Benchmarking

INTRODUCTION
The term benchmark was originally used in surveying to denote a mark on a survey peg
or stone acts as a permanent reference point against which the level of various
topographic features can be measured. It has also acquired a more general meaning as a
reference or criterion against which something can be measured. The first use of the
term in an educational sense is accorded to R.K. Melton (1997) standards represent
benchmarks with which students compare their ability and performance”.
Xerox first applied the term benchmarking to a process of organizational self-evaluation
and self-improvement. Faced with a rapidly declining market share in the early 1980,
the company pioneered the method of comparing and evaluating its business process,
products, and performance against competitors. The organizational learning acquired
through this process led to dramatic reduction in costs and an improved share of the
market. The methodology was transferred and adapted to all levels of education in
North America in the early 1990, followed rapidly by Australia and more recently the UK
and, to a lesser extent, continental Europe. (Schofield 1998)
Although universities are essentially not for profit, public service organizations they
must generate sufficient income to support and reinvest in the educational enterprise.
Universities are in no doubt that; they operate in a series of competition local, regional,
national, and global.
In the commercial world, benchmarking is used to identify new, innovative, and more
effective ways of doing things to gain and maintain competitive advantage. In the world
of higher education, gaining competitive advantages are an important motivating factor,
but institutional reputation, based on such matters as standing, the public perception of
the currency of awards and the employability of graduates are also important. In both
the national and international market there, are clearly competitive advantages in
establishing and maintaining a reputation for high quality education and research.
Benchmarking is being used as a way of reinforcing peer groups and helping to maintain
and enhance institutional reputation.

Objectives of the Study: To know about the term Benchmarking

To investigate the types and importance of Benchmarking in Higher Education
To know the scope of Benchmarking
Objectives of Benchmarking: To identify the departmental approaches of management of
quality and standards met or exceeded the expectations.
To know the ways in which a department’s approaches of managing of quality and standards
may changed.
To identify the new ways and measures in order to enhance or better the situation
To give better plan of action and suggest ways and means for the modifications and
improvement of the prevailing situation.
There are many definitions of benchmarking. Robert camp who benchmarking at Xerox,
defined it as “finding and implementing best practice” with the reason for doing it, (“to
improve work processes that will satisfy customers”, Loveday 1993:43) price (1994:5)
also defined this process “the aim of emulating or improving best available practice”.
Both definitions indicate that benchmarking is fundamentally an approach to self-
evaluation through comparative analysis for the purpose of self-improvement. The two
fundamental purposes of any method of self-evaluation in higher education are:
-to facilitate improvement development change and
-to satisfied expectation and requirements for professional accountability (Kells 1992
and 1995; Jackson 1997)
Jackson 1998a proposed a broader definition for benchmarking in UK, which
accommodates nations of accountability as well as development, e.g. “a process to
facilitate the systematic comparison and evaluation of practice, process and
performance to aid improvement and regulation.

Why Are We Benchmarking?

Although universities are essentially not for profit, public service organizations they
must generate sufficient income to support and reinvest in the educational enterprise.
Universities are in no doubt that; they operate in a series of competition markets-local
regional, national, and global. In the commercial world, benchmarking is used to identify
new, innovative, and more effective ways of doing things to gain and maintain
competitive advantage. In the world of higher education, gaining competitive
advantages is an important motivating factor but institutional reputation, based on such
matters as research standing, the public perception of the currency of awards and the
employability of graduates is important. In both the national and international market
place there, are clearly competitive advantages in establishing and maintaining a
reputation for high quality education and research. Benchmarking is being used as a way
of reinforcing peer groups and helping to maintain and enhance institutional reputation.
Public confidence in the academic standards of an institution is dependent on robust
mechanisms for self-regulation and external quality assurance. As higher education,
markets become more sophisticated there is a need to provide information that will
enable degree outcomes to be compared and differentiated. The rapid expansion of
higher education in the UK and increased diversity in all aspects of delivery, the
assessment of learning and outcomes have increased public demand for explicit
information that will enable degree outcomes to be differentiated. Benchmarking is
being developed to improve the capacity of higher education to demonstrate more
transparent levels of comparability and difference between awards in different
institution and subjects.
The educational enterprise is support by a range of administrative and managerial
functions, technical and other support services e.g. registry, libraries, IT infrastructure
financial services personnel, estates, catering, student services, etc. creative and cost
effective management of these functions is vital if universities are to continue to deliver
excellence in the face of declining per capita state funding and rapid change.
Benchmarking provides a vehicle for sharing practice within functional communicates,
identifying smarter ways of doing things and new solutions to common problems and
identifying ways of reducing costs while optimizing the quality of service offered to
students and other clients.

