TBE - Centralized or Hybrid Benchmarking Structure

Benchmarking Management
Survey - Results

Co-Sponsored by American Express and The Benchmarking Exchange

This summarized report is the result of a survey conducted from November 1997 through February 1998 co-sponsored by American Express and The Benchmarking Exchange. The topic of the survey was on how benchmarking was managed within organizations. The organizations participating in this study ranged from just five employees to more than 83,000. The industries represented varied diversely but were primarily from:

Aerospace	Automotive	Business Services
Communication	Government	Insurance
Manufacturing

This was a simple survey which was designed to get a feel for how benchmarking was positioned within an organization, who had formal responsibilities for benchmarking and how were benchmarking activities managed. The survey also provides us with an idea of how many organizations have been benchmarking and for how long. It is very apparent that benchmarking is still just being embraced by organizations. Almost half the organizations participating in this study have only been actively engaged in benchmarking within the past year!

We hope you can make good use of this data and want to send a special thanks to all 73 organizations who participated in this survey.

Question 1: How long ago did your organization start to conduct benchmarking projects?

The results clearly show that almost half the respondents have begun benchmarking within the past year. Only a handful have been benchmarking for five or more years. The reasons for the rather recent benchmarking launches are because smaller organizations are now establishing formal benchmarking and quality improvement guidelines within their organization. Another reason is because benchmarking is becoming much less expensive and much more effective than the past based on the availability of resources.

Question 2: Over the past twelve months, how many requests has your organization received from other organizations to participate in benchmarking projects?

The majority of respondents indicate they had received 5 or less requests to benchmark. The overall average is 6.3 requests per year. Note: Responses to Questions #2 and #3 have been consolidated in the following chart.

Question 3: Over the past twelve months, how many benchmarking projects initiated by your organization has your organization completed?

Although the results show that an average of just 1.72 projects per year are completed, the actual number of completed projects may be higher because in many cases the benchmarking team doesn't stay with the process implementation team especially when the implementation may take a year or more to complete. Another reason the average seems low is because many organizations do not have adequate tracking tools to go back and see which studies actually went to an implementation phase. And finally, many organizations have found enough improvement opportunities "holes in the process" during their benchmarking study and were able to make changes to the process almost immediately thereby improving the process "on the fly" sufficiently that a full implementation of findings was no longer necessary. They do recognize however that had they not begun their benchmarking study they would not have been able to identify these "holes" in the first place.

Question 4: To what degree has your organization deployed methods of Total Quality Management?

Question 5: How is support for benchmarking structured within your entire organization?

The structure of the organization is evenly spread across the organization. Larger organizations (5,000+ employees) have for the most part let the departments / divisions run their own benchmarking office. Smaller organizations indicate they have a need (purely economic) for a centralized benchmarking office to help coordinate training and share benchmarking resources.

For organizations with a centralized or hybrid benchmarking structure:

Question 6a: What is the title/level of the person in the central / corporate unit?

70% of the respondents indicate some level of management is responsible for managing benchmarking. The remaining 30% is comprised of non-managerial staff (18%) and outside consultants (12%). Considering benchmarking is just beginning to take hold in the business world, anticipate more of the responsibility being brought in house as people become more knowledgeable about benchmarking and resources become more readily available.

Question 6b: What percentage of this person's time is devoted to benchmarking?

Of the 18% of people responsible for benchmarking that are internal non-managerial staff, these "individual contributors" spend significantly more time on benchmarking activities than the others. Almost half their work day / week is devoted to benchmarking.

Question 6c: What benchmarking activities is this person responsible for?

The top five duties for the person responsible for benchmarking are:

Conducting surveys

Developing and maintaining a benchmarking database

Developing and supporting benchmarking through out organization

Provide training and education

Searching for best practices and knowledge management

Question 6d: What are other responsibilities that this person has in addition to benchmarking?

Coaching, Community Service, Consulting, Corporate Planning, Corporate Training, Corporate Wide Quality, Employee Relations, Goal Setting, Human Resources, Internal Client Satisfaction Surveys, Maintain Specialized Resource Library, Maintain QS-9000 Certification, Marketing and Sales Support, Meeting Facilitator, On-line Research, Operating Planning, Organizational Development, Plan and Conduct Total Productive Maintenance Performance Measurement, Performance Metric Design, Process Consultancy, Process Design, Process Improvement, Process Management, Quality Assurance, Quality Development, Quality Systems Advice and Council, Re-Engineering, Research and Development, Strategic and Operations Management, Strategic Planning, Suggest Improvements and Award Programs, Supplier Management, Team Building, Total Financial Oversite and Consolidations, Total Quality Development, Training and Development

Question 6e: What is the name of the central / corporate department in which benchmarking resides?

