Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests and/or best practices from other industries. It’s a valuable tool for any Program Manager (PM) to determine if there are any areas or processes in their program that can be improved upon by understanding how they compare with other organizations. Typical performance metrics used are quality, time, and cost. [2]

Definition: Benchmarking is the process of identifying, sharing, and using knowledge and best practices. It focuses on how to improve and given business processes by exploiting top-notch approaches rather than merely, ensuring the best performance. Finding, studying, and implementing best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage. (American Productivity and Quality Center)

Benchmarking in Acquisitions

The Clinger-Cohen Act mandates the DoD examine all new acquisition program processes for optimum effectiveness and efficiency. They call this examination Business Process Reengineering (BPR) which benchmarking is a tool to be used.

Benchmarking is necessary for outcome selection and BPR. The Sponsor/Domain Owner should quantitatively benchmark agency outcome performance against comparable outcomes in the public or private sectors in terms of cost, speed, productivity, and quality of outputs and outcomes. It should occur in conjunction with a BPR implementation well before program initiation.

Benchmarking Phases

Benchmarking can be broken down into four (4) primary phases: [1]

1. Planning Phase: Identify the product or process to be benchmarked and select the organizations to be used for comparison. Identify the type of benchmark measurements and data to be gathered (both qualitative and quantitative data types). One method to gather data is through a questionnaire to the benchmarking organization that specifically addresses the area being benchmarked.
2. Data Collection and Analysis Phase: Initiate the planned data collection, and analyze all aspects of the identified best practice or IT innovation to determine variations between the current and proposed products or processes. Compare the information for similarities and differences to identify improvement areas. Use root cause analysis to break the possible performance issues down until the primary cause of the gap is determined. This is where the current performance gap between the two benchmarking partners is determined.
3. Integration Phase: Communicate the findings; establish goals and targets; and define a plan of action for change. This plan of action is often the key to successful BPR implementation. Qualitative data from a benchmarking analysis is especially valuable for this phase. It aids in working on change management issues to bring about positive change.
4. Implementation Phase: Initiate the plan of action and monitor the results. Continue to monitor the product or process that was benchmarked for improvement. Benchmark the process periodically to ensure the improvement is continuous.

Stages of Benchmarking

The 12 stages of benchmarking were developed by Robert Camp in 1989. These stages are:

• Stage 1: Select subject
• Stage 2: Define the process
• Stage 3: Identify potential partners
• Stage 4: Identify data sources
• Stage 5: Collect data and select all partners
• Stage 6: Determine the gap
• Stage 7: Establish process differences
• Stage 8: Target future performance
• Stage 9: Communicate
• Stage 10: Adjust goal
• Stage 11: Implement
• Stage 12: Review and recalibrate

Consortium Benchmarking Approach

High-level participation from a group focused on improvement and analysis of a benchmarking study. A consortium is a great way to expand a benchmarking study to capture participation from many other organizations across the industry for better results. The goals of a consortium benchmarking approach are to :

• Have a consensus about the objectives of the benchmarking study.
• Better quality responses from members
• A greater understanding of the findings of the study
• Allows for gauged results if the implementation of the finding

AcqLinks and References:

• [1] Defense Acquisition Guidebook (DAG)
• Consortium Benchmarking Methodology Guide, AWWA Research Foundation
• [2] Website: Wikipedia – Benchmarking

Updated: 7/27/2021

Rank: G1000