What Can You Achieve by Benchmarking?

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Editor Coda
Nov 12, 2013

After speaking with a variety of shared services leaders and process owners about why they choose to benchmark, how they do it and what  they hope to achieve by doing so, I noticed that there appears to be a general pattern.

In the beginning stages, in order to accurately and efficiently report on data and to verify KPI targets and SLAs are being met, good performance measurement tools are needed. ERP add-ons, customizations and other business intelligence tools are often used help to automate the process and it is often thought to be sensible at this stage to benchmark externally to get a feel of how peers in the same market are doing.

There then comes a point when SSOs, particularly those running international back office operations, start to evaluate best-in-class processes internally. Before standardizing their processes KPIs are scrutinized in order to check that they remain relevant and this is commonly done through the use of customer feedback. If this leads to the need for definition (or re-definition) of service level agreements and KPIs then external benchmarking will continue as companies leverage consultants to clarify any gaps regarding current industry best practices.

Once an organization is happy that internal best practices have been implemented  globally,  external benchmarking can be ramped up to find out how leading competitors are performing and the difference between their own as-is processes and the leaders of the pack. A whole strategy is then put in place to bridge this gap.

Once an organization has options for bridging the gap, a cost benefit analysis is carried out to configure a best- process. By making sure that the process relates to the company’s global IT strategy and capacity, it can then be presented as a viable business case to the CFO which if approved, can then finally spell the beginning of an SSO’s journey towards becoming world-class.

Benchmarking, however is just one of the many steps that need to be taken towards moving into a best-in-class or world class status in the shared services community. It is clearly no easy feat and it depends on a whole host of components. For example, when I asked one global business services leader from a major multinational how his company have achieved its world-class status his top 3 ways were:

1.       Peer networking events

2.       Consultants

3.       Benchmarking tools

Although this represents just one company's means of getting there, it does display the important role that benchmarking plays in achieving the desired status. Benchmarking is something, that I think, would appear universally in any world-class SSO's strategy.

We at sharedserviceslink like to think that we are pioneers in showing the shared services community what leaders are doing right now to improve, and connecting them to the right people.

If you attended our US Shared Services Summit last month in Atlanta, you may have been lucky enough to have grabbed a sneak peak at something we are currently in the process of creating – and I’ll give you a hint – it’s something that could make benchmarking much easier for you.

I’d love to know about your benchmarking processes and goals, so why not send me a message enquire@sharedserviceslink.com – I’m here to make sure your views are incorporated into continuously improving your benchmarking, so you can set and achieve your improvement initiatives with confidence.

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