Accounting, Business Measurement, Business Planning, Circuit Court Civil, Continuous Quality Improvement, Corporate Accounting, Corporate Development, Corporate Financial Planning, Corporate Quality, Corporate Relations, Engineering, Engine Manufacturing, Head office, Human Resources, Information Technology, Planning and Control, Process Management, Product Engineering, Public Relations, Quality Assurance, Quality Department, Quality Resources, Strategic Resources, Technical Services

If your organization designates benchmarking champions at its different divisions / sites:

Question 7a: What is the most common level / title of the benchmarking champion in the business unit / function?

The non-centralized benchmarking office tends to be more structured toward management having direct involvement than a centralized model. Benchmarking procedures for a field office are definitely different than those required for an entire manufacturing facility. However, some standardization is necessary from the corporate office mainly to keep the costs of training, supplies, information systems and other cross-functional-unit-compatible resources to a minimum.

Question 7b: What percentage of this person's time is devoted to benchmarking?

The amount of time these different capacities spend on benchmarking activities are roughly about the same with a high of 19% to a low of 5%. But in all cases no one spends more than 19% of their work day / week working on benchmarking projects. The overall average is about 10 - 15%.

Question 7c: What are the responsibilities of the benchmarking champion?

Administer Implementation, Audit Progress of Team, Consulting, Defining Metrics, Determine When to Benchmark, Establish Contacts with Potential Benchmarking Partners, Facilitate department Selection of Benchmark Subjects, General Operations Manager for Region, Identify Best Practices, Identify Opportunities for Benchmarking, Implementing Improvements, Implementing Metrics, Initiating Benchmarking Projects, Institute a Benchmarking Program, Lead Benchmarking Team, Maintain Documentation, Managing Process Change, Measuring Effectiveness Before & After Change, Participate in Action Groups, Present Benchmarking Results, Prepare Needed Benchmark Data, Prioritize Benchmarking Projects, Process Mapping, Secure That Equal Data Used in Comparison, Training, Undertaking Benchmarking

Question 7d: What is the most common name of the central / corporate department to which the benchmarking champion reports?

Accounting, Administration, Business Group, Continuous Quality Improvement, Decentralized, Executive Management Team, Finance, Industrial Engineering, Manufacturing & Distribution, Sales & Marketing, Strategy, Technical Services

Question 7e: What methods are used to communicate amongst the benchmarking champions?

Benchmarking Database, E-mail, Fax, Informal Networking, Interoffice Mail, Intranet, Meetings, Site Visits, Telephone, Written Reports

Question 8: Is there a link between the strategic plan and the benchmarking agenda?

Roughly 72% have indicated that there is a direct linkage between Strategic Planning and Benchmarking.

Question 9: Is there a directory or database of internal benchmarkers available throughout your organization?

The method of making this information available to the organization varies but the most common vehicle in use today is through the use of an Intranet.

Question 10: How is information about benchmarking results (e.g., from inbound or outbound studies) shared in your organization?

39% of the time benchmarking results are shared electronically via Intranets and Email. Because the cost of hosting an Intranet is plummeting and the technology incorporated in Intranets is becoming much more business friendly, expect this rate to increase more than 75% by the end of 1998.

Question 11: What type of benchmarking activities are initiated most by your organization?

Question 12: Who in the organization usually initiates them?

Benchmarking Team, Benchmarking Quality Center, Board Staff, Business Development Unit, Business Measurement Group, Consultant Staff, Director, Director of Corporate Quality, Division Quality Coordinators, Division Quality Managers, Engineer, Manager, Manager Audit Inspection, Managing Director, Marketing Department, Marketing Manager, Organization Effectiveness Personnel, Performance Measurement Analyst, Process Owner, Quality Department, Quality Manager, Sales, Senior Vice President, Strategic Planning

**Of the above results the title of Manager was most common, Directors being second most common.

Question 13: Do you charge companies for inbound benchmarking / site visits?

NO !
Of all the respondents, not one organization charges a fee for inbound benchmarking / site visits. Even though a benchmarking site visit can be a burden on resources, the payback is well worth the effort.

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