Benchmark

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A benchmark (from English benchmark or bench mark ) is a benchmark. Benchmarking (analogously “comparing standards”) refers to the comparative analysis of results or processes with a specified reference value or reference process.

etymology

Benchmark at a trigonometric point in North Wales

The English word benchmark is a combination of the two words bench ("bench", "workbench") and mark ("sign"). Originally, bench-mark referred to the marking of a trigonometric point or a leveling mark in surveying . Even today, in most of the United Kingdom, trigonometric points are provided with a brass plate with the letters OSBM ( Ordnance Survey Bench Mark , roughly: "Marking of the Official Land Survey").

Applications

Benchmarking is used in many different areas - within or across companies - with different methods and goals:

Benchmarking project process
  • Benchmarking in business administration is a systematic and continuous process of comparing products, services and processes.
  • According to the predominant use of the term, benchmarking in the financial sector is the comparative assessment of the investment success (often confused with “setting objectives”). A market-relevant index (e.g. a stock index) is often used as a benchmark.
  • IT benchmarking also falls into the process comparison category. It measures and compares economic (not technical) aspects of an IT infrastructure.
  • Computer benchmarks, on the other hand, are used to compare computing power or other performance values ​​such as the data rate of computers or hardware components. Mostly programs written for this purposeare used.
  • Process benchmarking compares processes with one another, analyzes them and then optimizes them.
  • Product benchmarking compares products and their attributes such as function, costs and unique selling points.
  • Benchmarking design compares products and their attributes such as function, costs and unique selling points.
  • Technology benchmarking compares technologies or processes with one another, for example in production, in order to identify the most cost-effective or most stable processes.

Benchmarking according to Ralf Thomas Kreutzer

Benchmarking is about identifying your own performance gaps by comparing them with a best-in-class company or example that can serve as a role model through good performance. The comparison can be made once or over the long term. The aim is to use proven concepts and methods on the market to determine your own optimization potential and to obtain suggestions for your own actions and to develop a solution strategy on this basis. The level concept according to Ralf Thomas Kreutzer can be used to carry out the benchmarking . This is divided into five levels that contain precisely defined variables.

  • In the first stage, the benchmark, i.e. the services, products or processes, is defined and the key components of the analysis object are determined. This first step quickly shows that it is not a matter of comparing the companies, but rather of comparing certain service elements.
  • In the second stage, the relevant competitive area is defined. In addition, it is determined which internal company division or which external company is to be the subject of investigation. It is often advisable to look around in another industry or country. Finally, the benchmark is defined in your own company, which is to be used for comparison.
  • The third stage is used to gather information. The best possible transparency about the benchmark and the underlying concepts and / or products should be determined. All relevant success factors are to be recorded here.
  • In the fourth stage, the differences in performance between the companies are identified. On the one hand, performance gaps in one's own company are recognized, which show that one's own concepts are inferior to those of the benchmarks. On the other hand, excess performance can also be determined, which means that certain company performance does not produce any benefit. Overall, benchmarking is about gaining information about successful processes or the design of services and products from other companies.
  • The fifth stage serves to work out which areas can be optimized by comparing the best practice approach and your own concepts. In addition, measures are defined aimed at positive implementation. The aim is therefore to stimulate a change process in the company.

Goal of the benchmarking

Since the benchmarks are already being used successfully by other companies, benchmarking can provide a high level of credibility for defining new standards

Benchmarking software

“Benchmarking” - that is, making comparisons as well as analyzing and evaluating the results - is a key figure-driven task and as such can also be viewed scientifically.

The three quality criteria for good key figures as a benchmark are: objectivity, validity , reliability . For these quality criteria of key figures, psychology in particular has made decisive contributions in recent years, which are also taken into account in business administration.

Scientifically, there are essentially three approaches to benchmarking, from which essential criteria can also be derived for the use of software:

  • Partial benchmarking methods; here key figures and / or performance indicators are set side by side and compared. Interrelationships are not yet considered here. In practice, such trivial benchmarking approaches still prevail. The use of software is usually limited to simple reporting, for which there are now numerous software solutions, both offline and IP-based online solutions.
  • multidimensional benchmarking methods; The parametric and non-parametric frontier and average approaches are to be mentioned here in particular. An impact analysis is aimed at with these approaches. Data Envelopment Analysis (DEA), for which special software also exists, appears to be particularly interesting and future-proof . Even for the professional user, Excel offers completely sufficient possibilities to carry out even the most complex benchmarking analysis , especially if the VBA programmability is used. Most existing ERP systems can be supplemented accordingly using ETL processes that are easy to program .
  • Data mining ; a relatively young branch of science is the use of data mining for benchmarking. On the one hand, it is about generating meaningful key figures, whereby the external benchmarking and the procurement of key figures from outside the own company in particular experience enormous enrichment. On the other hand, data mining also offers excellent opportunities to draw new knowledge for management, in particular process optimization, from the often rich data resources in companies. So far, data mining has hardly been covered by current ERP systems. Special software is usually used for this.

See also

Footnotes

  1. ↑ Boris D. Paraškevov: Words and names of the same origin and structure. Lexicon of etymological duplicates in German. De Gruyter, Berlin a. New York 2004, ISBN 3-11-017470-7 , p. 31.
  2. ↑ Del Giorgio Solfa, F. (2019). Public benchmarking: contributions to sub-national governments and benchmarking design. Villa Elisa, FDGS, ISBN 978-987-86-0126-7 , p. 9, doi : 10.13140 / RG.2.2.24620.51844 .
  3. ↑ Del Giorgio Solfa, F. (2019). Public benchmarking: contributions to sub-national governments and benchmarking design. Villa Elisa: FDGS, ISBN 978-987-86-0126-7 , p. 48, doi : 10.13140 / RG.2.2.24620.51844
  4. ^ Ralf T. Kreutzer: Toolbox for Marketing and Management. Creative concepts - analysis tools - forecasting instruments. Springer Gabler, Wiesbaden 2018, p. 132.
  5. ^ Ralf T. Kreutzer: Toolbox for Marketing and Management. Creative concepts - analysis tools - forecasting instruments. Springer Gabler, Wiesbaden 2018, p. 134 f.
  6. ^ Ralf T. Kreutzer: Toolbox for Marketing and Management. Creative concepts - analysis tools - forecasting instruments. Springer Gabler, Wiesbaden 2018, p. 136 f.