Thursday, 25 November 2010

Business Benefits of Benchmarking

Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements. Also referred to as "best practice benchmarking" or "process benchmarking", it is a process used in management where organizations evaluate various aspects of their processes in relation to best practice, usually within their own sector. This then allows organizations to develop plans on how to make improvements or adopt best practice, with the aim of increasing performance.

The most prominent methodology is the 12 stage approach by Robert Camp (who literally wrote the book on benchmarking in 1989). It consists of;

1. Select subject 2. Define the process 3. Identify potential partners 4. Identify data sources 5. Collect data and select partners 6. Determine the gap 7. Establish process differences 8. Target future performance 9. Communicate 10. Adjust goal 11. Implement 12. Review / recalibrate.

Benchmarking can take various guises:
Process benchmarking - a firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency.

Financial benchmarking - a company performs a financial analysis and compares the results in an effort to assess overall competitiveness.

Performance benchmarking - allows a firm to assess their competitive position by comparing products and services with those of target firms.

Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering competitors’ products to find strengths and weaknesses.

Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.

Functional benchmarking - a company will focus its benchmarking on a single function in order to improve the operation of that particular function, i.e. Human Resources, Finance and ICT.

Internal benchmarking - involves benchmarking businesses or operations from within the same organisation (e.g. business units in different countries).

External benchmarking - analysing outside organisations that are known to be best in class provides opportunities of learning from those who are at the ‘leading edge’.

International benchmarking - best practitioners are identified and analysed elsewhere in the world; globalisation and advances in information technology are increasing opportunities for international projects.

Benchmarking involves four key steps:
1) Understand in detail existing business processes
2) Analyse the business processes of others
3) Compare own business performance with that of others
4) Implement the steps necessary to close the performance gap

Benchmarking should not be considered a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with the goal of keeping abreast of ever-improving best practice.

Why Bother?
There are many benefits of benchmarking; the following list summarises the main ones:

• provides realistic and achievable targets
• prevents companies from being industry led
• challenges operational complacency
• encourages continuous improvement
• allows employees to visualise improvement which can be a strong motivator for change
• creates a sense of urgency for improvement
• confirms the belief that there is a need for change
• helps to identify weak areas and indicates what needs to be done to improve.

So how does all this apply to us - what are the benefits of benchmarking CAD & BIM performance? In summary:

• Gain visibility of core CAD & BIM skills
• Identify individuals’ strengths & weaknesses
• Implement better CAD & BIM training plans for staff
• Improve recruitment processes
• Share performance data across an organisation
• Promote collaborative working between teams & offices
• Measure the performance of outsourcing or off-shoring partners
• Provide ‘best practice’ for CAD & BIM development
• Offer clearer staff inductions and more meaningful staff appraisals
• Enjoy better skills resourcing for projects
• Develop a continuous improvement process for CAD & BIM
• Save time and money on construction projects and offer best value for clients

In the end, it all comes down to better visibility of your teams and their real ability to use often complex technology and tools for maximum effect. If you can't measure it, you can't manage it.



  1. Benchmarking can be just as important as the results; especially if you plan to engage several people to help implement improvements. By including executives and other key stakeholders throughout the benchmarking process, you minimize resistance to change, and win their support.Thanks for featuring this.

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  2. Thanks to your method.that help us to improve our business.And provide or increasing opportunities to our project.

  3. Benchmarking is indeed important but we can't neglect Competency Framework Design which is of equal importance in business.