Tuesday, August 12, 2008

Benchmarking for Project Quality Assurance

Why would one company want to investigate another company? The main reason for investigating another company is to gather information to use in developing your company's goals and effective processes. This investigation is called a benchmarking process (BMP).

Performing a BMP can help you know your company better and understand your competition. Benchmarking compares the performance of one company against another that is best-in-its-class. This involves a thorough examination and understanding of processes, products, or performances.

The BMP also provides information about where a company stands when compared to standards that are set by customers, companies, certification organizations, and industry associations.

The BMP will indicate the areas of strength within a company and uncover opportunities for improvement. First, the BMP examines a company's own processes. This will reveal which ones are the best. In addition, examining the processes of another company can help you identify the areas in your own company that need improvement.

Performing a BMP will identify your competitive position. Although there are costs involved with this process, the benefits of performing a BMP will far outweigh the costs or efforts involved. There are four common types of benchmarking assessments you can perform.
  • Internal. This is usually the first BMP to take place for most companies. For this BMP, a company examines it own organization to find the best practices. It's an easy BMP to carry out, as security issues do not exist.
  • Competitive. This BMP type is also called reverse engineering. It involves studying the services, products, and processes of a company's competitors. One way to perform this type of BMP is to buy and analyze the competitor's product.
  • World-class operations. To perform this type of BMP, a company examines an organization in an industry related to its own. This technique can reveal innovative processes not currently used by the company.
  • Activity-type. This type of benchmarking examines a specific process activity in an industry different from its own. You can use this BMP type to study many activities, such as recruiting and invoicing.
Customer satisfaction is a top project goal. Performing a BMP can support a company's desire to improve and change, and ultimately improve the level of satisfaction of its customers. There are six separate stages for every BMP. These six stages are described below.
  • Process design (planning). In the first stage, you should decide which quality process will be benchmarked. Then determine the measurements that will be used to perform the BMP.
  • Internal data collection. The second stage involves learning your company's own practices and performances. This can be done using such techniques as system and process flowcharts, and cause-and-effect diagrams.
  • External data collection. In the third stage, select a competitor that is best-in-its-class, and collect data about that company. For world-class or activity-type benchmarking, use a company in a different industry.
  • Data analysis. Next, compare the information you've gathered with the information you've learned about your company's own practices and performances.
  • Process upgrading. Based on the information you've learned about your competitor, identify which ideas will be adopted for your own processes and decide how to implement them.
  • Periodic reassessment. Finally, monitor the effectiveness of the new ideas and make plans to re-benchmark them after a specific interval of time.
Benchmarking is like an investigation. Organizations perform BMPs to set goals and develop effective processes. There are four types of benchmarking assessments a company can perform: internal, competitive, world-class operations, and activity-type. In doing each type, there are six steps to follow. Knowing these steps will help you identify and improve your company's competitive position.

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