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Benchmarking, performances measurement and sharing
the reward resulting from improved performance
Introduction


What is Benchmarking?
What is a Benchmark?
What is a Key Performance Indicator (KPI)?
Using a Key Performance Indicator
In order to define the KPI’s throughout the life cycle of a project,
five key stages have been identified.
Stage 2: Commit to Construct – the point at which the client authorises the project
team to start the construction project
 
Stage 3: Available for Use – the point at which the project is available for substantial
occupancy or use. This may be in advance of the completion of the project
 
Stage 4: End of the Defects Liability Period – the point at which the period within the
construction contract during which the contractor is obliged to rectify defect ends
(often 12 months from stage 3)
 
Stage 5: End of Lifetime of Project – the point at which the period over which the
project is employed in it’s original or near original purpose ends. As this is usually
many years after the project’s completion, this is a theoretical point over which such
concepts as whole life costing can be applied
Types of benchmarking
Benchmarking can take the form of several different types:
 
Internal benchmarking– a comparison of internal operations such as
one site (or project team) against another within the same company.


Competitive benchmarking – a comparison against a specific
competitor for the product, service or function of interest.


Generic benchmarking – a comparison of business functions or
processes that are the same, regardless of industry or country .
The Benefits of Benchmarking in the
              Construction Industry

Benefits include:
 • Better performance in meeting customer needs &
requirements.
•   Establishing effective business goals and objectives.
•   Measuring true productivity.
•   Becoming competitive
• Identifying & implementing best practice in business
processes
What does successful benchmarking
                 require?
In practice, the main requirements for success are:
• A strong and active commitment from senior management to lead and
implement the benchmarking process
• A willingness to change and adapt based on the benchmarking
findings.
∀• A realisation that the competition is constantly changing.
∀• An openness to new ideas, creativity and innovativeness in their
application to existing processes. • A continuous benchmarking effort.
∀• A willingness to share information with benchmarking partners (e.g.
other organisations)
The Benchmark Themes
Business Process Improvement

Commonly accepted factors of measuring business
excellence:
 •     Leadership
•     Policy & strategy
•     People management
•     People satisfaction
•     Resource management
•     Business Process
•     Customer satisfaction
•     Business results
What are the side effects to successful
                       benchmarking?
Benchmarking has some inadequacies which must be clearly recognised and
understood before continuing the exercise:
 •     Don't try and benchmark too many things to begin with. Select two or
       three key areas, and then gradually add others over time.
•      Don't waste time benchmarking things that are just "nice to know".
Every benchmark should aim to improve performance in an area that
contributes to profits or customer satisfaction.
 •     Be precise in defining what is to be measured. A lack of clarity can
lead   o confusing an inappropriate benchmarks
 •    Test the benchmarks internally before consulting with outside
companies.
 •      Remember that your organisation's priorities may change with time,
        and so your benchmarks should be regularly reviewed (and changed if
        necessary) to reflect this.
5 steps to successful
                        benchmarking
                                   
The five key steps in the benchmarking process are:
 
Plan: Clearly establish what needs to be improved – make sure it is
important to you and your customers – and determine the data
collection methodology to be used (including any KPIs).
Analysis: Gather the data and determine the current performance gap
- against a competitor, the industry or internally – and identify the
reasons for the difference.
 Action: Develop and implement improvement plans & performance
targets.
Review: Monitor performance against the performance targets.
Repeat: Repeat the whole process – benchmarking needs to become
a habit if you are serious about improving your performance.

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Benchmarking (1)

  • 1. Benchmarking, performances measurement and sharing the reward resulting from improved performance
  • 2. Introduction What is Benchmarking? What is a Benchmark? What is a Key Performance Indicator (KPI)?
  • 3. Using a Key Performance Indicator In order to define the KPI’s throughout the life cycle of a project, five key stages have been identified. Stage 2: Commit to Construct – the point at which the client authorises the project team to start the construction project   Stage 3: Available for Use – the point at which the project is available for substantial occupancy or use. This may be in advance of the completion of the project   Stage 4: End of the Defects Liability Period – the point at which the period within the construction contract during which the contractor is obliged to rectify defect ends (often 12 months from stage 3)   Stage 5: End of Lifetime of Project – the point at which the period over which the project is employed in it’s original or near original purpose ends. As this is usually many years after the project’s completion, this is a theoretical point over which such concepts as whole life costing can be applied
  • 4. Types of benchmarking Benchmarking can take the form of several different types:   Internal benchmarking– a comparison of internal operations such as one site (or project team) against another within the same company. Competitive benchmarking – a comparison against a specific competitor for the product, service or function of interest. Generic benchmarking – a comparison of business functions or processes that are the same, regardless of industry or country .
  • 5. The Benefits of Benchmarking in the Construction Industry Benefits include:  • Better performance in meeting customer needs & requirements. • Establishing effective business goals and objectives. • Measuring true productivity. • Becoming competitive • Identifying & implementing best practice in business processes
  • 6. What does successful benchmarking require? In practice, the main requirements for success are: • A strong and active commitment from senior management to lead and implement the benchmarking process • A willingness to change and adapt based on the benchmarking findings. ∀• A realisation that the competition is constantly changing. ∀• An openness to new ideas, creativity and innovativeness in their application to existing processes. • A continuous benchmarking effort. ∀• A willingness to share information with benchmarking partners (e.g. other organisations)
  • 8. Business Process Improvement Commonly accepted factors of measuring business excellence:  • Leadership • Policy & strategy • People management • People satisfaction • Resource management • Business Process • Customer satisfaction • Business results
  • 9. What are the side effects to successful benchmarking? Benchmarking has some inadequacies which must be clearly recognised and understood before continuing the exercise:  • Don't try and benchmark too many things to begin with. Select two or three key areas, and then gradually add others over time. • Don't waste time benchmarking things that are just "nice to know". Every benchmark should aim to improve performance in an area that contributes to profits or customer satisfaction.  • Be precise in defining what is to be measured. A lack of clarity can lead o confusing an inappropriate benchmarks  • Test the benchmarks internally before consulting with outside companies.  • Remember that your organisation's priorities may change with time, and so your benchmarks should be regularly reviewed (and changed if necessary) to reflect this.
  • 10. 5 steps to successful benchmarking   The five key steps in the benchmarking process are:   Plan: Clearly establish what needs to be improved – make sure it is important to you and your customers – and determine the data collection methodology to be used (including any KPIs). Analysis: Gather the data and determine the current performance gap - against a competitor, the industry or internally – and identify the reasons for the difference. Action: Develop and implement improvement plans & performance targets. Review: Monitor performance against the performance targets. Repeat: Repeat the whole process – benchmarking needs to become a habit if you are serious about improving your performance.