Benchmarking (graded)

There are several ways to benchmark. The two most common

benchmarking tools are performance benchmarking and best-practice
benchmarking. Consider a nationwide bank that has contracted with a
seller to assess its current stafng and facility locations. The goal of the
contract is for the seller to produce a strategic plan that creates cost
efciencies for the bank by recommending (and implementing) areas to
consolidate among sta and facilities. (!ne recommendation may be to
close down a bank branch that is located within three miles of another
bank branch.) This is a long-term contract stretched out over "ve years.
#f you were the pro$ect manager in the bank% to what benchmarks would
you compare your seller& 're they performance benchmarks or best-
practice benchmarks&
Performance benchmarking involves comparing the performance levels of
organisations for a specifc process. This information can then be used for
identifying opportunities for improvement and/or setting performance targets.
Performance levels of other organisations are normally called benchmarks and
the ideal benchmark is one that originates from an organisation recognised as
being a leader in the related area. Performance benchmarking may involve the
comparison of fnancial measures or non-fnancial measures such as
absenteeism, staf turnover, and the percentage of administrative staf to front-
line staf, budget processing time, complaints, environmental impact or call
centre performance.
In est practice benchmarking, organisations search for and study other
organisations that are high performers in particular areas of interest. The
processes themselves of these organisations are studied rather than !ust the
associated performance levels, normally through some mutually benefcial
agreement that follo"s a benchmarking code of conduct. #no"ledge gained
through the study is taken back to the organisation and "here feasible and
appropriate, these high performing or best practices are adapted and
incorporated into the organisation$s o"n processes. Therefore best practice
benchmarking involves the "hole process of identifying, capturing, analysing,
and implementing best practices.
In this case, since this is a long term contract spanned over % years, it "ould be
good to incorporate best practices "ithin the organi&ation by properly studying
all the processes, analy&ing all the data and then implementing those best
practices. 'o, in my vie", I "ould like to recommend best-practice benchmarks in
this case.
(eferences)
http)//""".skea.ae/benchmarking*+,+-.htm
enchmarking is the process of comparing one.s business processes and
performance metrics to industry bests or best practices from other industries.
/imensions typically measured are 0uality, time and cost. 1ith that said I "ould
recommend performance benchmarks since these are the metrics "ithin the
industry itself.
2n my !ob "e benchmark throughout the year. 1e often compare our progress
"ith each !obs performance. If someone is not meeting production, "e make
changes. 1heather it.s moving them to a diferent position or fring them.
3 measurement of the 0uality of an organi&ation.s policies, products, programs,
strategies, etc., and their comparison "ith standardmeasurements, or similar
measurements of its peers.The ob!ectives of benchmarking are 456 to determine
"hat and "here improvements are called for, 4+6 to analy&e ho" other
organi&ationsachieve their highperformancelevels, and 476to use this information
to improve performance. It is the process of comparing one.s business processes
and performance metrics to industry bests or best practices from other
industries. /imensions typically measured are 0uality, time and cost. In the
process of benchmarking, management identifes the best frms in their industry,
or in another industry "here similar processes e8ist, and compare the results and
processes of those studied 4the 9targets96 to one.s o"n results and processes. In
this "ay, they learn ho" "ell the targets perform and, more importantly, the
business processes that e8plain "hy these frms are successful.
est practices focus on specifc areas and there for thats the recommendeation
on my behalf because that is their e8pertise and "ill devote their time analy&ing
the companies "eakness and strengths and potential to gro".
(ead more)
http)//""".businessdictionary.com/defnition/benchmarking.html:i8&&+#ct;<=r0
There are several areas that could be benchmarked. The frst "ould be to
measure against a target percentage in cost savings. If, for e8ample, the goal
"ere to drop the overhead costs by 7-, over the % years term then not hitting a
target of >, per year, at a minimum, could be seen as a failure to meet
standards. This "ould be a performance benchmark. In the e8ample above,
closing a branch that "as "ithin 7 miles of another branch "ould fall under best
practices. These could also be tested by measuring against the industry
standards. y the end of the contract terms then the metrics must match or
e8ceed industry standards "ith a certain percentage met each year.
2ne other possibility "ould be to measure customer satisfaction to ensure that it
is rising.