Types of Benchmarking: Benchmarking activities can be classified according to the

nature of the referencing process that under pins the activity (Jackson 1998b) and /or
whether the process is:

Implicit or explicit benchmarking: Schofield (1998) classified benchmarking activities

according to whether the activity is implicit (information gathered by a national agency),
or explicit (a process that facilitate comparison and identify directions for change
(improvement).

Independent or collaborative benchmarking: A single institution or administrative unit

within an institution may wish to compare its own practice and performance, known as
Independent benchmarking. Collaborative benchmarking involves the active
participation of two or more organizations or units in a formal structured process.

Internally or Externally Focused Benchmarking: Internal benchmarking is a process

used in decentralized organization where performance in similar processes is compared
between operating units. In universities, this can mean comparison between different
academic departments or different administrative units. External benchmarking is a
process used in different organizations where performances in different operating units
are compared. This can mean comparison between different universities and their
departments.

Three Types of External Benchmarking

a. Competitive benchmarking: Focuses on measuring performance against competitor

organization. In universities, this might take the form of comparing the staff and student
recruitment strategies with the institutions main competitors.

b. Functional benchmarking: This is a process used to compare own practice with other
organizations fulfilling similar functions. This could mean, for example, a university
comparing its admissions or procurement procedures with others universities.
c. Generic benchmarking (also known as “best in class): Compares the process of an
organization to organizations that operate in a different context but are recognized as
truly innovative and leaders in their field. The criterion for benchmarking is who
performs this activity best. For example, a university might compare its facilities
management processes with those of an Airline, manufacturing company, or Hospital.
The difference between functional and generic benchmarking is that the latter seeks to
identify and understand why the best of the best is the best.

Input – Process – Output Focus: Benchmarking can be focused on the process (inputs)
and from the process (outputs). The term’s output is used for comparison of specific
activities between organization, and process benchmarking a comparison of the
capabilities and system used by the organizations to achieve their results.

Scope of Benchmarking:

A.Vertical and b. Horizontal process: Benchmarking can be focused on a single business

or academic process (process is used to embrace the totality of practice, behavior, value
and systems, procedure, performance/outcomes and products). Alstete (1995) classified
benchmarking processes into vertical and horizontal components.

Vertical benchmarking aims to quantify or qualitatively understands work process in a

discrete functional area. For example in a university this might be an evaluation of the
teaching, learning and assessment practices within a department, or the way a registrar
discharges its administrative functions. In contrast, horizontal benchmarking examines
work process that crosscut the functional areas and organizational units. In a university
this might take the form of a study that examines the way different departments engage
in the admissions process or the induction of students.
Quantitative and Qualitative Approach: A quantitative or qualitative methodology
provides another rationale for classification. Benchmarking requires the construction of
information bases relating to work practices, processes and procedures, professional
behaviors and value systems, and performance.

The qualitative comparison of function, service, or technology typically involves an

informed discussion process usually facilitated by an independent consultant, to
compare what has been done and achieved. In contrast, a quantitative comparison of
functions, service, or technology involves a more rigorous and systematic approach
using agreed measures of performance to compare what has been done and achieved.

