Name: Chime Chinedu

Week 7: Benchmarking for project success

Assignment Name: HIA
Introduction
Organisations have realised that information systems (IS) do not just provide a service, but contribute
to their overall performance; Marnewick (2015), citing Bennington and Baccarini (2004). IS projects
like network security systems and enterprise resource planning systems are entrenched in the day-today running of organisations and aid in the realisation of the vision and strategies of the organisation
as they strive to stay competitive in their respective markets; Marnewick (2015), citing Buchta et al.
(2007).
Despite huge spendings in deploying these systems, most organisations have failed to reap is full
benefits, which includes process improvements and cost benefits. This has led to firms world-wide to
adopt benchmarking. According to Ajelabi & Tang (2010), benchmarking is a learning process to find
better ways of doing things; in this case, deploying and effective use of an IS to effectively improve
processes. For example, our IS has a video-conferencing function, this can help reduce travel and
hotel costs, and save time to get the job done; time spent travelling can be used in making video calls.
Types of benchmarking to adopt
Before an organisation benchmarks, they must recognise their shortcomings in any business or
functional area, and acknowledge that another body is doing a better job, learn how it is being done,
and then implement it in their own organisation; Ajelabi & Tang (2010).
In my years of experience, I have witnessed my organisation use the following form of benchmarking:
Internal benchmarking: It is the process of identifying, sharing, and using the knowledge and practices
within ones own organisation; Ronco (2012), citing ODell and Jackson (1998). We have done this
severally in our organisation, between the engineering and administration division, and between
Electrical and Mechanical units, which helped us in achieving accelerated learning within the
organisation because the improvement cycle was shortened. For example, procurement processes
between the two divisions were once compared, and it was found that the engineering division was
more efficient because their procurement software had a menu which stored vendors contacts and
their all-time performance during contracts; making supply faster and more cost effective because of
getting the right quality at the right time and price. It let them know who was reliable to be contracted
to supply what goods or service. It was unlike the administration division who took longer to source
for the same products time and over.
Generic benchmarking: Is when we compare performance and best processes of organisations,
regardless of the industries; Ajelabi & Tang (2010). Here, the industries are different (example,
automobile and banking); while the process is compared are the same (billing process). Though one
might think it is expensive to do due to high costs in travel expenses, and call costs due to the long
distances between the organisations, it allows easy access to information because there is no conflict
with the competitor; Galletti et al. (2010).This can help us identify additional opportunities for
improvement (which has been applicable in another industry) beyond the scope of the benchmark
project. We added value and saved contract costs after we found out that servers bought by good
performing banks for their network system had a reduction of $100 per server for maintenance

purpose per year, for their contracts included a three-year maintenance agreement, unlike we who
bought from separate contractors, and used another vendor for maintenance purpose.
Ronco (2012) also asks organisations to watch out when using this benchmarking style, for even when
there is an agreement to identify best practices, differences in organisational culture and structure
might make a practice or process acceptable in one firm, hard to be transportable to the other. Imagine
a culture that values individualism and more risk taking trying to incorporate a unionism culture from
another firm.
Competitive benchmarking: is believed to be the most difficult benchmarking to complete, and
involves a comparison process with a direct competitor; Galletti et al. (2010). Its cost includes
conducting researches to identify the right potential benchmarking partners, gathering and analysing
data which might not be forthcoming without assurance of its accuracy because of the threat of
outperforming the competitor.
It helps in establishing market-driven goals and purchase avoidance. The accounts unit had intended
in updating desktop systems every three years due to system upgrades, but found out through
competitors, that the systems met the minimum system requirements for the software.
Performance metrics
Various performance metrics can be applied to determine IS behaviour and performance in helping the
organisation achieving its goals. It includes overall satisfaction of users, availability and meantime
between failures, average cost per incident, IT investment in ratio to assets among others. But an
important thing is to identify the total cost of ownership (TCO) of deploying the system.
TCO, which can also aid us in comparing different IS vendors, is the systematic quantification of all
costs generated over the lifetime of an IS project; that is, purchase cost, and other recurring costs like
integration, training, support and maintenance costs; Jasilionien & Tamoinien (2009).
If it involves network security, we can use network cost efficiency where we measure network cost
control and user satisfaction through network reliability, which can also be used to identify and
compare cost and reliability issues with best-in-class competitors during benchmarking; Galletti et al.
(2010).
Conclusion
Since benchmarking can be seen as a systematic and rigorous measurement technique used in gaining
and maintaining sustainable competitive advantage; Haverty & Gorton (2006), apart from having a
visionary leader to handle benchmarking process, organisations should strive to create a culture
(through training and effective communication) to enable entire staff and management understand that
benchmarking is a strategic tool they can use in attaining superior performance by satisfying
customers with the best products and services, hereby having a competitive edge; Cruceru (2013).
They could also use reward systems to gain buy-in from sensed resistors by rewarding them for not
only sharing knowledge, buy accepting to adopt any changes that might arise.
Reference:
Ajelabi, I. & Tang, Y. (2010). The Adoption of Benchmarking Principles for Project Management
Performance Improvement. International Journal of Managing Public Sector Information and
Communication Technologies. Vol. 1, No. 2, 1-8.

Cruceru, AF 2013, 'Benchmarking - a method of improving organizational

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Marnewick, C 2015, 'Benefits of information system projects: The tale of two
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Ronco, SL 2012, 'Internal Benchmarking for Institutional Effectiveness', New Directions For
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July 2015.