The fnal benchmark of course is the gro"ing fnancial health of the bank.
In a nutshell, best practice benchmarking relates to "hat makes better sense.
Therefore, because of the geographical locations of both banks in such a short
distance, it only makes more sense to close one of the branches do"n to cut cost
and up revenue. I am sure that the seller is also comparing other banks in the
vicinity and is a"are that those banks are not as close to each other in the same
area compare to their customer.
?o"ever, best practices are also used to compare their performance against
other top performers.
@The practice of benchmarking, also called 9best practices,9 is "hen one
company, team, or individual compares its 4or his6 performance to that of similar
counterparts, be it those in the same industry, of the same relative si&e, or in the
same position.A
http)//""".eho".com/info*B-CB5>%*benefts-benchmarking.html
Benchmarking is a term that has often been used to represent (the
best of the class( performance. )our te*t implies a slightly less
(perfectionist( performance threshold% whereby you assess the
performance measures for other similar vendors or services relative to
your B+! services% and use these samplings to de"ne performance
measures for your pro$ect,contract. -hich of these two inferences do
you feel is more appropriate for supporting the development of
performance measures& .tate your arguments in support of your
selection.
In my opinion, the 9slightly less perfectionist performance9 "ould be appropraite
in case "here the technoloy and processes in the industry is still evolving and
there is no 9est in =lass 'ervice enchmark9 that companies can go after. In
this case, it is better to compare and benchmark "ith other companies "ho are
competing in the market. ut, if the technology/processes is fairly matured in the
industry and there are not many players in the market, it "ould be better to
benchmark "ith the 9est of the =lass Performance9.
I "ould develop performance measures using other services relative to our P2
services. This "ould only "ork if the service is e8tremely close to the same
e8act type of pro!ect/contract. Dor e8ample, company 3 is building ne" decks for
apartment comple8 E. =ompany has built ne" decks for apartment comple8 F
last year. I "ould use the performance of company to measure company 3, if
they "ere building the same type of decks using the same type of materials.
=onstruction companies use these type of performance standards to bid !obs.
They kno" a pretty decent estimate , plus they factor in do"n time, to e0ual out
an appropriate bid for the company.
I think it may depend on the conte8t. 3 benchmark is a standard to measure
against. I don.t think that it re0uires it to be the best possible outcome. I think
that the term does have some Guidity. It is the standard against "hich the
performance is to be measured. If it is set too high then everyone "ill fail it, or
the failure rate "ill be unacceptably high. 'et it too lo" and there is no point in
having one since it "ill be impossible to measure improvement. 1hile not the
best of the best, maybe it "ould be 9The best of the rest.9 Haybe the goal "ould
to be in the top 5%, or so. The bench mark to be in the B%, percentile or better
I agree "ith <ason in that I too believe that "hether you decide to use 9best of
the class9 or 9comparisons against other similar vendors9 "ill be determined by
"hat the company is attempting to achieve "ith its benchmarking pro!ect. If the
goal of the company is to be T?I I'T then it "ould probably have a
benchmarking analysis against "hat it currently deemed to be the best in class
in that particular area. ?o"ever, if a company is attempting to see "here it
might stand against its competitors, then it might be more apt to have the
comparison methodology used for its benchmarking pro!ect.
The 9best of the best9 "ould be used for a company trying to maintain
dominance in a highly competitive market, lets say sneakers. 1hen Jike frst
introduced the 3ir <ordan.s it set a benchmark for the rest of the basketball
sneaker industry "ith the tremendous public reception and record breaking
sales. Therefore if other companies such as 3nd5, (eebok and 3ddidas "ant to
compete "ith the 3ir !ordans then they "ill have to reach the benchmark set by
Jike.
The 9comparisons against other similar vendors9 "orks for the P2 and
contracting process. There is not 9best of the best9 benchmark here because
every one "ants something diferent in their proposals and everyone thinks that
they are the best. The only "ay to use this right is to see "hat ob!ectives you
"ant then compare them to the company standards and come up "ith your o"n
benchmark. Fou may have a standard of building a +%,--- s0 ft home in K days
but if you look at the average time frame by competing vendors you "ill ad!ust
that benchmark to meet in the middle.
