Benchmarking workshop

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Benchmarking workshop
Steve Straw Head of Cipfa Benchmarking
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Definitions

• The continuous search for and application of
  significantly better practices that lead to
  superior performance by investigating the
  performance and practices of other organisations
  (Westinghouse)
• a skill, an attitude and a practice that
  ensures an organisation always has its sights set
  on excellence, not merely on improvement
  (McKinsey Co)
• Stealing shamelessly. (Roger Milliken)
• Creative Swiping (Tom Peters)
• A process of adaptation not adoption (Watson)

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• Bill Cockburn Formerly BT Group Managing Director
  and Chief Executive W H Smith Group
• I subscribe absolutely to the concept of stealing
  shamelessly!..if its likely to work, pinch it
  theres nothing wrong with that.
• There is quite a respectable word benchmarking-
  which is the same thing..

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• Data is not your enemy it is your friend.
• You should make it your best friend!
• Clive Humby dunnhumby ltd.

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The Governments View (1999)

• Over the next five years, we will review all
  central and local government department services
  and activities by consulting with users by
  benchmarking and by open competition to
  identify the best supplier in each case (page
  40)
• The public sector must become a learning
  organisation. It needs to learn from its past
  success and failures. It needs to consistently
  benchmark itself against the best, wherever that
  is found (page 56)
• (The Modernising Government White Paper
  1999)

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The Governments View 2009

• All public sector organisations employing more
  than 250 people must collect and publish data
  using the audit agencies approved value for
  money indicators for back office operations with
  effect from June 2009 for central departments,
  agencies and NDPBs and by December 2009 for the
  wider public sector. Benchmarking information
  from across the public sector should be
  collected, checked and published on a regular,
  consistent, auditable and transparent basis in
  order to drive improved performance.
• Operational Efficiency Programme final report

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Benchmarking is about asking questions

• How well are we performing?
• Are we performing better year on year?
• How does our performance compare with other
  organisations?
• Can we learn from other high performers?

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Step 1 - Select Performance Measure Step 2 -
Benchmark Current Performance Step 3 - Identify
Current Gap Step 4 - Set Target Performance Step
5 - Produce Schedule for Managed Change
Own Performance
Future gap
Current gap
Comparators Performance
Now
Future
Benchmarking Gap Analysis Model Watson 1993
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(No Transcript)
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The Benefits of Benchmarking

• Provides realistic and achievable targets
• Challenges operational complacency
• Creates an atmosphere conducive to continuous
  improvement
• Allows employees to visualise the improvement
• Creates a sense of urgency for improvement
• Confirms the need for change
• Identifies weak areas and points to improvements

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Exercise
Calculate the cost of obtaining 10 apples and
getting them to this room. You can be as
innovative as you like
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What did your apples look like?
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The Pitfalls

• Not comparing like with like
• Resources required
• Poor quality data
• Just quantitative data
• League Tables
• Stifling Innovation

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The Enemies of Benchmarking

• Fear
• Pride
• Apathy
• Ignorance

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Success Story

• In August 2006 Hackney Council benchmarked their
  accounts payable process with the Chartered
  Institute of Public Finance and Accounting.  We
  found that we were one of the worst in the
  country in terms of cost per invoice. Therein
  started a journey to strip out costs, stop losing
  invoices, introduce efficiencies across the P2P
  process, and ensure everything was done to pay
  suppliers on time. First came the mapping
  exercise, where different types of invoices were
  mapped in terms of their processes, and
  challenged as to the way they were processed.
  70,000 suppliers were consolidated into a
  remarkable 3,500 and the contracts spend
  increased by 65. Hackney Council is now in the
  continuous improvement phase and has arrived at
  an impressive 400K saving.