BBenchmarkingenchmarking

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BBenchmarkingenchmarking

Benchmarking is the process of continually searching for the best methods, practices and processes, and either adopting or adapting their good features and implementing them to become the “best of the best.

“Use benchmarking both for comparison of performance as well as to understand the potential

for improvement”

BBenchmarkingenchmarking

BBenchmarkingenchmarking IIs…s…

A continuous process A process of investigation that provides valuable

information A process of learning from others; a pragmatic

search for ideas A time-consuming, labor-intensive process

requiring discipline A viable tool that provides useful information for

improving virtually any business process

Active and continuous change and development should be focused

Progressive and positive approach should be conducted

For change is the most current evidence Only the best practice is facing Basic principles are measurable qualities Focuses on leadership positions

“The first goal of Benchmarking is to achieve high performances. It includes good, service and operation.”

It helps to identfy the organization’s goals and objectives.

It claim to confirm as the best applications for achieving the organization’s goals and purposes.

It want to increase compatitive advantages and corporate performance.

It change or strengthen the corporate culture…..etc

Competitive• Industry leaders• Top performers with

similar operatingcharacteristics

Functional• Top performers

regardless of industry• Aggressive innovators

utilizing newtechnology

Internal• Top performers

within company• Top facilities

within company

Best PracticeOverlap

HHowow BBenchmarkingenchmarking iiss

uused?sed?

Compare performance of an existing process against other companies’ best-in-class practices.

Determine how those companies achieve their performance levels.

Improve internal performance levels.

Process benchmarking - the initiating 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; increasingly applied to back-office processes where outsourcing may be a consideration.

Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.

Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.

Performance benchmarking - allows the initiator 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 which is taking apart 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 to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.

Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.

PPrinciples rinciples oof f

BBenchmarkingenchmarking Contrast Principle - participants should

mutually benefit from each other. Only one side should not be winning.

Similarity - be addressed for the success of the application process between the functional similarities and comparable properties must exist.

Measurement – benchmarking is a measurement technique.How to set performance goals are reached in the field is to learn. therefore, measures must be applied systematically and should be based on adequate sampling.

Accuracy – the data used shoul be objective and reliable.You do not to use estimated and specific assesment.

CConclusiononclusion

“I want to summarize that I mentioned as main points.”