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Benchmarks can be very effectively and efficiently used for improvement in

productivity and profitability. The basic requirement is a proper selection of


benchmark, which can be done easily.
Sent at 7:35 PM on Saturday
charu8521: A major limitation of benchmarking is that while it helps organizations in measuring the efficiency of
their operational metrics, it remains inadequate to measure the overall effectiveness of such metrics.
Benchmarking reveals the standards attained by competitors but does not consider the circumstances under
which the competitors attained such standards. If the competitor’s goals and visions were flawed or severely
restricted due to some specific factor, an organization by benchmarking such standards runs the risk of trying to
ape such flawed standards or settling for extremely low standards.

A bigger disadvantage of benchmarking is the danger of complacency and arrogance. Many organizations tend
to relax after excelling beyond competitors' standards, allowing complacency to develop. The realization of
having become the industry leader soon leads to arrogance, when considerable scope for further improvements
remains.

Finally, many organizations make the mistake of undertaking benchmarking as a stand-alone activity.
Benchmarking is only a means to an end, and it is worthless if not accompanied by a plan to change.

Comparing the pros and cons of benchmarking, the advantages of benchmarking overshadow disadvantages.
The 2008 Global Benchmarking Network survey finds organizations preferring benchmarking over any other
performance analysis tools, including SWOT. Most organizations include benchmarking as a part of continuous
improvement initiatives such as Total Quality Management and Six Sigma.

Read more: http://www.brighthub.com/office/entrepreneurs/articles/82292.aspx#ixzz15AlkJohU


Sent at 7:55 PM on Saturday
charu8521: Performance Improvement

A primary advantage of benchmarking is that it sets the foundation of performance improvement aimed at
enhancing competitiveness. By showing how to better competitors, benchmarking ensures the basic survival of
the business.

Benchmarking identifies best practices in key business processes and determines what constitutes superior
performance. It then quantifies the gap between the expected performance and the actual state; in the process it
drives home uncomfortable facts and harsh realities about the business. This provides the organization with both
the reason to improve and a definition of what constitutes improvement.

New Paradigms

A permanent benchmarking program forces organizations out of their comfort zones and provides specific and
measurable short-term improvement plans based on current reality rather than historical performance.

Very often, organizations set goals based on past trends and established internal patterns. Benchmarking helps
remove such “paradigm blindness” and forces the organization to take a fresh approach to goal setting based on
a broader perspective, including the external perspective, the most critical factor that drives customer
expectations.

Change

Benchmarking help place organizational focus on change and provides the direction for the change process.

Benchmark heralds change by:

Making explicit the competitors' standards that provide the organization with minimum standards of excellence.
Providing new ideas and better ways of doing things.
Benchmarking opens minds to new ideas, heralding a process of continuous learning that leads to a learning
organization.

Read more: http://www.brighthub.com/office/entrepreneurs/articles/82292.aspx#ixzz15AmUSpjL


rahulmania: Limitations of benchmarking
Benchmarking is a tough process that needs a lot of commitment to succeed.
Time-consuming and expensive.
More than once benchmarking projects end with the 'they are different from us' syndrome or competitive
sensitivity prevents the free flow of information that is necessary.
Comparing performances and processes with 'best in class' is important and should ideally be done on a
continuous basis (the competition is improving its processes also...).
Is the success of the target company really attributable to the practice that is benchmarked? Are the companies
comparable in strategy, size, model, culture?
What are the downsides of adopting a practice?
rahulmania is busy.
Sent at 7:20 PM on Saturday
rahulmania: The main problem with benchmarking is the focus on data - and not the processes used to make that
data. Benchmarking should be used as a guide, not for statistical precision.

* Focusing on the numbers - Greg Hackett's Ohio-based firm is a leader in benchmarking services. He claims the
value of benchmarking is understanding the process that produces the given data, and formulating ways for the
organization to adopt these practices. Hackett says many finance executives are "sucked into the numbers."