(Quality and standards) (Quality, tandards and performance)

BIBLIOGRAPHY
Alstete WJ (1995) benchmarking in higher education: Adapting best practices to improve
quality, ASHE-ERIC higher education report No. 5, Washington D.C. George Washington
University.
Camp RC (1989) Benchmarking The search for industry best practices that lead to
superior performance Milwaukee, wl; American society for quality control press.
HEFCE (Higher Education Funding Council for England) (1997e) Procurement
Benchmarking for higher education Bristol; HEFCE
Jackson N.J. (1997) Role of self-evaluation in the self-regulating UK higher education
system in N.Jackson (ed). Approaches to self-evaluation and self-regulation in UK higher
education London, HEQC
Jackson NJ (1998a) Introduction to benchmarking assessment practice in N.Jackson (ed)
Pilot studies in benchmarking assessment practice in UK higher education. Gloucester;
quality assurance agency
Jackson NJ (1998b) “Benchmarking assessment practice in UK HE: a commentary’ in
N.Jackson (ed) Pilot studies in benchmarking assessment practice in UK higher
education. Gloucester; quality assurance agency
John B & Tarla S (2000 “Managing Quality in higher Education An international
Perspective on Institutional Assessment and change” Published by OECD, SRHE & Open
University Press Celtic Court 22 Ballmoor Buckingham MK 18 IXW.
Melton R (1997) Objectives, Competencies and Learning Outcomes: Developing
Instructional Materials in Open and Distance Learning. London and Stirling (USA): Kogan
Page.
Norman J & Helen L (2000) “Benchmarking for Higher Education.” Published by, SRHE &
Open University Press Celtic Court 22 Ballmoor Buckingham MK 18 IXW.

Schofield A (ed) (1998) Benchmarking in Higher Education: An International Review.

London: CHEMS and Paris: UNESCO.

A key element in your benchmarking and best practice is to look at utilization rates. Your
utilization rate is the ratio of how many hours you bill clients compared to how many
hours you work in a given period.

Utilization Rate = Hours Billed / Hours Worked

The typical benchmarking and best practice comparison is based on a 40 hour work
week. If you work 40 hours in a week but only work with clients for 10 billable hours,
your utilization rate is 25%.

Utilization Rate Benchmarks

Benchmarking and best practice in the computer consulting industry suggests using a
utilization rate of 50% as a minimum tolerance level. This may not be realistic for the
first few months of start-up though. What you want to monitor is whether your
utilization rate is showing an upward trend toward the benchmarking and best practice
standard.
A 50% utilization rate is a good place to be within six to nine months of launching your
business. By the time your business matures, a utilization rate of 75% (30 billable hours
per week) is a benchmarking and best practice ideal. Once you get higher than that your
quality of life begins to suffer. The huge invoice payments coming in are great but the
resulting burnout and stress are not worth it.

The Bottom Line on Benchmarking and Best Practice Utilization Rates

It is important to measure your performance against others in the industry. A
benchmarking and best practice comparison, particularly with utilization rates, is a great
place to start. Your ideal rate will vary depending on the phase your business is in, but
remaining within the benchmarking and best practices range is a good indicator of
sustainable business operations.

Collaborative benchmarking:

Benchmarking, originally invented as a formal process by Rank Xerox, is usually carried

out by individual companies. Sometimes it may be carried out collaboratively by groups
of companies (eg subsidiaries of a multinational in different countries). One example is
that of the Dutch municipally-owned water supply companies, which have carried out a
voluntary collaborative benchmarking process since 1997 through their industry
association. Another example is the UK construction industry which has carried out
benchmarking since the late 1990's again through its industry association and with
financial support from the UK Government

Procedure

There is no single benchmarking process that has been universally adopted. The wide
appeal and acceptance of benchmarking has led to various benchmarking
methodologies emerging. The most prominent methodology is the 12 stage
methodology by Robert Camp (who wrote the first book on benchmarking in 1989) [1].

