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BENCHMARKING
Department of Human Resource Management
Faculty of Commerce and Management StudiesUniversity of Kelaniya
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Group Members
G.M.U.I. Gunasinghe BM/2007/079 A.K.S. Gunawardena BM/2007/083
S.J.L. Madusanka BM/2007/146
P.A.P.K. Panangala BM/2007/171
B.C.R. Perera BM/2007/176
R.M.A.N.I. Rajakaruna BM/2007/202
D.K.D. Rangani BM/2007/214
R.P.S.R. Shashikala BM/2007/248 T.S.M. Silva BM/2007/253
M.D.S. Sharmila BM/2007/316
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Outline
Introduction of Benchmarking Purpose of Benchmarking
Types of Benchmarking
Process of Benchmarking Advantages of Benchmarking
Drawbacks of Benchmarking
Conclusion
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Introduction
Benchmarking is the systematic process of
comparing business processes and
performance metrics to industry best
practices in terms of quality time and costdimensions and making such comparisons the
basis to do things better, faster, and cheaper.
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Purpose of Benchmarking
Comparing an organizations performance to
the best organizations performance
Comparing an organizations business process
with similar process
Comparing product and services
Identify the best practices to implement
Projecting trends
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Types of Benchmarking
Benchmarking
InternalBenchmarking
CompetitiveBenchmarking
FunctionalBenchmarking
Generic (BestPractice)
Benchmarking
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Internal Benchmarking
Defined it as performance comparison ofunits or departments within one
organization. Most Appropriate for the Several businessunits within the same organization .
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Competitive Benchmarking
Direct comparison of a company's own
performance against its competitors.
Most Appropriate for the assessing relativelevel of performance in key areas or
activities in comparison with others in the
same sector and finding ways of closing gaps
in performance.
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Functional benchmarking
A company will focus its benchmarking on a
single function in order to improve the
operation of that particular function
It compares specific business functions
amongst at least two different organizations in
the same or different industry
Higher chances of breakthrough as thefunctions are similar and comparison is with
best in class.
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Generic Benchmarking
Method of comparing the performance and
processes of organizations in unrelated
industries. It involves analysis across industries
It can often result in an organization's
drastically altering its ideas about its
performance capability.
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Benchmarking Process
To be successful, company needs to evaluateits performance in a consistent manner.
Need to measure their processes andperformance against recognized, industry
leaders or against best practices
To achieve the objectives of the organizations,need a process.
It is indeed invaluable in an organization's forcontinuous improvement.
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Stages of the Benchmarkingprocess
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Planning
stage What are included?
01 1.Identify what is to be
benchmarked
2.Identify comparative companies
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Identify comparative companies
Choose an appropriate benchmark against
which their performance can be measured.
Measures and practices used in comparative
companies should be identified. In order to carry out the benchmarking
process; should appointed a leader, as to
ensure the smooth, timely implementation of
the project.
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Data collection
Involves creating a plan for collecting
data from selected targets
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Factors which must consider when
collecting data:-
Determine what are the simplest and the mostdifficult data sources.
Decide which combination of the four types ofsources
(internal, published, external, original research) Proceed by preparing an introduction survey from
a checklist of topics to be covered.
Then send the preliminary survey to the contact
person . Prepare a site visit plan and send a summary of the
topics that will be covered to the contact person.
Obtaining information from a competitor, avoid
any possibility of misrepresentation
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Analysis
Analysis consist of two aspects
Determine competitive gap
Project future performance levels
There are five phases in this step
Data analysis
Data presentation
Root cause analysis
Result projection
Enabler identification
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Implement plans and monitor
results Executing the approved best-practice
procedures
Closely observed the process in whichdeviations from the plan will be corrected
So the ultimate goals are achieved
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CONT
Have timeline charts been created?
Have control charts been created?
Has any variance from the plan been
manage with effectively? Has final evaluation been made of the
benchmarking process?
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Advantages Of Benchmarking
Compare themselves with others to identifyown comparative strength and weaknesses.
To understand and evaluate the currentposition of a business or organisation.
Generate both incremental changes and wide-ranging strategic reforms for an organisation.
Enabling organizations to outperform theircompetitors.
Educational process, allowing companies tosee what other operators are doing.
Improve the day to day management of thebusiness.
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Disadvantages of Benchmarking
Increase the diversity of information so the
potential for information overload May reduce managerial motivation when
comparing with a better resourced rival
Remains inadequate to measure the overall
effectiveness
Does not consider the circumstances under
which the competitors attained such standards.
Danger of complacency and arrogance Only a means to an end, and it is worthless if
not accompanied by a plan to change
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Conclusion
It is clearly evident, benchmarking can add
value to the organization's workflow and
structure, by identifying areas for
improvement and adaptation. It is indeed invaluable in an organization to
seek for continuous improvement.
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CONT..
Successful benchmarking requires three basicingredients
a real problem with management willing to
solve itaccess to benchmarking partners who havepreviously resolved that problema knowledgeable benchmarking team with theability to use quality tools and research practices
to investigate process problems to their rootcause
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