In order to evaluate your o"n performance, it has to be compared to somebody,
something, or some metrics of similarity. This is "hy benchmarking is used by
organi&ations to compare/measure insights to help them understand the "hy,
ho", and "hy not$s of their organi&ation.s performance against the best of the
best competitors. The reason this is done is to avoid making mistakes and reduce
high risk. 3fter all, if an organi&ation can be as good or better in their
performance compare to another company of similar products, they "ill
defnitely "ant to use their competitor$s score card against their numbers to see
ho" they are doing. I believe it makes more sense business-"ise. ?o"ever
personally, one "ill al"ays "ant to be more aggressive on setting their o"n
goals/level according to "hat they are indulged in, and "ork diligently to achieve
the highest performance, and let someone else measure against them. ut, you
then risk the chance of failure and lo" performance.
The latter is a more realistic view than the former. #t stands to reason
that measuring performance based on the performance of other similar
vendors or services would give one a better and more accurate
comparison. This inference suggests that a comparison of apples to
apples be made ensuring that all factors are e/ual or similar% such as
geographical location% pricing matrices% methodologies,technology and
service level% before considering one to be better than the other.
#s it realistic to use a (perfectionistic( metric for benchmarking& #s
there a human factor involved in pro$ect implementation there&
Performance benchmarking may be a one-of event. ?o"ever, a company is
most likely to achieve lasting results if it integrates benchmarking activities
"ithin its permanent performance management frame"ork. 3mong other
benefts, regular benchmarking helps an organi&ation ensure that its metrics
remain absolutely relevant "ithin its industry and market.
http)//""".paconsulting.com/our-thinking/get-your-goals-right/
i don.t believe in a perfectionistic anything. 1ay to many of the une8pected can
give diferent results.
Ivery company have some type of benchmarking "hen it come to production.
3ll companies "ill set a error factor "hen it comes to production. I don.t believe
the perfectionistic approach is relalistic but I do believe setting standards high is
close to perfection you can get to. The human factor "ill al"ays play a part in
any pro!ect.
There is no perfect thing or solution, the only thing one can do as a PH or =H is
implement reasonable bench marks that are acheivable through hard "ork and
efort, once those goals are reached "e can then share best practicess and
e8pierences to make it better the ne8t time.'haring in an open discusions "ith
your team the best pracices about a pro!ect is very motivating and ueful in the
gro"th of the team and company in the long run of business.
The perfectionist metric is used alot to 9set the bar9. This means you are setting
standard high enough to incite a challenge. 1hen performing a pro!ect
implementation you dont "ant to entice challenge you "ant to foster 0uality
"ork. 1hen the human factor is involved in the benchmarking, you "ill never get
a perfectionist vie", because of the human error 8-factor.
/uring any pro!ect implementation, humans and their thinking are involved,
"hether it be physical "ork, analytical "ork or !ust pressing the button on a
machine. 1hen you involve humans in anything, there is human error you must
take into account
Lincent I agree "ith you Prefectionistic metric is used a lot to 9set the bar9.
kno"ing that the 0uality "ork and human factor is involved in benchmarking. I
"ould like to kno" more e8amples of this.
/efnitely J2 to perfectionistic metrics. Perfection is almost impossible in the
real "orld. 1e need to implement metrics that makes sense and not shoot for
impossibilities. 3 PH that is looking for perfection is out of his mind. Fes, "e "ant
0uality and a top notch product and performance but not unmanageable metrics.
This is like saying to a good 2lympic s"immer or diver that if they "ant to be
e8cellent in their performance, they should no" "alk on "ater. ?umans are not
perfect and "e should not make perfection a goal, perhaps a machine "ill do the
trick. 'ome people use this term very lightly and hope that "hen they ask for
perfection they "ill at least get e8cellence. Perfectionist are nuts. 0o pun
intended. 1verybody will drop the ball at some time.
#t is not realistic to use a (perfectionistic( metric for benchmarking.
The whole point of benchmarking is to set goals and standards that the
company can meet and hopefully one day% e*ceed. #f goals and
standards are unrealistic then no matter how you put it% it would be
2031'4#.T#C to use it as a metric for benchmarking. 5or e*ample% a
company can strive to have 67 defects in a production line but it
wouldn8t be reasonable because the company won8t be able to reach
it.... Companies can set 9#:9 standards and goal such as 6-;7 defects
for a production line and that is more realistic.