The 12 stage methodology consisted of 1. Select subject ahead 2. Define the process 3.
Identify potential partners 4. Identify data sources 5. Collect data and select partners 6.
Determine the gap 7. Establish process differences 8. Target future performance 9.
Communicate 10. Adjust goal 11. Implement 12. Review/recalibrate.
The following is an example of a typical shorter version of the methodology:

1. Identify your problem areas - Because benchmarking can be applied to any

business process or function, a range of research techniques may be required.
They include: informal conversations with customers, employees, or suppliers;
exploratory research techniques such as focus groups; or in-depth marketing
research, quantitative research, surveys, questionnaires, re-engineering analysis,
process mapping, quality control variance reports, or financial ratio analysis.
Before embarking on comparison with other organizations it is essential that you
know your own organization's function, processes; base lining performance
provides a point against which improvement effort can be measured.
2. Identify other industries that have similar processes - For instance if one were
interested in improving hand offs in addiction treatment he/she would try to
identify other fields that also have hand off challenges. These could include air
traffic control, cell phone switching between towers, transfer of patients from
surgery to recovery rooms.
3. Identify organizations that are leaders in these areas - Look for the very best in
any industry and in any country. Consult customers, suppliers, financial analysts,
trade associations, and magazines to determine which companies are worthy of
study.
4. Survey companies for measures and practices - Companies target specific
business processes using detailed surveys of measures and practices used to
identify business process alternatives and leading companies. Surveys are
typically masked to protect confidential data by neutral associations and
consultants.
5. Visit the "best practice" companies to identify leading edge practices -
Companies typically agree to mutually exchange information beneficial to all
parties in a benchmarking group and share the results within the group.
6. Implement new and improved business practices - Take the leading edge
practices and develop implementation plans which include identification of
specific opportunities, funding the project and selling the ideas to the
organization for the purpose of gaining demonstrated value from the process.
Cost of benchmarking

Benchmarking is a moderately expensive process, but most organizations find that it

more than pays for itself. The three main types of costs are:

 Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, and lost
labor time.
 Time Costs - Members of the benchmarking team will be investing time in
researching problems, finding exceptional companies to study, visits, and
implementation. This will take them away from their regular tasks for part of
each day so additional staff might be required.
 Benchmarking Database Costs - Organizations that institutionalize benchmarking
into their daily procedures find it is useful to create and maintain a database of
best practices and the companies associated with each best practice now.

The cost of benchmarking can substantially be reduced through utilizing the many
internet resources that have sprung up over the last few years. These aim to capture
benchmarks and best practices from organizations, business sectors and countries to
make the benchmarking process much quicker and cheaper.

Technical benchmarking or Product Benchmarking

The technique initially used to compare existing corporate strategies with a view to
achieving the best possible performance in new situations (see above), has recently
been extended to the comparison of technical products. This process is usually referred
to as "Technical Benchmarking" or "Product Benchmarking". Its use is particularly well
developed within the automotive industry ("Automotive Benchmarking"), where it is
vital to design products that match precise user expectations, at minimum possible cost,
by applying the best technologies available worldwide. Many data are obtained by fully
disassembling existing cars and their systems. Such analyses were initially carried out in-
house by car makers and their suppliers. However, as they are expensive, they are
increasingly outsourced to companies specialized in this area. Indeed, outsourcing has
enabled a drastic decrease in costs for each company (by cost sharing) and the
development of very efficient tools (standards, software).
Types of Benchmarking

 Process benchmarking - the initiating firm focuses its observation and

investigation of business processes with a goal of identifying and observing the
best practices from one or more benchmark firms. Activity analysis will be
required where the objective is to benchmark cost and efficiency; increasingly
applied to back-office processes where outsourcing may be a consideration.
 Financial benchmarking - performing a financial analysis and comparing the
results in an effort to assess your overall competitiveness.
 Performance benchmarking - allows the initiator firm to assess their competitive
position by comparing products and services with those of target firms.
 Product benchmarking - the process of designing new products or upgrades to
current ones. This process can sometimes involve reverse engineering which is
taking apart competitors products to find strengths and weaknesses.
 Strategic benchmarking - involves observing how others compete. This type is
usually not industry specific meaning it is best to look at other industries.
 Functional benchmarking - a company will focus its benchmarking on a single
function in order to improve the operation of that particular function. Complex
functions such as Human Resources, Finance and Accounting and Information
and Communication Technology are unlikely to be directly comparable in cost
and efficiency terms and may need to be disaggregated into processes to make
valid comparison.

