Benchmarking with competitive products, services and technologies

1. BENCH MARKINGBENCH MARKING
Professor, Entrepreneur & Lawyer.
Puttu Guru Prasad,
M.Com. M.B.A., L.L.B., M.Phil. PGDFTM.
AP.SET., ICFAI TMF., (PhD) at JNTUK.
Senior Faculty for Management Science,
S&H Department, VVIT, Nambur, NSS P.O
My Blog: puttuguru.blogspot.in
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4. What is Benchmarking?What is Benchmarking?
Benchmarking is a process of
measuring the performance of a
company’s products, services, or
processes against those of
another business considered to
be the best in the industry, aka
“best in class.”

5. What is Benchmarking?What is Benchmarking?
The point of benchmarking is to identify
internal opportunities for improvement. By
studying companies with superior
performance, breaking down what makes
such superior performance possible, and
then comparing those processes to how your
business operates, you can implement
changes that will yield significant
improvements.

7. BENCHMARKING: WHAT IS
IT?
It can be defined as a process for
improving performance by constantly
identifying, understanding and adapting
best practices and process followed inside
and outside the company and
implementing the results.
The main emphasis of benchmarking is
not on “best performance” but on
improving a given business operation or a
process by exploiting “best practices”

8.  “Benchmarking is an
ongoing outreach activity;
the goal of the outreach is
identification of the best
operating practices that,
when implemented,
produce superior
performance”
- Bogan and English ,
Benchmarking for best
practices.
BENCHMARKING: WHAT IS
IT?

9. Benchmark refers to a measure of
best practice performance.
Benchmarking is the systematic
search for best practices, innovative
ideas and highly effective operating
procedures.
It measures performance against
that of the “ best-in-the-class”
organization.
BENCHMARKING: WHAT IS IT?

10. THE EVOLUTION OF BENCHMARKING
 The benchmarking processes may have
evolved in the 1950s when W.EDWARDS
DEMING taught the idea of quality control
to the Japanese.
The method was rarely used in the United
States until the early 1980s, when IBM,
Motorola and Xerox became the best
known example for using benchmarking
processes.

11. THE EVOLUTION OF BNCHMARKING
TIME TYPE DESCRIPTION
First generation Reverse Engineering RE is the process of
discovering the
technological principles
of a device, object or
system through the
analysis of its structure,
function & operation
Second generation Competitive
benchmarking
Continuous process of
comparing a firm’s
practices and
performance measures
with that of its most
successful competitor

12. TIME TYPE DESCRIPTION
Third generation Process benchmarking The initiating firm
focuses onits observation
and investigation of
business processes with
a goal of identifying and
observing the best
practices from one or
more benchmarked firms
Forth generation Strategic benchmarking Involves observing how
others compete
Fifth generation Global benchmarking Benchmarking with the
partners across the globe

13. ADVANTAGES OF BENCHMARKING
 Identify current position and
determining priorities for improving
environment performance
Allowing comparisons
Encouraging regular monitoring of
progress & a process for continuous
improvement
Increasing competitiveness of
organization

14. TYPES OF
BENCHMARKING
STRATEGIC BENCHMARKING
PERFORMANCE BENCHMARKING
PROCESS BENCHMARKING
FUNCTIONAL BENCHMARKING
INTERNAL BENCHMARKING
EXTERNAL BENCHMARKING
INTERNATIONAL BECHMARKING

15. STRATEGIC BENCHMARKING
 It is used where businesses need to
improve overall performance by
examining the long term strategies and
general approaches that have enabled
high performers to succeed.
It involves considering high level aspects
such as core competencies.
This type of benchmarking is suitable
when the company has to realign
business strategies that have become
inappropriate.

16. PERFORMANCE BENCHMARKING
 Also know as COMPETITIVE BENCHMARKING
 It is used when organizations consider
their positions in relation to performance
characteristics of key products and
services.
Benchmarking partners are usually drawn
from the same sector.
This type of benchmarking is suitable for
assessing relative levels of performance in
key areas or activities in comparison with
others in the same sector to find ways of
closing gaps in performance.

17. PROCESS BENCHMARKING
 It is used by the organization when the
focus is on improving specific critical
processes and operations
Benchmarking partners are sought from
best practice organization and are drawn
from the same sector.
 This type of benchmarking is suitable for
achieving improvements in key
processes to obtain quick and short term
benefits.

18. FUNCTIONAL BENCHMARKING
 Also known as GENERIC BENCHMARKING
 It can lead the organization to innovation &
dramatic improvements.
 It is used when organizations look to benchmark
with partners drawn from different business
sectors or areas of activity.
 This type of benchmarking is suitable for
improving activities or services for which
counterparts do not exist.

19. INTERNAL BENCHMARKING
 It involves seeking partners from within the
same organization & from business units
located in different regions.
 The main advantages are access to sensitive
data & information, availability of standardized.
 This type of benchmarking is suitable when
several business units within the same
organization exemplify good practice and
management and want to spread this expertise
quickly throughout the organization.

20. EXTERNAL BENCHMARKING
 It involves analyzing outside
organizations that are known to be the
best in the class.
It provides opportunities of learning from
those who are at the “learning edge”.
This type of benchmarking is suitable
where examples of good practices can
be found in other organization and there
is a lack of good practices within internal
business units.

21. INTERNATIONAL BECHMARKING
 This is used when the best practitioners are
located in other countries. This is due to
globalization and advances in information
technology.
 There is a need for careful analysis &
interpretation due to national differences.
 This type of benchmarking is suitable where the
aim is to achieve world class status or simply
because
there are insufficient “national” businesses
against which to benchmark.

22. BenchmarkingBenchmarking
ProcessProcess

23. Benchmarking ProcessBenchmarking Process

24. LIMITATION TO BENCHMARKING
 Benchmarking is a tough process that
needs a lot of commitment to succeed.
It is a time consuming and expensive.
More often than not benchmarking
processes end with the “they are different
from us” syndrome or competitive
sensitivity that prevents the free flow of
necessary information.

25. COMMON PITFALLS IN BENCHMARKING
 Lack of management commitment and involvement
 Not applied to critical areas first
 Inadequate resources
 No involvement of the line organization.
 Scope not well defined.
 To many performance measures.
 Critical success factors & performance drivers not understood
or identified.
 Potential partners ignored
 Poorly designed questionnaires.
 Inappropriate data collection method.
 Too much & inconsistent data.
 Analysis paralysis; excess precision.
 Management resistance to change.
 No repeat benchmarking.