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Four Ways to Make Benchmarking Useful

Benchmarking tends to result in a high effort exercise with very little to show for it. If you want to undertake benchmarking, there's a right way to go about it.
Close ups of segments of parallel measuring tapes

By Chally Kacelnik

When it comes to benchmarking, I tend to feel a little trepidation.

It’s usually undertaken for something like a long list of service fees, where the organisation wants to know whether what they are charging is comparable with that of competitors or similar organisations. This has some utility, but it’s not a good basis for fee-setting. Particularly in sectors like local government, you ought to be able to justify your fees on the basis of factors like service provision costs and community value, not what the other guy is doing.

Benchmarking tends to result in a high effort exercise with very little to show for it. Don’t let it happen to you. If you want to undertake benchmarking, there’s a right way to go about it.

Here are four factors to consider when you are benchmarking:

  • Putting it in context: Are you undertaking benchmarking as part of a broader environmental scan? Are you selecting the benchmarking measures according to what will help you better position your organisation to meet its goals, or are you just selecting comparison points based on available data? What are you doing to make sure that you can usefully interpret the data? Are you selecting your benchmarking partners on a consistent and meaningful basis?
  • Examining the service performance: Are you looking at lessons you can learn from the actual efficacy of other organisations’ performance, using factors like satisfaction, resolution rates, complaint rates, delivery channel utilisation, and first point of contact resolution rates? Or are you looking at lists of facts that you cannot translate into useful lessons for your organisation, like the number of phone calls taken?
  • Considering service design: Are you looking at the models, structures, technologies, resourcing, and underlying philosophies that are driving the success (or otherwise)? Are you usefully linking the service performance data to the actual practices employed by each organisation, and taking lessons that you can apply at your own workplace?
  • Being strategic: Focus on high value and high impact factors – like services with big expenses attached or that are highly sensitive for customers. The positive effects of tackling these factors will snowball, you’ll be able to start to make useful changes quickly, and you’ll minimise decision fatigue

The long and the short of it is that benchmarking is just a tool like any other. It’s more powerful if you’re clear on how you’re going to use it and why.

At LKS Quaero, we help our clients to equip themselves with useful tools and knowledge for obtaining their organisational objectives. For more information, visit us at lksquaero.com or follow us on LinkedInFacebook, and Twitter.

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