The APQC Blog

Expect More from Benchmarking

There are many types of benchmarking, but most organizations continue to focus on what I’ll call “descriptive” benchmarking. This type of benchmarking follows a structured methodology, which is critical to success, but is characterized mainly by collecting data from a group of benchmarking participants and generating comparative or descriptive findings. This approach does not provide the information required to maximize improvement decisions, the data is too direction and not prescriptive. There is a better way.

The Ultimate Output is What Matters Most

The findings you report represent the most significant portion of the value to the benchmarking participants. Much of this value is created during the analysis phase of the project, and analysis hinges heavily on planning the project well and collecting appropriate data. However, too many benchmarking projects fall short during the analysis and the subsequent reporting phases of the project because they don’t focus analysis that can deliver findings to drive real decision-making within an organization.

Take Analysis to the Next Level

Benchmarking projects typically generate descriptive information in the final analysis. The following procurement-focused finding represents an example you would read in a many benchmarking reports.

  • 60% of respondents report processing purchase orders automatically.

This is good information, but not great. It doesn’t help the benchmarking participants understand the real influence automation has on real business outcomes within procurement. It only describes the response patterns of the benchmarking participants. A more valuable finding, which can be attained by taking a different approach to analysis, is represented below.

  • Automated processing of purchase orders among respondents has a significant influence on decreasing overall procurement costs and shortening procurement cycle times.

Participants can better understand the influence of automation on productivity. By conducting analysis to find statistically-proven relationships between process characteristics and business outcomes, the findings become more valuable for all participants.  This approach is not hard to do, but you have to think about benchmarking, and specifically analysis, differently.

This is where APQC is taking our benchmarking, and I challenge you to go there, too.

Note: The views expressed here are mine alone and do not necessarily reflect the views of my employer.