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.

Project Quality Planning Tools: Benchmarking

Did you know that project management can be similar to detective work? The benchmarking process (BMP) is like an investigation. It involves searching through available clues, finding leads, and then following up on those leads to understand the processes of world-class companies.

The BMP compares the performance of one company against another that is best-in-its-class. This is an effective tool and technique for quality planning.

Why should you perform a BMP? There are two main reasons for benchmarking—setting goals and process development. The BMP also will help you to know yourself, understand your competition, and define and integrate the best processes into your organization.

The benefits of benchmarking far outweigh the costs or effort involved. Benchmarking will:

• improve customer satisfaction
• define the best processes
• improve already-existing processes
• promote a desire to improve and change
• identify your competitive position
• improve the relationship between benchmarking partners.

The BMP provides information about where a company stands when compared to standards. These standards 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.

There are four common types of benchmarking assessments: internal, competitive, world-class operations, and activity-type benchmarking. Details are provided below.

• Internal benchmarking. This type of benchmarking usually takes place first. It involves examining your own organization and determining the best practices observed. It's easy to carry out, and matters of security and confidentiality do not exist.
• Competitive benchmarking. This is also called reverse engineering. It involves studying a competitor's services, products, and processes. The easiest way to do this type of benchmarking is to buy the competitor's product or service and then analyze it.
• World-class operations benchmarking. This benchmarking type takes the BMP past a specific type of organization to one that is different. It's a useful technique for discovering innovative processes not currently used by an organization.
• Activity-type benchmarking. This type of benchmarking examines specific process steps or activities that go beyond specific industries. It includes activities such as recruiting, invoicing, and engineering change control.

The benchmarking process is a useful tool and technique for quality planning. It's natural that companies want to immediately visit a top-notch organization as their first BMP activity. Although doing this is a part of the BMP, it's not the only activity that should be performed. There are six separate stages for every BMP.

• Process design (planning). Select one quality process to study at a time. Form a team of people involved in the process you wish to study. Determine the measurements you will use.
• Internal data collection. Know your own practices and performance. This can be done using such techniques as system and process flowcharts, or cause-and-effect diagrams.
• External data collection. Select a competitor in the same or different industry as your company. Select one that is best-in-its-class for the process you are studying.
• Data analysis. Compare the information gathered with the information from your own company.
• Process upgrading. Based on information you have learned from your competitor, identify which ideas can be adopted for your own process and decide how they can be implemented.
• Periodic reassessment. Monitor the effectiveness of the new ideas and re-benchmark them at specific intervals of time.

Effective benchmarking requires choosing the specific benchmarking type and completing the appropriate steps. This process is not just about uncovering the secrets of your competition—it includes learning about yourself.