BENCHMARKING METHODOLOGY

There is no single best way to approach a benchmarking cycle. However, it is important that all benchmarking activity be conducted in a disciplined, coordinated manner, in order to ensure the accuracy of the study.

Benchmarking can be effectively divided into four major phases:

Phase I - Organization and Planning

Organizing and planning the benchmarking process is the most important phase; it's the foundation that determines whether benchmarking activities will produce truly effective insights, or merely interesting but relatively meaningless data.

Planning the benchmarking cycle requires that you first thoroughly understand your company's internal processes and measurements, then determine what to benchmark; organize and structure the project; choose benchmarking partners; and decide how you will go about conducting the study.

Phase II - Data Collection

This phase involves selecting methods for collecting benchmark data, and collecting that information.

Phase III - Analysis

Analyzing the benchmarking data that you've collected will help you determine your current performance gap, project future performance levels realistically, and identify best practices for achieving them.

Phase IV - Action

The benchmarking process concludes with setting goals and making recommendations for change. The benchmarking data that you've collected and analyzed will enable you to create realistic, granular action plans, and monitor progress toward your goals.