Step by step procedure of implementing a benchmarking process in an organization

Benchmarking Process

There are many versions of benchmarking steps used by very successful organisations. The AT & T company has 12 steps, Xerox uses 10 , Alwa has 6 , and others recommend 7 or 8 steps. Thus organisations adapt the process to best fit their own needs and culture. However the benchmarking process proposed by Robert C. Camp (1989) is most widely used.

Steps in Benchmarking Process

Fig.1. illustrates the twelve steps in benchmarking process (proposed by Robert C. Camp).

Phases		Steps
I. Planning	1.	Earmark what is to be benchmarked?
	2.	Identify the best competitor.
	3.	Determine the data collection method and start collecting data.
II. Analysis	4.	Determine the current performance gap.
II. Analysis	5.	Project future performance levels.
III. Integration	6.	Communicate benchmark findings and gain acceptance.
III. Integration	7.
IV. Action	8.	Develop action plans.
	9.	Implement specific actions and monitor progress.
	10.	Recalibrate benchmarks.
V. Maturity	11.	Attain the leadership position.
V. Maturity	12.	Integrate practices into the process

Fig. 1. Steps in benchmarking process

Phase I: Planning

The planning phase involves three steps: To identify (i) what is to be benchmarked? (ii) to whom or what shall we compare?; and (iii) how will the data be collected.

Step 1: What can be benchmarked? (i.e., Deciding what to benchmark)

✔ Benchmarking can be applied to any business or production process.

✔ During this step, determine which functions, tasks, processes, or activities within the own organization will be subjected to benchmarking.

✔ Appoint a benchmarking team that will pilot the activity within the organisation.

✔ In this stage, formulate the project goals; determine the data to be collected; and prepare a tentative list of questions.

Step 2: To whom or what shall we compare? (i.e., Identifying benchmark partners)

✔ Identify the world-class or leading edge companies that have a similar product or process.

(i) The partners should be outstanding (best-in-class) regarding the benchmark subject:

(ii) competitiveness of activities; and

(iii) availability of reliable information about the partners.

Step 3: Determine data collection method and collect data

✔ Gather both qualitative and quantitative data about the process performances of partners based on interviews, surveys, and consultation of contacts and technical magazines.

✔ Examine the process and underlying working methods of partners.

Phase II: Analysis

The analysis phase involves a careful understanding of current process practices as well as those of benchmarking partners. This phase consists of the following two steps.

Step 4: Determine the current performance gap

✔ Determine the gap between the performance level of the organisation and that of its benchmark partner.

✔ After the data is gathered, measured, and analysed, compare these to the data of the own organisation. Based on this, determine the current performance gap between the own organisation and that of the benchmark partner.

✔ Document the differences in underlying working methods and the causes of the differences in performance.

Step 5: Project future performance levels

✔ The gap is a projection of performance. Therefore the performance will change as industry practices change. So keeping the future in mind, project the performance levels.

Phase III: Integration

Integration is the process of using benchmark findings to get operational targets for change. It involves careful planning to incorporate new practices in the operation and ensures that benchmarking findings are incorporated in all formal planning process. This phase consists of the following two steps.

Step 6: Communicate benchmark findings and gain acceptance

✔ Demonstrate the benchmark findings to the management for their acceptance.

✔ Communicate the benchmark findings to all organizational levels to obtain support, commitment and ownership.

Step 7: Establish functional goals

✔ On the basis of communicated data and acceptance of analysis, establish the functional goals and achieve them through the benchmarking process.

Phase IV: Action

The action phase encompasses the following three steps:

Step 8: Develop action plans

✔ Transform the functional goals into concrete action plans.

✔ The action plans should answer the following questions: When should, which action, with which, goal be implemented?; How can changes successfully implemented?; Who does that?; In which way?; Who is responsible for the implementation of the different actions?.

Step 9: Implement specific actions and monitor the progress

✔ This step relates to the execution of improvement actions and introduction of changes.

✔ Constantly monitor the implementation of actions for successful execution.

Step 10: Recalibrate benchmarks

✔ The updating may require the recalibration of the competitive benchmarking data. Since benchmarking is a continuous quality improvement tool, recalibrate the benchmarks again and again.

Phase V: Maturity

Maturity phase would be reached when best industry practices are incorporated in all business processes. This maturity phase is reached through the following two steps:

Step 11: Attain the leadership position
Step 12: Integrate practices into the process