* Lacking clarity on data origination - Another benchmarking limitation is not understanding the data's source,
which can cause comparison errors. For example, an organization may want to compare their head count in the
treasury management process to the benchmarked organization's. The benchmarked organization may consider
cash management, foreign exchange, and real estate part of the treasury; the other organization may not.
Therefore, organizations define the treasury management process in different ways.

According to Pat Jones, corporate controller at Intel Corp., in Portland, Oregon, his company's benchmarking
efforts were not a success. It, too, had a problem with clarity on where the data originated. "To ensure we were
doing apples-to-apples comparisons, we had to spend a lot of time reconciling the data," Jones says. "It was
incredibly unproductive."

* Losing focus on customers and employe


Sent at 7:25 PM on Saturday
rahulmania:
Organizations and companies use benchmarking to determine where inputs, processes, outputs, systems, and
functions are significantly different from those of competitors or others.

http://www.allbusiness.com/management/640193-1.html
Sent at 7:38 PM on Saturday
rahulmania: What Does Benchmarking Do?

That’s where benchmarking comes in. Benchmarking measures the actual performance of an IT configuration, be
it a storage subsystem, CPU or application software. Contrasted with modeling (which attempts to predict a
result), benchmarking is the validation of a performance model or hypothesis. Like the state of Missouri’s motto,
benchmark testing is the way to “show me” real results. When managers are looking for actual numbers,
benchmarking provides them.

Benchmarking, in general, establishes a point of comparison and is present in many daily activities. Benchmark
comparisons can be subjective or objective, and qualitative or quantitative. Subjective and qualitative
comparisons may generate statements such as “I don’t like sushi” to “Vendor A’s management software is easier
to use.” Objective and quantitative comparisons are more along the lines of “The average home in Madison, Wis.,
is 109 percent of the cost of a similar home in Austin, Texas.

http://www.12manage.com/methods_benchmarking.html
Sent at 7:15 PM on Saturday
charu8521: Benchmarks can be very effectively and efficiently used for improvement in
productivity and profitability. The basic requirement is a proper selection of
benchmark, which can be done easily.
Sent at 7:35 PM on Saturday
charu8521: A major limitation of benchmarking is that while it helps organizations in measuring the
efficiency of their operational metrics, it remains inadequate to measure the overall effectiveness of
such metrics. Benchmarking reveals the standards attained by competitors but does not consider the
circumstances under which the competitors attained such standards. If the competitor’s goals and
visions were flawed or severely restricted due to some specific factor, an organization by
benchmarking such standards runs the risk of trying to ape such flawed standards or settling for
extremely low standards.

A bigger disadvantage of benchmarking is the danger of complacency and arrogance. Many


organizations tend to relax after excelling beyond competitors' standards, allowing complacency to
develop. The realization of having become the industry leader soon leads to arrogance, when
considerable scope for further improvements remains.

Finally, many organizations make the mistake of undertaking benchmarking as a stand-alone activity.
Benchmarking is only a means to an end, and it is worthless if not accompanied by a plan to change.

Comparing the pros and cons of benchmarking, the advantages of benchmarking overshadow
disadvantages. The 2008 Global Benchmarking Network survey finds organizations preferring
benchmarking over any other performance analysis tools, including SWOT. Most organizations
include benchmarking as a part of continuous improvement initiatives such as Total Quality
Management and Six Sigma.

Read more: http://www.brighthub.com/office/entrepreneurs/articles/82292.aspx#ixzz15AlkJohU


Sent at 7:55 PM on Saturday
charu8521: Performance Improvement

A primary advantage of benchmarking is that it sets the foundation of performance improvement


aimed at enhancing competitiveness. By showing how to better competitors, benchmarking ensures
the basic survival of the business.

