Benchmarking is about more than just cutting costs. The true value is in improving resources and better prioritizing resources.
The NCVO, a large umbrella body for volunteer organizations in Great Britain, refers to back-office benchmarking as “smart working.”
“It is about working out how we can do better rather than comparing costs,” Mark Reilly, head of improvement and innovation, explains in an article on The Guardian’s website.
Benchmarking focuses on internal processes and not outcomes, although the end savings can be significant. One social housing provider cut its management costs by about $4.5 million over five years partly due to benchmarking its back-office functions.
That shows the impact that benchmarking can have on field service profitability. The key to benchmarking is that it allows organizations to compare themselves with competitors and learn lessons from others.
As an example, Tim Pons, RSPB’s financial controller, notes that in 1993 the organization had five employees on the purchase ledger team.
“By 2012, RSPB expenditure had increased by 400 percent and we still have five in that team,” he tells The Guardian. “Consequently, we have been able to change the focus of the department from transactions to supporting business decisions.”
For service providers, it’s so important to look at other companies in their industries that have been able to hire more service technicians and project consultants without adding administration staff. If they are in the same business as you, investigate what field service software tools and equipment they are using to streamline their business processes.
Benchmarking can be as simple as two people comparing internal processes or as complex as a wide cross-sector framework in which many organizations compare framework.
What matters is that companies understand what they want to get out of benchmarking.
“They have to be clear about the goals,” says Sam Matthews, acting chief executive of Charities Evaluation Service. “You have to be clear at the outset what it is you want to find out and then act upon that learning.”
Source: The Guardian, November 2012