Benchmarking Tool Analysis

Benchmarking Tool Analysis

The definition of benchmarking is the process of making comparisons in order to learn from Best Practices. When an organization compares its performance with other similar organizations they can identify those companies that have a comparatively high performance rating. From this an organization can learn how to achieve such a high level of performance.

Benchmarking started in the corporate sector when Xerox Corporation realized it was losing a lot of money and its market share to Japanese competitors. These competitors were able to sell a product for the same price that it cost Xerox to make. Benchmarking was started by Xerox's Manufacturing unit when it compared its photocopier manufacturing process to Fuji-Xerox. This is a very famous study that became part of the first book on Benchmarking by Camp. The book was not published until 1989, but meanwhile, benchmarking was becoming indoctrinated into the Xerox system of operations. Even so, most people still had never heard of benchmarking.

Benchmarking is a part of a Total Quality Program (total quality), and one of the purposes of total quality is to improve the way a company does business. This could be through improved customer service or increased quality of a product. Benchmarking means to adopt another's Best Practices as your own. It is not a one time fix, but rather a process that should be applied periodically to monitor the initial improvement progress, then as often as needed to ensure the processes in place are still considered best practices, which as with most things will continually evolve. Benchmarking should be used when making decisions on streamlining processes or to cut overhead costs. It should not be used when an improvement to an end product is needed.

Benchmarking is considered a total quality management tool, a term that refers to a management style where the goal is producing quality products or services for the customer and in which the customer defines quality. Total quality proposes that a service or product is not successful unless the customer is satisfied with the service or product, and that the product or process should be continually improving. Total quality and related approaches are sometimes referred to as total quality improvement, world-class quality, continuous quality improvement, total service quality, and total quality leadership.

Some basic principles of total quality management are that quality is determined by the customer, quality is continuously changing and needs to be reevaluated frequently, and quality can only be improved when real statistics and customer feedback are studied. Some components of total quality management are creating quality frameworks, defining an organization's focus, empowering an organization's employees, and implementing a structure to allow employees to participate in the management of the organization.

Total quality is not based on the ideas of a single person. The basic principles are based on Walter A. Shewhart's modern quality control concept, W. Edwards Deming's fourteen points for quality management, Joseph Juran's Juran Trilogy for managing quality, Philip Crosby's four absolutes of quality, Armand Feigenbaum's ideas of a systems approach to quality and separation of costs of quality, and Kaoru Ishikawa's idea of quality circles.

In the Information Technology (IT) field, many of the steps taken in benchmarking have been already attempted and implemented as the industry standard. This industry standard is known as the Information Technology Infrastructure Library (ITIL), which is described as a set of best practices used to deliver high quality IT services. The best practices described in ITIL represent the consensus derived from over a decade of work by thousands of IT and data processing professionals' world-wide, including hundreds of years of collective experience. Because of its depth and breadth, the ITIL has become the defacto world standard for