A

Five-Stage
Benchmarking Process
We are here describing an example of a normally used five-stage process:
Select the process to

Identify customer needs

Identify critical success

benchmark

and expectations

factors

Select preparation team

Select visit by team

members

members

Map and measure current

Research potential

Approach selected

Gather data from identified

process

benchmarking partners

benchmarking partners

partners

Compare your process

Analyse the performance

Take ideas learned from

with your partners

gaps

your partners

Set goals

Establish a budget

Decide on change process

Planning the project

Identify the strategic intent

II

Forming the teams

Select lead team members

III

Collecting the data

IV

Analysing the data

Taking action and

recycling the process

Stage 1: Planning the Benchmarking Project

Objective: To determine what to benchmark
and against whom to benchmark. The first
stage in benchmarking is to plan the exercise.
This plan should fit within the companys
business plan.
Steps to follow:
identify the strategic intent of the business
unit or process being benchmarked
select the processes to benchmark
identify the processes customers profiles
and set of expectations
Identify the critical success factors.

Stage 2: Form The Benchmarking Team

Objective: To select, train and manage the
benchmarking team.
a. The first thing is to select the team members
A team represents the different perspectives,
special skills, and variety of business connections
the individuals bring to the benchmarking
process. The word team has connotations
of common purpose or goal, co-ordination,
co-operation, communication and motivation.
There are three types of teams required for a
benchmarking exercise:

Train all team members

Prepare solutions

Monitor progress and

communicate

The Lead Team

The lead team is mainly concerned with building
and maintaining commitment for the benchmarking
process throughout the organisation by:
Providing leadership in decisions on the
particular areas of focus, and facilitating the
selection of the Preparation and the Visit
Teams
Managing the process to achieve targtets on time
and within budget
Integrating the benchmarking process with
other improvement initiatives being planned or
currently in operation.
The Preparation Team
The role of the Preparation Team is:
To work, within the scope, defined by the lead
team, on a single business process
To carry out the detailed analysis and preparation
To help to identify partners
To have representation on the benchmarking
visits
To analyse findings and design improvement
projects.
The Visit Team
The role of the Visit Team is:
To carry out the benchmarking visit within the
scope defined by the preparation team
To deliver the findings to the preparation team to
implement.

4 networking4enterprise Issue 44 May 2013

b. Train the team as necessary

Educate team members in the
benchmarking process
Train team members as necessary in the use
of analytical tools and techniques
Train team members as necessary in
interpersonal skills such as leadership
skills, facilitation skills and basic project
management skills
Train team members in questioning
techniques
Familiarise team members with company
background and systems, etc, if necessary.
Stage 3: Collect The Necessary Data
Objective: To identify best practice
companies and to gather benchmarking
information about the performances and
practices of the best practice companies.
a. How to currently perform the process
To identify how to currently perform the
process, collect and review any information
already available on the process. This may
include:
Flow charts this involves taking the
process to be analysed and drawing up a
diagram to show each step in the process.
This is useful to understand the process
and its drivers
Customer feedback this involves
identifying customers and their needs to
assess whether the process is performing
well or not. Customers can be asked
direct or by formal customer survey.
Answers to these questions can give clear
indications as to what aspects of the
process should receive priority
Measurements of the process, e.g. unit
times, volumes/frequencies
Procedure manuals.
b. How does a benchmarking partner
perform the process
There are a number of ways to find a
benchmarking partner including:
Literature sources can be helpful
especially if search is international
Trade and professional associations
can be useful particularly if potential
benchmark partners are likely to come
from a particular industry or service
sector
Stockbrokers for background and
structure of the potential benchmark
partners

Major suppliers of machinery, process

technology, materials can be sources
of specific information regarding the
potential benchmark partners
Major customers.
The selection of benchmarking partners
is critical, as it will determine the process
comparability and the potential for a
quantum leap change. Site visits are
important to gain an in-depth understanding
of the systems and processes of the best
practice companies chosen as benchmarking
partners.

Stage 5: Take Action and Recycle the Process

Objective: To develop strategies and action
plans to close the gaps.
What needs to be done to match best
practice for this process?
a. Identify- task, responsibilities, resources &
time targets for the change process,
b. Prepare a budget & cost benefit analysis,
c. Put it in to practice to improvement,
d. Monitor performance indicators carefully
as these should highlight improved
efficiencies

Stage 4: Analysing the Data

for Performance Gaps
Objective: To identify and analyse the gaps
between best practice and the companys own
business processes.

Conclusion
Benchmarking is a complex process. When an
organization looks at benchmarking they must
look at all aspects of the business, its products/
services, and its processes. It is crucial for
organizations to focus on anything that will
impact its performance and quality.

All the collected information is used

to identify performance gaps between
benchmarking partners. When comparing
the performance of companies, adjustments
must be made for differences due to:
Economies of scale
Different management philosophies
(outsourcing, decentralisation)
Product features and manufacturing
processes
Operating environment (different awards,
regulatory constraints).

BENEFITS to consider
Encourages an organisation to become
more receptive to new ideas, methods,
processes and practice.
Identifies problem areas,
Creates opportunities for improvement.
Serves as a Report card.
Instils a sense of competitiveness.
Identifies best practice.
Improves yield.

A composite picture that reflects the input of

many companies might have to be developed.
Synthesise the process information gathered
in a way that is appropriate for the companys
culture.
This is your opportunity to compare your
current performance against the benchmark
you have discovered. You can then identify
performance gaps and their causes.

LIMITATIONS to consider
It is a difficult, time-consuming and
expensive process.
It requires a high level of commitment, and
in fact is only used in a few places.
For effective results, the process must be
ongoing.
Financial benchmarking is not really
useful.
Difficult to find comparable benchmarking
partner.
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