Steps in Benchmarking

Decide what to benchmark - Not as simple as it sounds. Individuals need to identify the processes they perform. They also need to determine what statistics are available both internally and externally. External sources may be from industry or trade associations, publications, governmental sources and library material.

Identify Whom to Benchmark - Identify entities that have superior business processes. Again sources can be the same as above, with special attention paid to organizations receiving awards from professional group for process improvements.

Plan and Conduct Investigation - Spend time looking at statistics for your firm as well as others. Try to understand which statistics are relevant, timely and accessible. Refine questions in detail. Contact other firms willing to serve as benchmark partners. Perform site visits. These are not tours, but are focused on very specific practices.

Determine the Performance Gap - Identify the areas where internal performance lags industry or specific firm's operations.

Project Future Performance Levels - If changes are to be made, where will these measures of performance be in one year? Two years? Ten years?

Communicate Benchmarking Findings and Gain Acceptance - Discuss with management the gaps that have been determined and what increases in levels are possible.

Revise Performance Goals - Based upon discussions with management a fine tuning of goals may be needed.

Develop Action Plan - In detail identify what changes will be made to a specific process. This will include technology changes, work-flow revisions, reduction of non-value added steps, and similar actions. Define measurement criteria for these changes.

Implement Specific Actions and Monitor Performance - Make the changes and see if performance improves or not.

Recalibrate Benchmarks - Review the benchmarks that have been established to determine if targets remain relevant and achievable. Identify new measurements that are seen.

Benchmarking is not a one time occurrence. It is a continual process over years that identifies what operations are performed, how efficient they are, who performs better, how they do it and how can we incorporate their successes into our firm. Every year one reassess performance, targets and progress. It is an unending process targeting continual improvement.