Benchmarking identifies best practices in key business processes and determines what constitutes
superior performance. It then quantifies the gap between the expected performance and the actual
state; in the process it drives home uncomfortable facts and harsh realities about the business. This
provides the organization with both the reason to improve and a definition of what constitutes
improvement.

New Paradigms

A permanent benchmarking program forces organizations out of their comfort zones and provides
specific and measurable short-term improvement plans based on current reality rather than historical
performance.

Very often, organizations set goals based on past trends and established internal patterns.
Benchmarking helps remove such “paradigm blindness” and forces the organization to take a fresh
approach to goal setting based on a broader perspective, including the external perspective, the most
critical factor that drives customer expectations.

Change

Benchmarking help place organizational focus on change and provides the direction for the change
process.

Benchmark heralds change by:

Making explicit the competitors' standards that provide the organization with minimum standards of
excellence.
Providing new ideas and better ways of doing things.
Benchmarking opens minds to new ideas, heralding a process of continuous learning that leads to a
learning organization.
Read more: http://www.brighthub.com/office/entrepreneurs/articles/82292.aspx#ixzz15AmUSpjL

rahulmania: Limitations of benchmarking


Benchmarking is a tough process that needs a lot of commitment to succeed.
Time-consuming and expensive.
More than once benchmarking projects end with the 'they are different from us' syndrome or
competitive sensitivity prevents the free flow of information that is necessary.
Comparing performances and processes with 'best in class' is important and should ideally be done
on a continuous basis (the competition is improving its processes also...).
Is the success of the target company really attributable to the practice that is benchmarked? Are the
companies comparable in strategy, size, model, culture?
What are the downsides of adopting a practice?

Sent at 7:20 PM on Saturday


rahulmania: The main problem with benchmarking is the focus on data - and not the processes
used to make that data. Benchmarking should be used as a guide, not for statistical precision.

* Focusing on the numbers - Greg Hackett's Ohio-based firm is a leader in benchmarking services. He
claims the value of benchmarking is understanding the process that produces the given data, and
formulating ways for the organization to adopt these practices. Hackett says many finance executives
are "sucked into the numbers."

* Lacking clarity on data origination - Another benchmarking limitation is not understanding the data's
source, which can cause comparison errors. For example, an organization may want to compare their
head count in the treasury management process to the benchmarked organization's. The
benchmarked organization may consider cash management, foreign exchange, and real estate part of
the treasury; the other organization may not. Therefore, organizations define the treasury
management process in different ways.

According to Pat Jones, corporate controller at Intel Corp., in Portland, Oregon, his company's
benchmarking efforts were not a success. It, too, had a problem with clarity on where the data
originated. "To ensure we were doing apples-to-apples comparisons, we had to spend a lot of time
reconciling the data," Jones says. "It was incredibly unproductive."

* Losing focus on customers and employe

Sent at 7:25 PM on Saturday


rahulmania:
Organizations and companies use benchmarking to determine where inputs, processes, outputs,
systems, and functions are significantly different from those of competitors or others.

Sent at 7:37 PM on Saturday


rahulmania: http://www.allbusiness.com/management/640193-1.html
Sent at 7:38 PM on Saturday
rahulmania: What Does Benchmarking Do?

That’s where benchmarking comes in. Benchmarking measures the actual performance of an IT
configuration, be it a storage subsystem, CPU or application software. Contrasted with modeling
(which attempts to predict a result), benchmarking is the validation of a performance model or
hypothesis. Like the state of Missouri’s motto, benchmark testing is the way to “show me” real results.
When managers are looking for actual numbers, benchmarking provides them.
Benchmarking, in general, establishes a point of comparison and is present in many daily activities.
Benchmark comparisons can be subjective or objective, and qualitative or quantitative. Subjective and
qualitative comparisons may generate statements such as “I don’t like sushi” to “Vendor A’s
management software is easier to use.” Objective and quantitative comparisons are more along the
lines of “The average home in Madison, Wis., is 109 percent of the cost of a similar home in Austin,
Texas.

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