- Benchmarking is not the picture seen on the slide

- Benchmarking is used to build comparative reference points

- You use benchmarking to improve your organization’s operations and effectiveness

WHY SHOULD WE BENCHMARK?

- Saves time, minimizes costs- Don’t need to re-invent the wheel- Can improve the efficiency and

effectiveness of organizations- Facilitates learning- Good for gathering information on the

competition

- How do I benchmark?

- You can benchmark against competitors, your own organization, and industry leaders

- All benchmarking targets are relevant, depending on what you are trying to achieve

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COMPETITORS

- Benchmarking against competitors allows you to take a good look at your competition, and see how you stack up against them

- Competitors are less likely to share publically share information on their practices

- IE. Chapters looking at how Amazon does things

INTERNAL ORGANIZATION

- You can benchmark metrics within your organization.

- For instance, you can look at the effectiveness of different Sales offices within the organization.

- If one Sales office is doing better than the others, you can find out why, and then apply those practices across the other offices

- Cost effective, easy to get info- May miss out on external opportunities for

improvement

INDUSTRY LEADERS

- Benchmark against industry leaders

- Allows you to see how you’re performing compared to top performers

- Top performers may not be willing to share information

- Top performers have a lot of capital, you may not

TYPES OF BENCHMARKING:

- Performance benchmarking

- Best Practice Benchmarking

- Strategic Benchmarking

- Financial Benchmarking

- Product Benchmarking

PERFORMANCE BENCHMARKING

- Compare your performance with competitor’s performance

- Can compare products or services

- You want to see whose products & services are meeting the customers demands

- If theirs are and yours aren't, find out why

BEST PRACTICES

- Benchmark against industry-wide best practices

- I work in the network security industry, so we benchmark against controls like ISO27001, PCI-DSS, etc.

- Allows you to compare against a firm foundation on practices that have been vetted over time

- Best practices are best practices for a reason

STRATEGIC BENCHMARKING

- Look at the long-term decisions other organizations have made

- For instance, Apple moving into the mobile space was a long-term decision

- Why did Apple do that? If they’re did, should we? What do they know that we don’t?

FUNCTIONAL BENCHMARKING

- Compare current business functions to functions in other businesses, they do not need to be the same as your organization

- For instance, compare the performance and processes of your Sales department to another organization’s.

- Compare IT and HR to another companies

- IE. Sheridan comparing its registration process to UTMs

FINANCIAL BENCHMARKING

- Compare the financial performance of your company to another company in the same industry (preferably a top performer)

- Find differences in your financial performance and theirs

- For instance If their costs are lower, find out why? Do they own parts of their supply chain? Exclusive contracts? Mob extortion?

PRODUCT BENCHMARKING

- Compare your products to other leading competitors products

- Find out what customers like about those products, and what they don’t like

- Incorporate this feedback to improve your own product, or into new products

- Reverse engineer existing products to find out how they work

7 STEP PROCESS FOR BENCHMARKING

STEP 1 : PLANNING

- Essential for any benchmarking project

- Recognize the need for benchmarking (Hey… we suck…)

- Create a benchmarking plan – select targets, the type of benchmarking you want to do, and who will be doing the benchmarking (people resources)

- Decide what type of data you want to measure, and how it’ll be measured. Establish metrics.

STEP 2: DATA COLLECTION

- This step involves the actual collection of data

- Depending on the type of benchmarking, data can be collected from a number of sources:

- Financial statements- Customer testimonies- Internal documents- Insider information- Best practices- The internet- Existing products

STEP 3: DATA ANALYSIS

- The data collected must first be validated for accuracy and completeness. This is to ensure you are not benchmarking against inaccurate data, which could lead to bad results.

- You will want to indicate your own strengths and weaknesses, and determine any gaps between your current capabilities and the capabilities of the organization your benchmarking against

- Provide recommendations on how to close those gaps

STEP 4: REPORTING

- Consolidate your analysis into a clear and concise report

- Gaps, conclusions, and recommendations should be clearly illustrated

- Make the business case for enacting your recommended improvements

STEP 5: IMPLEMENTING IMPROVEMENT ACTIONS

- Once recommendations have been made and approved, they must then be implemented.

- These recommendations should be a part of the organization’s larger strategic plan (continual business and performance improvement)

- Benchmarking should be an on-going process, and not a one-shot deal

STEP 7: INSITUTIONALIZED LEARNING

- Performance improvements must be fully embedded within the organization

- They must be sustained over time, and should be a part of the organization’s larger vision

- Culture of continual improvement and learning

CONCLUSION

- Benchmarking is a good way for new businesses to streamline their processes without having to reinvent something that’s already been done

- Can help to improve existing businesses

- Can result in innovation and creativity

- Can expose competitor’s weaknesses