Benchmarking tools and practices for twenty-first century competitiveness

Citation

Gunasekaran, A. (2001), "Benchmarking tools and practices for twenty-first century competitiveness", Benchmarking: An International Journal, Vol. 8 No. 2. https://doi.org/10.1108/bij.2001.13108baa.001

Benchmarking tools and practices for twenty-first century competitiveness

Benchmarking tools and practices for twenty-first century competitiveness

Benchmarking is the process of identifying, sharing, and using knowledge and best practices. It focuses on how to improve any given business process by exploiting best practices rather than simply measuring the best performance. Determining, analyzing and implementing best practices provide an opportunity for gaining a strategic, operational, and financial advantage. It reflects continuous improvement efforts that may already exist in an organization and helps to link continuous improvement and breakthrough improvement into a single change management system. While benchmarking readily integrates with strategic initiatives such as continuous improvement, re-engineering and total quality management, it is also a discrete process that delivers value to the organization on its own.

Benchmarking requires exchange of information on best practices. In most cases, companies do not reveal secrets behind their success, in order to protect commercial interests. In the early days, companies carried out benchmarking exercises by extracting information through recruiting people who had the knowledge of best practices and suitable alliances. With the development of information technology such as Internet, EDI and WWW, the exchange of information has become more transparent. It is not just enough to say benchmarking has become more active than ever before with the development of IT. More interactive Web-based data collection and analysis facilitate the benchmarking process more effectively.

IT can be used to develop a benchmarking tool that provides an alternative and paperless technique to collect data rather than by external observations or interview-based data acquisition techniques. IT-enabled benchmarking systems should provide immediate feedback and directly involve participants in the data collection process and ensure the quality and acceptance of study results. It can be used in difficult situations to measure operations in banking, insurance, government and manufacturing. It assists companies in meeting their activity based costing, balanced scorecard, business process re-engineering, employee performance, six sigma and training objectives. Computer-aided benchmarking will also improve the success of process modeling activities.

IT-integrated benchmarking tools will enable quick, easy and accurate measurement of the processes that are key to business success. Together they offer a cost-effective objective and paperless system for data collection and analysis. One of the essential elements of a successful benchmarking program is following a rigorous process. Second, is choosing an optimal benchmarking partner, and third, it requires a understanding of the process being studied and of the benchmarking process itself. These are needed to properly adapt best practices and implement changes to each organization's unique culture.

Multi-client benchmarking projects have numerous benefits: for example, participants can gain first-hand knowledge from leading organizations, network with fellow participants, discover new ideas and fresh perspectives, and obtain implementable knowledge to disseminate within their own organizations. Benchmarking: An International Journal (BIJ) covers activities and addresses topics as diverse as the scope of organizational improvement. The articles focus on knowledge management, leadership, IT, sales, marketing, measurement, new product development, education, shared services, etc.

Best-practice transfer is challenging, as it has to overcome barriers that originate from a lack of motivation to adopt practices and an inadequate process of identifying, understanding, and adapting outstanding practices. The key elements for the success of benchmarking are the lessons learned by best-practice organizations using a well-established methodology, committing to implement the changes required, using an appropriate benchmarking process, empowering the right teams, and selecting the right partner.

External benchmarking is required to set up realistic expectations; measuring against competitors keeps people focused on the market. Due to limited resources and time available, companies should focus initial efforts on critical business issues that have high pay-offs and are aligned with organizational values and strategy. Benchmarking is more likely to generate returns when it is driven by strategic objectives. Also, companies limit the number of major projects to accommodate the resources available for implementation.

Senior management support for any change processes including a benchmarking exercise is essential. Companies in which senior management support benchmarking gain more operational benefits and see higher financial returns than do other organizations. As with any process, benchmarking works best when senior management has a deep understanding of it. Culture and behaviors are the key drivers of internal exchange of best practice knowledge. It depends upon the involvement of people, technology used, and incentive to contribution.

IT helps to develop an integrated tool to support networks and the internal search for best practices. A combination of new IT tools can support employees' benchmarking exercises.

BIJ encourages articles from both researchers and practitioners on the tools and practices of benchmarking in the Internet era.

A. Gunasekaran