1-10.2 Benchmarking Analysis

Benchmarking analysis is a specific type of market research that allows organizations to compare their existing performance against others and adopt improvements that fit their overall approach to continuous improvement and culture.

Many types of benchmarking exist; the most commonly recognized are:

• Process — evaluates specific business processes (e.g., purchase planning, e-procurement, service delivery). Process maps are used to facilitate benchmarking.
• Performance — compares product and service as a way to assess the organization’s competitive position against same-sector peers. Focuses on costs, technical quality, ancillary service features, and performance characteristics (also called competitive benchmarking).
• Strategic — seeks to evaluate the organization’s strategic maturity against others across various sectors. Focuses on general approach to the development and management of core competencies, innovations, and change strategies.

Benchmarking analyses often rely on both quantitative and qualitative measures to generate meaningful results. Quantitative analysis can provide metric-based outcomes, while qualitative comparisons often reveal best practices. The benchmarking process usually encompasses four steps:

1. Planning.
2. Analysis.
3. Action.
4. Review.

1-10.2.1 Step 1: Planning

• Determine the broad business process and tasks to benchmark.
• Identify the resources required for the study.
• Confirm the key activity performance measures or indicators.
• Document the existing process for conducting the activity.
• Identify appropriate reference models as a starting point for your assessment.

1-10.2.2 Step 2: Analysis

• Collect information to identify the scope for improvement.
• Compare the existing process with that of appropriate reference models to identify differences and innovations.
• Agree on expected targets for improvement.

1-10.2.3 Step 3: Action

• Communicate the results of the study to key stakeholders.
• Develop an improvement plan to implement changes.
• Implement the improvement plan, monitoring progress and reviewing as necessary.

1-10.2.4 Step 4: Review

• Review performance when the changes have been implemented; identify and rectify bottlenecks.
• Communicate the results of the implemented changes.
• Schedule future benchmarking activities to continue the improvement process.