How to benchmark
- 1 Select one or two important activities to benchmark - typically, a few key processes and related key performance indicators.
- 2 Establish who will carry out the project and whether they need help.
- 3 Decide what will be the most useful comparisons - industry statistics, similar businesses, outstanding companies or a best-practice model.
- 4 Contact your trade association or consultancies to identify any relevant benchmarking packages, models or industry studies.
- 5 If appropriate, identify and approach three to six partner businesses; decide what information you will exchange and how it may be used.
- 6 Draw up an agreement with any partners, taking into account the need for confidentiality and any legal or ethical constraints.
- 7 Collect internal information on the processes and key performance indicators you will be benchmarking.
- 8 Get comparative statistical information from published sources, industry studies or partners using a questionnaire.
- 9 Use site visits to investigate partner organisations, their processes and strategies and the business environment they operate in.
- 10 Analyse key differences - in levels of performance indicators, in how you carry out processes, or in policies, objectives and other strategic issues.
- 11 Investigate why you differ, and to what extent differences reflect comparative weaknesses or different objectives and constraints.
- 12 Identify potential improvements and develop an action plan; consider how you will manage any change required.
- 13 Review how successful the benchmarking study was and the impact of any changes you made; plan your continuing benchmarking activities.
- focus your benchmarking on important activities
- investigate why other companies' processes and performance differ
- use benchmarking to drive change
- choose areas to benchmark just because data is easily available
- over-complicate by trying to benchmark too many activities
- collect data which will not help you make decisions