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246 CHAPTER 7 • ImPRovEmEnT sTRATEgy
● Functional benchmarking – that compares a business with partners drawn from differ-
ent sectors to find innovative ways of improving work processes.
● Internal benchmarking – that involves benchmarking businesses or operations from
within the same organisation. Access to sensitive and/or standardised data is easier,
usually less time and resources are needed and ultimately practices may be relatively
easier to implement.
● External benchmarking – that analyses ‘best in class’ outside organisations, providing
the opportunity to learn from those at the leading edge.
● International benchmarking – that identifies and analyses best practitioners elsewhere
in the world, perhaps because there are too few benchmarking partners within the
same country to produce valid results.
The objectives and process of benchmarking
Benchmarking is partly concerned with being able to judge how well an operation is
doing. It can be seen, therefore, as one approach to setting realistic performance stand-
ards. It is also concerned with searching out new ideas and practices that might be able to
be copied or adapted. For example, a bank might learn some things from a supermarket
about how it could cope with demand fluctuations during the day. The success of bench-
marking, however, is largely due to more than its ability to set performance standards and
enable organisations to copy one another. Benchmarking is essentially about stimulating
creativity and providing a stimulus that enables operations better to understand how
they should be serving their customers. Many organisations find that it is the process
itself of looking at different parts of their own company, or looking at external com-
panies, which allows them to understand the connection between the external market
needs that an operation is trying to satisfy and the internal operations practices it is using
to try to satisfy them. In other words, benchmarking can help to reinforce the idea of
the direct contribution that an operation has to the competitiveness of its organisation.
There are many different approaches and ‘stage models’ that suggest the required
steps for successful benchmarking, ranging from models of quality measurement to
basic, pragmatic comparisons. Many consultants have their own processes, and larger
firms may have an approach tailored to their own strategic goals and business needs.
However, most processes are based on four steps:
1 gain a detailed understanding of existing business processes;
2 study the business processes of others;
3 compare steps 1 and 2 to find gaps between current and desired practice/perfor-
mance; and
4 implement whatever is necessary to close the gaps between current and desired
practice/performance.

Importance–performance mapping

Importance–performance mapping is a particularly useful approach to directing opera-
tions improvement because it explicitly includes both of the major influences on the
generic performance objectives that define market requirements:
● the needs and importance preferences of customers and
● the performance and activities of competitors.

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