Page 594 - Handbook of Modern Telecommunications

Network Organization and Governance 4-125

4.7.1.2 Advantages of Benchmarking
Benchmarking is an improvement technique that has the following main advantages:

• Comparisons inside the company allow managers to understand how their performance com-
pares with other functional areas.
• External comparisons provide an objective basis to compare specific business functions and
processes.
• It can be applied to virtually any or all areas of an organization.
In addition, each type of benchmarking has its own advantages.

• Internal benchmarking:
• Allows functional areas to share information
• Information is easily accessible
• Allows organizations to obtain immediate gains by identifying their best internal prac-
tices and transferring them to other parts of the organization
• The knowledge about internal best practices can become the baseline for later investiga-
tion and measurement involving external benchmarking partners
• Competitive benchmarking:
• Most useful in assessing key performance measures, as it allows organizations to see their
related performance.
• Information about competitors can be used to get a burning platform and therefore apply
pressure to change.
• Industry or functional benchmarking:
• Easier to identify willing partners, since the information is not going to a direct competitor.
• Generic or process benchmarking:
• Has the potential of revealing the best of best practices.
4.7.1.3 Disadvantages of Benchmarking
Benchmarking only helps in shooting for the best practice, it does not guarantee (although it may help)
leaping ahead of the competition. Benchmarking can be quite time consuming and may not produce
useful information.
The disadvantages specific to each type of benchmarking are outlined below.

Internal benchmarking:
• Fosters an introverted view and it is all to easy to ignore the fact that other firms have the competi-
tive advantage over you if you are concentrating on outperforming internal rivals.
• There is a risk of political conflict.
• It generally has limited value, as the possibility of finding large improvement opportunities is not
very strong.

Competitive benchmarking:
• The main disadvantage is that information, beyond that in the public domain, is difficult to find.
Industry or functional benchmarking:
• The disadvantages are cost and the fact that the most renowned companies are beginning to feel
overwhelmed with benchmarking visits and some are even charging a fee for access.
This type of benchmarking is most useful in benchmarking process designs as opposed to perfor-
mance measures and strategies.