9ere is a dierent way to view the discussions we are undertaking
here< =o you want to benchmark using a perfectionistic metric that may
not be achievable% or do you want to work with a best in the class
metric that% by de"nition% will be continuously changing (in other
words% the bar will always be sub$ect to be raised)&
I think "orking "ith the best in the class metric "ill al"ays be the best solution.
I "ant to be able to "ork "ith someone "ho is al"ays trying to raised the bar.
Ivery pro!ect is diferent and their "ill be times "here you might have to change
in the middle of the pro!ect. This metric gives you a little more Ge8ibility "hen it
comes to trying to achieve your goal. 3gain a perfectionistic metric is not
achievable but a class metric is and makes more sense.
I "ould prefer to "ork in a best in the class metric environment because it is
more encourage for you as "orker. It allo"s you to push to achieve to be the
best. 3lso, it allo"s the employees kno" that the goals are achievable.
I agree "ith being able to "ork "ith a best in the class metric that "ill
continuously change. I believe that it is very discouraging to try to "ork to"ards
a perfectionistic metric. It is much more re"arding to "ork to"ards something
that can be achieved and then continue to raise the bar.
It depends on "ho is setting the standard. I kno" "hen I "as in the military, the
only thing that "as acceptable "as a perfectionistic metric. ?o"ever, in the
civilian "orld I have only come across a best in the class metric. The same !ob
can be done by a C diferent C man teams repetitively for a day. 3t the end of
the day everyone might have a completely diferent amount of time and 0uality
of "ork. It "ould be foolish to assume that every cre" should be able to
complete the task "ithin the same time constraint and 0uality of "ork as the
best cre" of the day. 3lso, using a perfectionistic metric that may not be
achievable sounds like you are setting yourself up for either ama&ing results or
failure. I can understand that setting your personal goals high and almost
achievable may be motivating, but I don.t think it is "ise "hen it comes to
consuming other people.s

I "ould "ant to "ork "ith the best in class matri8. Trying to reach the
impossible is !ust that impossible and to me is a "aste of efort. Fou might as
"ell ask me to catch a unicorn. ut the best in class is an obtainable goal and
"hen you reach it, it can also then change again. This "ill al"ays have your
company striving to be the best and al"ays improving. 3lso if the bar is too
high, it also can be lo"ered to ad!ust accordingly.
#f you benchmark using a perfectionistic metric that may not be
achievable% then your time could be wasted and money lost. #f you want
to work with the best in the class metric that the bar will always be
sub$ect to being raised% that is more hopeful working towards
something that isn8t even achievable.


I think since it is not aceivable to have e8pectations of a perfectionist meteric,
that "orking "ith "ith best in the class is the better choice. Ivery pro!ect is
diferrent, you can only get better through trial and error and e8pierence. 1hen
the bas or e8pectations are raised the ne8t time around o me it is actually a
source of motivation to reach the ne8t bar and so fort. Joo one nothing is perfect
"e can try to get very close to it but there "illal"ays be a Ga" one "ay or
another.
-ould it not be difcult to set the (perfection( bar% since% in theory% no
one has achieved that level of performance&

<ust like you "ould receive performance goals at "ork. It is not diMcult to go
above that if you put in an a great deal of efort. so no it "ould not be diMcult to
set the perfection bar. I believe a person should al"ays strive to be a
perfectionist. It doesn.t al"ays "ork but you can get pretty close.
Hy "ork defnitely has a perfection bar set for our 0uarterly revie"s. 1e can
score bet"een a 5 and % "here a % is pretty much the ideal employee that goes
far beyond the e8tra mile. Host employees fall bet"een a 7 and a 7.% but "e all
defnetly try to reach a % on atleast one the core areas of our revie".
In my opinion, perfection is sub!ective. Iveryone has their o"n vie" on "hat
perfection is. Perfection could be a threshold of sales that a ne" product reaches
it could be time it takes to complete a repair or even the overall completion of a
building on time and "ithin budget. 'o all in all, perfection could be a benchmark
for a lot of diferent perspectives.