Sales benchmarking

It’s a sales management process used to compare a company’s sales force against other
companies or against industry performance. The purpose is to identify opportunities to
improve performance and to focus the efforts of a sales organization.

Similarities to process benchmarking

Like process benchmarking, a company will compare itself against other companies that
are in similar industries or circumstances. The benchmarking process is also similar.
Companies identify metrics, collect internal data, find external data sources, and
compare their performance.
Differences from process benchmarking

Process benchmarking has most frequently been used to compare financial,

manufacturing, or other operating metrics and processes. But even though customer
relationship management (CRM) systems have expanded the raw data available to sales
organizations, many sales organizations have not created consistent metrics or a way of
organizing their performance data. Sales benchmarking has several key challenges:

1. Choosing the right metrics is essential to identifying real problems, and focusing
efforts to create improvement.
2. Data in many CRM implementations is not accurate, so it may be necessary to
scrub the internal data to get valid results.
3. Many companies are sensitive to sharing their sales data, so finding external data
can be challenging.

Benchmarks & Performance Measurement

Revolutions begin long before they are officially declared.

For several years, senior executives in a broad range of industries have been rethinking
how to measure the performance of their businesses.

At the heart of this revolution lies a radical decision: to shift from treating financial
figures as the foundation for performance measurement to treating them as one among
a broader set of measures.

Benchmarking Whys & Hows

• Benchmarking represents a versatile process management tool that helps

organizations identify and understand what constitutes best operating practices.

• Benchmarks are the operating statistics or measures that define the achievement
level of any given practice or system.

• These are not in and of themselves enough since they provide no insight into the
root causes of performance differences.
 • A flexible set of benchmarks reflects full process or system capabilities.
Performance indicators may include dimensions such as cost, productivity, cycle
time, yields, error rates, waste and turnover.

Lessons from Active Benchmarkers

• 1. Do not strive to benchmark everything at best-in-country or best-in- world

levels: No company can be best in every function -- focus on processes and
practices of strategic importance.

• 2. Seek best-in-class benchmarks for core processes and functions of the highest
strategic importance: the Pareto Principle wins again. Other benchmarks can
come from levels 2 through 5. World and country leadership benchmarks require
greater time, resources and effort to develop.

• 3. Seek internal, regional, or industry benchmarks for secondary and support

processes: for some processes and business activities that are not critical to the
organization’s strategic advantage, internal, regional or competitive benchmarks
may be most appropriate. Such benchmarks produce incremental improvements
 that are substantial -- even if not radical or ‘breakthrough’ in terms of the size of
the expected improvement benefits.

Benchmarking Architecture

Performance Measures

Designing Successful Benchmarks:

Effective Performance Benchmarks Reflect the Most Important Operating Dimensions of
a Business Process, System, or Function.

Measurement Focus

Determine where in a work area or process that value for the customer is created;

Determine where value is detracted through high costs, errors, rework, or accidents;
and
Target benchmarks in areas where performance diverges from designated standards, or
where variation above and below standards is greatest.

Measurement Prospective

Leading indicators foreshadow or anticipate future system outcomes. Leading indicators

are thus “proactive” or “preventative”.

Lagging indicators such as traditional financial measures are “reactive” or “descriptive”

of the actual results of a system or process in a given time period.

Traditional companies employ lagging indicators while high-performance companies

embrace both types since leading indicators intervene upstream.

Measurement Control

People are always the principal factor affecting the degree of measurement control.
Managers fail at performance improvement when they evaluate individual or system
performance using benchmark measures that are uncontrollable by the people
overseeing the process.

Therefore benchmarks that are designed for performance improvement must be crafted
to reflect the individual level of authority, responsibility, and skills of those people
expected to work with the benchmarks.

