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Achieving High Performance through Benchmarking
Private sector organizations looking to drive value often ask, “How do we measure up against the competition?” Forward-thinking government organizations that want to drive public sector value should also examine how their performance measures up to that of their government peers and commercial companies providing similar services. Yet many federal agency executives struggle to find the answers because they lack a detailed picture of their performance across key dimensions.
Benchmarking helps government leaders gauge where their organization leads, lags or operates at par with other enterprises. Equally important, benchmarking provides the baseline for an organization to articulate key issues and measure its ability to achieve specific outcomes. Benchmarking can help improve agencies’ operations in several ways:
Highlighting inefficiencies, excesses and areas where operations are too lean.
Better managing scarce funding resources by measuring the cost impact of initiatives.
What is benchmarking?Benchmarking allows an organization to capture specific cost and performance data—the baseline or current state of the organization under study—and evaluate this cost and performance data against another entity (or itself).
Organizations typically use the benchmarking process externally to compare themselves to other organizations, but they also can use it internally. For example, an agency operating in several countries, or with multiple operating units and divisions, can compare cost and performance metrics across those different entities. Agencies can start improving operations by using the top performing operating unit/division as the standard for performance.
Benchmarking delivers four critical benefits for organizations looking to improve the performance of key functions:
Enables a current-state assessment of the function. This assessment involves a rigorous baseline of cost, quality and cycle time; external and internal comparisons of cost and performance, and the identification of meaningful gaps. With this data, the agency can identify where it’s doing well and where inefficiencies might exist.
Sets a strong foundation for transformation programs. An effective benchmarking initiative enables an organization to identify and prioritize opportunities more easily—by process, region and cost driver—which, in turn, results in more informed and relevant improvement targets and a stronger overall business case for the transformation effort.
Establishes a strong basis for continuous improvement. Benchmarking helps create or renew a culture of managing through metrics by enabling periodic measurement against the initial baseline. Importantly, this baseline assessment is process-based, so it remains relevant regardless of subsequent organizational changes.
Builds a nomenclature. Benchmarking yields a standard set of terms and definitions for key aspects of an agency’s business processes, allowing everyone in the organization to share the same understanding about the state of its operations.
Beyond numbersImportantly, however, numbers alone are not enough. No database of information will churn out a ready-made prescription for an agency’s unique set of circumstances. Thus, agencies must supplement the quantitative dimension of benchmarking with a qualitative analysis informed by a deep understanding of leading practices and how they can be applied given the organization’s discipline, strategic goals and constraints.
Benchmarking can be a powerful tool for helping federal organizations ensure that they are not falling behind in important functional capabilities. A simple but effective examination of the current state of a function, benchmarking not only identifies the state and performance of existing capabilities, but also helps organizations set clear and meaningful targets for improvements—and define the outcomes of those improvements. And, most important, benchmarking can define the roadmap for successfully making those improvements, enabling agencies to turn knowledge into an advantage and adapt to changes in the organization’s landscape.
Accenture’s benchmarking assetsAccenture has a quantitative finance function benchmarking capability ready for client use. The offering uses our Finance Process Excellence model as the organizing framework. Our process scope is more detailed than some of our competitors, and we believe Process Excellence is the world’s leading process model.
Quantitative Benchmarking Assets
Formal Process Hierarchy: Accenture's Process Excellence framework addressing all finance processes.
Metrics: Formal list of cost, headcount, quality, cycle time, and volume metrics across all finance processes.
Database: Benchmarking database comprising companies across all industries, geographies, and sizes.
Tools: Standardized data collection tool for capture and consolidation of client data, standard output templates—Excel and PowerPoint.
Related Qualitative Assessment Tools
Mastery Scales: Summaries for each major process that define "basic," "competitive," and "mastery" performance.
Loading Practices: Extensive list of leading practices across all finance processes.
Qualitative Interview Guides: To facilitate efficient discussions and root cause analysis.
On Site Team: Experienced client team works collaboratively with client leadership to execute the project.
Central Operations Team: Off-site team efficiently generates benchmarking comparisons and standard output
Subject Matter Experts: Experts in finance benchmarking advise the project throughout the project—from planning to data collection to results analysis.
Proven Project Methodology: Blends quantitative and qualitative assessment with industry, process, organization and technology expertise.
Efficient Data Collection: Rigorous process for data collection, consolidation and validation as well as results analysis and interpretation.
Scope: Addresses current state assessment, future state design and roadmap/business case for change programs.
Benchmarking in actionIn Accenture’s experience, top businesses and governments do three main things to achieve and maintain their leadership position. They:
Regularly identify the gaps between the capabilities they currently have and those necessary to be competitive and cost effective in the future.
Strive to be leaders in those capabilities that are most important given the needs of their business.
Pursue improvements via formal, structured change programs.
Benchmarking can be instrumental in helping organizations emulate these leaders.
Client SuccessesDefense Logistics Agency (DLA)—Accenture helped DLA create operational cost metrics and benchmark the results against commercial industry. Accenture provided the results to DLA senior leadership to give the agency a baseline against which to track operational performance. DLA will use the metric and benchmark information to track and report the agency’s progress. DLA can use this information to select areas for process improvement and drive out operational inefficiencies.
Defense Commissary Agency (DeCA)—Accenture helped DeCA evaluate and challenge current commissary practices. We identified improvement opportunities by benchmarking the agency’s practices against grocery industry best practices, tools and workforce management techniques. This project identified areas to improve customer service, reduce operating costs, standardize processes across the enterprise and further define the organization image.
December 14, 2011
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