Hagan School of Business

Whom to Benchmark

We have seen that it is first necessary to decide what process or processes to benchmark. Once this is done, it then needs to be decided if it is necessary to seek the "best of the best" with generic benchmarking, or if it is more advantageous to seek a partner that is considered a "performance success" in an analogous process (Watson, 1993). For institutions that are novices with benchmarking, it is recommended that more "grass-roots" level studies be conducted which measure departmental or administrative unit processes internally or with local external competitors (Marchese, 1995). Same speed partnerships tend to return the highest value, and projects often fail when institutions reach for "too much, too soon." However, institutions that are more advanced in using quality improvement techniques will be able to get more out of benchmarking with "world-class" competitors. No matter which type of benchmarking is going to be conducted, choices have to be made about which other organizations are to be benchmarked against. There is a proven methodology suggested by Robert Camp, which seeks to identify other institutions that might become benchmarking partners because they utilize superior processes that use best practices which could be adapted. The overall methodology for determining with whom to benchmark is to:

1. Develop a candidate list using any and all readily available information and some preliminary research.

2. Reduce the list to a target number of organizations through secondary research focused on the organization and function.

3. Prepare for a contact with the target organization and set up a visit (Camp, 1995).

Suggested places to begin searching for candidates include personal contacts, newspapers, magazines, journals, professional associations, benchmarking consultants, and the Internet. Organizations such as the American Productivity and Quality Center (APQC) in Houston, Texas, founded by companies such as AT&T, IBM, and Xerox, offer a variety of services to begin a benchmarking process, including a database of information on best practices from hundreds of companies.

The Benchmarking Exchange (TBE), a California-based operation and available via the World-Wide Web, is an open service for those who wish to become members, and participants do not have to join any association or special interest group in order take part (TBE, 1995). TBE offers a very comprehensive and user friendly electronic communication and information system designed for use by individuals and organizations involved in benchmarking and process improvement. Participants can see what other organizations have done to launch their benchmarking programs, solicit help from others, contact organizations with whom to conduct a study, or even form a group with member organizations to share in a consortium-type study. The Benchmarking Exchange and The Best Practice Club -- based in Bedford, UK, recently announced a strategic partnership to create a global one-stop on-line information and communication network dedicated to facilitating benchmarking and business excellence (TBC, 1995).

When contacting prospective benchmarking partners, it is suggested that the first communication consist of a very clear, short statement of what processes are to be benchmarked (Dale, 1995). The benchmarking team should demonstrate a clear understanding of what data is willing to be shared, and the opportunity and willingness to establish and maintain an ongoing dialog. The institution soliciting the benchmarking information should also have well selected and trained participants, and a good knowledge of the prospective benchmarking partner. One of the most valuable aspects of a benchmarking project, in addition to obtaining valuable information, is the creation of a new communication network between the organizations. Much of this communication may be somewhat informal, between mid-level managers who can contact each other when needed. It is this kind of communication in which best practices can be discussed, processes can be improved, and valuable inter-organizational relationships nurtured.

Camp, R. C. (1995). Business Process Benchmarking: Finding and Implementing Best Practices. Milwaukee: Quality Press.

Dale, B. (1995, October 30 & 31, 1995). Practical Benchmarking for Colleges and Universities. Paper presented at the AAHE Workshop, Key Biscayne, Florida.

Marchese, T. (1995b). Understanding Benchmarking. AAHE Bulletin, 47(8), 3-5.

TBC. (1995). Internet Link to Business "Secrets" (pp. 1). Bedford, UK: The Best Practice Club.

TBE. (1995). www.benchnet.com: The Benchmarking Exchange, Inc.

Watson, G. H. (1993). Strategic Benchmarking: How To Rate Your Company's Performance Against the World's Best. New York: John Wiley and Sons.