Data Collection

After defining performance measures, managers must be able to readily collect the data
from which performance benchmarks are constructed.

Many organizations develop interesting performance measures only to discover that

they currently do not collect the required information and do not have the resources to
do so.

The best performance benchmarks can be collected without excessive investment of

time, systems, staff, or capital.

Benchmark Design Architecture

The first step in designing a performance benchmark system is to create measures that
will enable management to achieve the organization’s strategic objectives.

The second step in designing a benchmark architecture requires managers to create an

agreed upon vocabulary describing performance measurement in your organization.

The third step is to develop plans to collect, process, and analyze the performance
measures.

Benchmarking Compliance
Policy regarding benchmarking protocol should be communicated to all employees
involved, prior to contacting external organizations. Guidelines should address the
following areas:

Misrepresentation: do not misrepresent your identity in order to gather information

Information requests: a request should be made only for information your organization
would be willing to share with another company

Sensitive / proprietary information: avoid direct benchmarking of sensitive or

proprietary information

Confidentiality: treat all information as confidential

Avoiding inappropriate communication and contacts with competitors

Never propose, enter, or engage in a discussion related to any agreements with a

competitor to fix prices, in terms or conditions of sale, costs, profit margins, or other
aspects of the competition.

Keep communications with competitors to a minimum – make sure there is a legitimate

business reason for all such communications

Consult with business legal counsel before initiating any contact with competitors
regarding Six Sigma (or any other topic):

Benchmarking

Training of suppliers and customers – they may also be competitors

Comply with GECS guidelines for:

Documenting competitor contacts – check with legal counsel first.

Participating in trade associations and standards - setting groups.

Legal & Ethical Guidelines

Legality

Never misrepresent yourself or your organization’s interest in a benchmarking

exchange.

Treat information obtained from a benchmarking partner as privileged. Identify all

parties who will have access and the extent of that access.

Comply with antitrust laws; be aware of potentially sensitive issues and consult with
legal counsel if gathering procedure is in doubt, particularly if dealing with current or
potential competitors.

Proprietary Information:

Any information (in tangible or intangible form) created, acquired or controlled by the
company that has not been published or released without restriction of a type the
company wishes to maintain confidential. Proprietary information includes various kinds
of technical, information per Securities & Exchange Commission requirements.

Request and accept only the types and levels of information that you and your
organization are willing to share.

Understand your and your partner organizations definitions, restrictions, and controls
on proprietary information.

Respect the sensitivity of partner organizations in areas that you might not consider
proprietary.

Seek prior understanding about what can be shared and / or how it might be used.

Consult legal counsel on restrictions or rights regarding proprietary information.

Intellectual Property:

Refers to the kind of property created from intellectual activities in the industrial,
scientific, literary, or artistic fields. It includes business and technical information (e.g.
scientific works, inventions, industrial designs, computer programs) and the material
that might lead to patents, copyrights, trademarks, service marks, and commercial
names or designations.
Know the internal organization source for any information that your organization plans
to provide in a benchmarking exchange.

Understand the nature and value of your organization’s intellectual property. Respect
the values of your benchmarking partner.

Seek prior understanding about what can be shared and how it might be used.

Consult legal counsel on restrictions or rights regarding intellectual property.

Conclusion

Knowing the nature of the benchmarking topic, dealing ethically and legally,
understanding information exchange latitudes, and following the Benchmarking Code of
Conduct.

will contribute to a successful and mutually beneficial benchmarking interchange.

Case Study: “Emirates Airline”

Presentation Structure

1. Benchmarking: a refresher
2. Case study
3. Challenges, paradigms and benefits
4. Benchmarking scope in airlines
5. Role of International Institutes
6. Beyond benchmarking…

Benchmarking

Benchmarking is the continuous process of measuring products, services and practices

against the toughest competitors or those companies recognised as industry leaders
(best in class)
There are numerous definitions of benchmarking, but essentially it involves
• Learning
• Sharing information
• And adopting best practices to improve performance

Purpose

• The purpose is to promote EXCELLENCE, generate new levels of performance, and new
standards in the organization.
Who should we benchmark with?

