frameworks Matrix Technology Comparison Tables Graphs (e.g. pie chart, bar chart, waterfall, etc.) SWOT Analysis Potential/Resources Analysis Price/Performance Ratio Potential Analysis Life Cycle Analysis Market Growth/Share Portfolio Market Attractiveness/Competitive StrengthPortfolio Portfolio Attractiveness CustomerTechnology/Resource strengthMarket Position/Technology Position PortfolioContribution Margin/Cost Development PortfolioCustomer Satisfaction PortfolioRevenue Share/Revenue PortfolioSpider Web DiagramSupplier PositionTHIS IS A PARTIAL PREVIEWYou can download the full document at http://PPTLab.com.PPT Lab is a crowdsourced presentation design service.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 14PPT Lab (www.pptlab.com) is the only crowdsourcedpresentation design service. Get consulting-qualitypresentations at a fraction of the cost!Each month, we will create well over 50 slides of for our members.As a member, you will drive what business slides we create bysubmitting your own presentation projects to our team. Allpresentations will be created by a team of managementconsultants and follow the Consulting Presentation Framework.www.PPTLab.comsupport@pptlab.com