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Business Management

Benchmarking Process vs. Benchmarking of Processes

Posted on February 21, 2023 by Sara Kremsar
1210 | 21 Feb 2023
Benchmarking Process vs. Benchmarking of Processes

Benchmarking can be applied to various aspects of an organization's operations, including product quality, customer service, marketing strategies, and financial performance. It can also be used to compare internal processes within an organization, such as HR processes, IT systems, and supply chain management. 

By comparing their processes and performance to those of industry leaders or competitors, organizations can identify gaps and opportunities for improvement. They can then adopt best practices and implement changes to optimize their processes and achieve better results. Benchmarking is a powerful tool that can help organizations stay competitive and adapt to changing market conditions, but it requires careful planning, execution, and analysis to be effective.

To effectively utilize benchmarking, it is crucial to distinguish between two frequently used terms: benchmarking process and benchmarking of processes. This differentiation enables organizations to choose the most suitable benchmarking approach and attain their desired goals for enhancing performance.



OVERVIEW   

While these terms may seem similar, understanding the distinction between them is crucial for organizations looking to use benchmarking effectively. 

The benchmarking process is the overall approach or methodology organizations use to compare their practices and processes with those of other organizations. This process involves identifying the key performance indicators and best practices, researching and selecting appropriate benchmarking partners, collecting and analyzing data, identifying gaps and opportunities, and developing and implementing improvement plans.

On the other hand, benchmarking of processes is the specific act of comparing one or more of a company's processes with those of other organizations. This type of benchmarking may focus on a particular process, such as supply chain management or customer service, and involves collecting data on specific metrics such as cycle time, error rates, or customer satisfaction scores.



BENCHMARKING PROCESS

As mentioned above, a benchmarking process is a systematic approach with several critical steps. Companies should define their objectives and evaluate their situation by assessing the performance of other organizations. Comprehensive monitoring and seeking expert guidance can help establish new procedures. To ensure effectiveness, benchmarking should be integrated as a continuous improvement process, with a scope aligned to the organization's context and measures related to the activity being investigated. The cyclical nature of benchmarking requires regular reviews to assess strategic objectives. This tool is essential for identifying areas for improvement and achieving success in today's business environment.

There are several procedures for implementing benchmarking, such as the Camp Methodology by Robert Camp (1989), which includes five steps and twelve phases. Another procedure by Chang and Kelly (1994) involves seven steps. Reider (2000), Dregolea and Cotîrlea (2009), and Watson (1992) outline four key steps, while Jackson and Lund (2000) suggest eight steps. Goncharuk and Getman (2012) propose a procedure based on Camp's (1989) method, consisting of six steps: determining the object of comparison, selecting benchmarking partners, planning the implementation, researching and analyzing information, preparing and implementing measures, and evaluating and following up.

Although these procedures were developed several years ago, they continue to serve as the primary guides for benchmarking processes, either individually or combined.

We usually like to focus on the procedure presented in their work by Goncharuk and Getman (2012), which is based on Camp's (1989) procedure, which is understandable since it represents the starting point for all further divisions that have developed over time.

The procedure mentioned above consists of six steps that follow one another:

  1. determination of the object of comparison
  2. selection of benchmarking partners (companies whose processes we will compare, for which we need to understand the current condition, as this makes it easier for us to choose),
  3. planning the implementation of benchmarking,
  4. research and analysis of information (where we examine the collected information),
  5. preparation and implementation of measures and
  6. evaluation and follow-up.



CONCLUSION

In conclusion, benchmarking is a valuable process for organizations to identify areas where they can improve their efficiency and effectiveness by learning from the best practices of other companies. The process of benchmarking consists of several phases and steps, and there are various procedures and methods to implement it, each with its strengths and weaknesses. To ensure the effectiveness of benchmarking, it should be a continuous improvement process rather than a one-off event. Proper planning, careful monitoring of processes, and thorough analysis of data are critical for successful benchmarking. Overall, benchmarking can help organizations align their processes with industry standards, increase their competitiveness, and achieve better business results.



QUESTION:

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