• Internal benchmarking
internal benchmarking is likely to meet with less resistance from managers
• Benchmarking with competitors (international benchmarking)
those competitors who are performing better than us
• Best in the Industry
with Industry leaders who achieved the best performance
• Cross Industry
some measures could be compared with best performance of any industry e. g. Finance,
HR measures

Case Study of Emirates Airline

• Emirates is selected for demonstrating the concepts

• Emirates is IATA registered growing airline
• Emirates is making profits year after year
• Sample data for 5 years
• British Airline, Ittehad Airline, Qatar Airways, Thai Airways and USA Airline are close
competitors with Emirates
• Analysis of Emirates performance using
• Internal benchmarking
• International benchmarking
Right Measures…Internal Benchmarking?

Emirates: Capacity & Load carried per employee

• The measures indicate a positive trend

• But… is it true the airline’s manpower productivity is improving?
• Let us analyze with a different metrics...
Right Measures…Internal Benchmarking?

Emirates: % improvement over 4 years

•The measures indicate altogether a different trend

•Is the airline able to leverage economies of scale successfully?
Selecting ‘appropriate’ measures and ‘intelligent
interpretation/modelling’ is vital in building effective “Management
Decision Support Tool”
Manpower productivity: Emirates Trend

• Is airline productivity improving…?

• Let us compare the recent performance with close competitors and analyze
International Benchmarking

• Is the Emirates productivity better than competitors?

• …Is there an opportunity for the Airline XX to revisit its Business Model?

Benchmarking Challenges

• Business Model variations

• Differences in annual periods
• Accounting methodologies and data reporting
• Environment impact
• Identifying ‘right measures’
• Balancing ‘lag’ and ‘lead’ indicators
• ‘appropriate’ analytical tools and techniques
• Management commitment & Leadership
• Employee engagement and motivation
Myths & Paradigms?

Benchmarking is not:
• Copying or imitating others
• In rapidly changing circumstances, good practices become dated very quickly. Also, the
fact that others are doing things differently does not necessarily mean they are better
• A quick fix, done once for all time
• Merely competitor comparison
• The objective is to figure out how the winner got to be best and determine what we
have to do to get there. Benchmarking is best undertaken in a collaborative way.
• The aim is to learn about the circumstances and processes that underpin superior
performance
• Spying or espionage
• Industrial tourism

What are the benefits?

• Effective ‘wake-up-call’
• Identifying performance gaps
• Awareness about performance
• Learning from others’ experiences
• Willingness to share information and solutions
• Innovate and generate new ways of doing things
• Encourage individual and organisational learning
• Adopting best practices
• Many more…….

Airline Scope

• Financial Measures
• Yield, Unit Cost, break even load factor, Value add and profitability…
• Operational measures
• Load factor, seat factor, fuel consumption, crew productivity….
• Qualitative and Customer Measures
• On Time Performance, denied boarding, mis-handled bags, customer complaints,
customer satisfaction….
• People Measures
• Average pay, Attrition, T&D investment, value add per employee…
• Process Measures
• Recruitment lead time, annual accounts closing lead time,
Service delivery GAP analysis models…
Benchmarking has become a management tool that is being applied almost anywhere…

Role of International Institutions

There is role for everyone

• Airline Management: Institutionalising the benchmarking process and leadership
• All of us: Promoting and changing mindset and paradigms
• AGIFORS: working group
• IATA, ICAO, FAA: standardise & regulate information needs
• Research Institutes: R&D
• Vendors: developing appropriate tools
• Airline consortiums: Partnering in sharing information and extending expertise

Beyond Benchmarking…

• Benchmarking is a process and not an end in itself

• Management through Key Performance Indicators
• Balanced Score Card
• Continuous improvement as the way of life
• Reengineering
• Six Sigma
• Embrace new systems and technology
• Invest in new capabilities and facilities
• Above all…..Engage Employees