Though "hen contacting someone to do "ork, you must not e8pect perfection as
there never "ill be. Nnless you are doing the "ork yourself and taking your time,
there is no "ay that someone else can perform perfection in your eyes. 'o
ultiamtley, by using the 9perfection bar9 you are setting yourself up for
dissapointment and failure.
?aving a 9perfction9 bar could derail the progress of anything. The odds of
hitting perfection are so lo" that fe" "ould even try. It is better to set goals that
are achievable and raise the bar accordingly. Host are not going to strive for
perfection and ignore it, therefore not have any incentive level at all.
I agree the pro!ect could be derail by having a perfection bar. The old saying is
practice makes perfection, but the real meaning is practice make a better
pro!ect. I think you have to strive to be better and each pro!ect must have a
goal. 'o having a perfection bar might be out of reach, but trying to get close is
more of a realistic goal.
I agree "ith you on this. If there is a goal that cannot be obtained, then "hy
tryO People "ill reali&e that no matter ho" hard they "ork they "ill never meet
those standards. I believe people for the most part "ant to go a good !ob but
also need to see their "ork mean something.
you are correct about setting goals that are achievable instead of goals of
perfection. Jot only "ill it be diMcult to set a bar for perfection, but it is
unimaginable and impossible. Perfection cannot and should not be compared to
a goal, or a level of performance, because it is unrealistic. 3lso, perfection cannot
and should not be compared to time. If a pro!ect fnishes on time, that does not
mean it "as done to perfection. Iven, if a !ob is performed by oneself and you
took ten years to get it to "hat you think is perfection, it is not perfection. It may
be a personal perception of perfection. Perfection relates to 0uality. It is the
0uality or state of being complete, or faultlessness or a divine attribute of
complete e8cellence. There is no reason to set the bar that high "hen it is not
achievable.
Perfect can be the enemy of continuous improvement. 2ften aiming for
perfection "ill result in e8cessive e8penses and frustration "hen it is not
achieved. Then it "ill be diMcult to establish the foundations necessary to
implement a continuous improvement program.
'etting the 9Perfection9 bar basically means that the company is trying to
achieve more than "hat is re0uired. There is al"ays a cost to the 0uality and the
cost increases as "e try to create perfections in the systems and processes. 'o,
defnitely there is a cost associated "ith that. 3lso, the 0uality means meeting
the customer.s ob!ectives/re0uirements. If "e try to set and try raising the bar
everytime, "e might start over-allocating our resources to accomplish that, this
may impact other processes/systems negatively in the organi&ation and thus
may cause overall negative impact to the organi&ation. 'o, setting the
9Perfection ar9 is not a practical thing to do al"ays.
#t has often been said that a problem with benchmarking is that too
little time is spent ensuring that the entity or practices being
benchmarked are appropriate% applicable% or directly comparable. =o
you believe this is indeed the case&
I do not believe this is the case. 3ny company "ho engages in a benchmarking
pro!ect has essentially said that it recogni&es that it can improve and is
undertaking this pro!ect so that it can improve. In doing such most companies
"ill take the follo"ing steps that are necessary for a successful benchmarking
pro!ect)
3nd that last step is important -- /2 IT 3P3IJ. 9enchmarking is an evolutionary
process. 3 company may start "ith internal partners and see incremental
improvements. In turn, the process then e8tends to better-practice partners,
"hether internal to the company or e8ternal. ased on the improvements made
and any additional areas identifed for the ne8t round of improvements, the
process is then e8tended to benchmarking "ith the best-practice organi&ations.
The key to this evolution is al"ays fnding a partner "ho is measurably better in
the process being benchmarked. 2nce process parity is achieved "ith the
partner, a ne" partner must be found, one "ho is still measurably better in the
process. The benchmarking process continues until the best is found and
superiority over this partner.s processes is achieved.9
'ource) 1ireman, Terry. 4 Q +-5-6. enchmarking best practices in maintenance
management, +nd edition.
