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Benchmarking Primer
 

Benchmarking Primer

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/benchmarking-primer-219

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 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.

This document explains the Benchmarking process, its benefits, limitations, costs, methods/frameworks, types, approach, and more.

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 Primer Benchmarking Primer Presentation Transcript

    • Crowdsourced Business Presentation Design Service Benchmarking Benchmarking Industry Best Practices May 21, 2013 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 document explains the Benchmarking process, its benefits, limitations, costs, methods/frameworks, types, approach, and more. ORIGINAL PROJECT DETAILS http://pptlab.com/ppt/Benchmarking-2
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 3 Contents  Overview 4  Characteristics 9  Approach 15  Appendix 18
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 5 Benchmarking is tool that allows an organization to judge its performance in relation to its former self, key competitors, and the overall industry Executive Summary 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. Benchmarks represent what best practices should be. The term "benchmark" presumably originates from the practice of making dimensional height measurements of an object on a workbench using a gradual scale or similar tool—and then using the surface of the workbench as the origin for the measurements.
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 7 There are 5 main situations when benchmarking is used When Benchmarking Is Used Improving communication Optimizing internal processes Improving organizational efficiencies Budgetary reasons Measuring outsourcing projects 1 2 3 4 5
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 9 Contents  Overview  Characteristics  Approach  Appendix
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 11 Benchmarking also has many limitations that we should be mindful of Limitations  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 competitive sensitivity that prevents free flow of information that is necessary  Comparing performances and processes with ―best in class‖ is important and should ideally be done on a continuous basis  Sanity Check: Is the success of the target company really attributable to the practice that is benchmarked? Are the companies really comparable in strategy, size, model, culture?  Sanity Check: What are the downsides of adopting a practice? More on costs on the next slide Remember! The competition is improving its processes too
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 13 C.K. Prahalad argues that organizations should look for Next Practices, and not be focused on Best Practices Best Practice vs. Next Practice Benchmarks provide guidance to what best practices are. Business strategist C.K. Prahalad argues that best practices can only take a company so far. They allow businesses to catch up to competitors, but not become the market leader. To gain the leadership position, an organization must 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? 1 2 3 Can a next practice impact the economics of the industry? Can a next practice be a source of competitive advantage? Can a next practice create a big opportunity for the firm? 4 5 6 Source: Best Practices Get You Only So Far, HBR, Prahalad
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 15 Contents  Overview  Characteristics  Approach  Appendix
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 17 Here is an alternate 12 phase approach Approach (12 Phase) Benchmarking is an exercise that should be repeated and re-validated on an ongoing basis. Source: TThe Search for Industry Best Practices That Lead to Superior Performance, Camp Select Subject Define the Proces s Identif y Potenti al Partne rs Identif y Data Source s Collect Data and Select Partne rs Deter mine the Gap Target Future Perfor m- ance Comm uni-cat Adjust Goal Imple ment Revie w and Calibra te Establi sh Proces s Differen ces
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 19 Here is a list of software that can be used for benchmarking Benchmarking Software SOFTWARE NAME PUBLISHER TYPE DETAILS Combo Benchmark Compare to Compete Online Benchmarking Web-based database  This web-based database is suitable for groups of competitors to benchmark individual performance against group performance  All process and performance benchmarks can be processed in this software, providing interesting analysis tools and complete benchmarking report GOBENCH INDEC GmbH & Co. KG Web-based database  The web-based database supports different kinds of benchmarking categories (product, process, competitor, customer, reverse engineering, marketing, patents, technologies, innovations, etc.)  It is a very powerful analysis tool Microsoft Excel Excel Desktop spreadsheet software  Excel is your standard spreadsheet software and is often used for smaller projects  Benchmarking data can be captured, stored, manipulated, and analyzed within Excel
    • PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 21 PPT Lab (www.pptlab.com) is the only crowdsourced presentation design service. Get consulting-quality presentations 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 by submitting your own presentation projects to our team. All presentations will be created by a team of management consultants and follow the Consulting Presentation Framework. www.PPTLab.com support@pptlab.com