=o you think most people lack this motivation for ongoing
improvement& #f yes% why& #f no% why not&
It is a matter of leadership. Place the appropriate people in the leadership role
"ho can motivate their team. 3 continuous process of improvement is important
for any pro!ect. Dor e8ample, my team takes "ork re0uests. 3s an ongoing
improvement, "e took an intranet form that "as 0uirky and not user friendly and
developed one from 'harepoint that is customi&able, user friendly, and much
more easy to track and maintain. The person in leadership before me "as old-
school and cared little for such things but I am all for letting technology do the
paper"ork for meR 3nd "ith this ne" application, it sho"s the employees that
"e are supporting them, making the process stream-lined. Dor the upper
management and the e8ecutives, it sho"s that "e are moving for"ard "ith
technology, letting it do the "ork for us so that "e can be free to do the
re0uests, etc.
I believe this comes to do"n to the individual and their thought process. I do
believe most people lack motivation for ongoing improvement. I feel it.s because
once you fnd a comfortable place, you tend to not "ant to change. Those "ho
are older tend to fall into a comfortable position and not "ant to improve.
Fes, sometimes if the group does not have the same goal this can cause a lack of
motivation. There "ill also be a lack of motivation if the person is not sure "here
they ft in, ho" they can make a diference. 3lso, if a similar pro!ect "as tried and
failed that "ill cause a lack of motivation. I also believe that frustration, conGict
bet"een t"o parties "orking on the same pro!ect, "hen meetings or agendas
are not productive, "hen the pro!ect manager is not doing their !ob "ell can all
lead to a lack of motivation as "ell.
1ell, if the ongoing improvement is like a bridge to no-"here, than people "ill
lack the ongoing improvement. 1hen people stop being motivated it is not
al"ays due to la&iness or lack of interest. 'ometimes it is due to lack of good
management that has caused a reverse force, causing people to behave in such
a manner. Iach and every one of us has a diferent kind of force that enhances
our motivation. ?aving said that, it is up to a good management leadership "ith
the help of the employee himself to rise up and bring out the motivation. ut, I
believe given proper empo"erment and participation, motivation can be
achieved by almost anyone. 2n the other hand, there are a very fe" people "ho
no matter "hat "ill not be motivated. In this case it is time for them to change
!obs or retire.
up some very good points as to some of the typical e8cuses folks might give for
not being motivated to improve. 3nd I think all of them are legitimate e8cuses.
?o"ever, I.ve found that the biggest reason for lack of motivation to improve lies
mostly in the culture of the organi&ation. If an organi&ation e8hibits a culture
"hereby it encourages employees to 9think outside the bo89 and look for "ays
they can do better, then most likely the employees "ill have motivation for
ongoing improvement. 1hereas, if the organi&ation punishes folks for trying to
come up "ith ne" "ays of improving then those employees usually lack the
motivation to improve and are the ones "ho you often hear saying 9"e.ve al"ays
done it that "ayR9 3nd it.s usually those companies "ho fail because their
culture "as one in "hich its personnel "eren.t encouraged to look for ongoing
improvements to ad!ust to the changing environment
By nature% most people $ust want to "nd a comfort >one at work place
and take easy on $ob. #t is the very competitive% driven people who
have all the motivation. #t is those people help corporations strive to be
the best.
-hat are some of the repercussions that can arise from choosing
benchmarking practices or entities that are not appropriate or
applicable&
3 repercussion that I can think of of the top of my head is obtaining useless
data. The data collected or used can be totally useless if it is not applicable to
the pro!ect or situation. 3nother repercussion is the setting of the bar "ay over
the actual achievable benchmark. This is setting the company up for failure
before they even begin. This can lead to underbidding a pro!ect or over
allocation of the company.s resources.
benchmarking should be undertaken by all businesses if for no other reason, to
keep abreast of "hat the competition is doing and the performance standards
they are either operating for or seeking to attain. 3s a couple of you have noted,
it can also help you defne the standards or the operating goals you "ant to set
for your frm.
<ust keep in mind that "hen you do choose to benchmark others in your industry,
do enough research to fully understand the benchmarking frm.s characteristics,
operating profle, its ob!ectives, and target markets, and its culture.
enchmarking can be very valuable as long as you are comparing apples to
apples, and the biggest problem in benchmarking is that more often than not,
frms accidently or unkno"ingly end up comparing apples and oranges.