Due to the need to use external factors that influence or may influence the behavior of a company and its products in the market, interaction with partners and competitors, a philosophy and function was required related to the identification, search for results of practice in partner companies, competitors and related industries, with a view to using them in their own firms to increase productivity.

Benchmarking is close to the concept of marketing intelligence. However, marketing intelligence is the collection of confidential (semi-confidential) information about changes in the external marketing environment.

The use of benchmarking is multidirectional. And although since the mid-70s. Since it was carried out as part of a competitive analysis, today benchmarking has successfully established itself as a way to evaluate the strategies and goals of work in comparison with leaders in their own and related industries in order to guarantee a long-term presence in the market.

Benchmarking (English bench - place, marking - mark) is a way of studying the activities of business entities, primarily competitors, in order to use their positive experience in their work.

Benchmarking includes a set of tools that allow you to systematically find, evaluate all the advantages of other people's experience and organize their use in your work.

Benchmarking is aimed at studying business. In relation to innovation, it means studying the business of other enterprises or entrepreneurs in order to identify the fundamental characteristics for developing their innovation policy and specific types of innovation. When benchmarking, it is important to overcome the psychological complexes of managers and specialists.

Psychological complexity means:

Satisfaction of the head of the business entity with the results achieved;
reluctance to risk money, i.e. spend money on acquiring information, pay for consultations with analysts and experts, saving all types of resources and monetary costs for marketing research, etc.;
fear that it is very difficult or impossible to do better than a competitor due to the high costs of all resources, including money.

There are two types of benchmarking: general and functional.

General benchmarking is a comparison of the production and sales performance of a given manufacturer’s products with the business performance of a sufficiently large number of producers or sellers of a similar product. Such a comparison allows us to outline clear directions for investment activity. The parameters used to compare product characteristics depend on the specific type of product.

Functional benchmarking means comparing the performance parameters of individual functions (for example, operations, processes, work methods, etc.) of a manufacturer (seller) with similar parameters of the most successful enterprises (sellers) operating in similar conditions.

A special working group is usually created to carry out benchmarking.

The functional benchmarking methodology consists of the following stages:

1. Selecting a specific business function of the manufacturer (seller).
2. Selecting comparison parameters for a given business function. In this case, one parameter or a group of parameters can be used. The only one, i.e. An unambiguous comparison parameter for a business function can be, for example, the profitability of an operation, the level of costs of an operation, the duration of the active period of using this function, the degree of risk, etc. A group of parameters is used when comparing complex business functions such as product quality management, cash management, etc.
3. Collection of necessary information about similar manufacturers.
4. Analysis of the information received.
5. Development of a draft of changes made to this function.
6. Feasibility study of the proposed changes.
7. Implementation of changes in the practice of organizing this business.
8. Monitoring the progress of this business and final assessment of the quality of changes in this function.

The effectiveness of the technique in question depends on the correct organization of the system for collecting information in various fields in the open press, when analyzing products, at exhibitions, in the position of a competing company in the market, the use of former employees of these companies, etc.

Practice shows: the process of improvement is limitless. Benchmarking is, one might say, a perpetual motion machine in the continuous process of continuous improvement of a company's performance.

The reasons for the sharp increase in the popularity of benchmarking in recent decades are obvious. Competition has become global, and most companies are beginning to recognize the need to comprehensively and in detail study (and then use) the best achievements of other companies for the sake of their own future success. In order not to be left behind by their competitors, all companies, regardless of size and field of activity, need to constantly study and apply best international practices in all areas of business activity and adopt all types of effective technologies.

Benchmarking is:

Methodology for comparative analysis of the performance of the company and its divisions and borrowing knowledge and achievements from other companies that are the “best of the best” in their field;
systematic activity aimed at finding, evaluating and learning from the best examples, regardless of their size, business sector and geographical location;
the art of discovering what others do better than us and learning, improving and applying their methods of work;
a process of systematic and continuous measurement: assessing the processes of an enterprise and comparing them with the processes of leading enterprises in the world, in order to obtain information useful for improving its own characteristics;
a special type of activity to search and obtain information about the best solutions used in the activities of other companies. These companies may be competitors, although the most successful borrowings can most often be obtained from those firms that operate in completely different industries, regions, markets, other countries, etc.

Before you can answer the question: “Which companies are the best?”, you need to answer two other questions, namely: “What in your company needs improvement first?” and “How capable is your company of change in this area?” To answer questions, it is necessary to involve competitive intelligence specialists: primary improvements appear as a result of comparisons of one’s own activities with the activities of a competitor.

The three-step selection of a benchmarking partner is called the STC process. Its name comes from the initial letters of three English words - skim, trim, cream. The first stage is S - a quick review (from “to skim” - read quickly, skim), when they make a general overview of available sources of information, and also collect additional available data. The second is T - putting in order (from “to trim” - to trim, polish, put in order), a detailed description of the information available at that moment. The third stage - C - selection of the best (from “to cream” - “skim the cream”), selection of suitable partners. In the STC process, competitive intelligence is used at all stages.

At the same time, the competitive intelligence service works for benchmarking in two modes. The first is the establishment of those elements of activity (business processes, directions, rules, technologies, procedures, etc.) in which competitors are superior to your company. The second mode is to understand who is superior to competitors in the same positions.

A comparative analysis is carried out by type of activity, divisions, and the company as a whole in order to identify strengths and weaknesses and establish the best work practices.

The main questions of the analysis are: how others do it;
why do they do it differently;
what conditions allow them to do this better.

Benchmarking should be understood as a research process carried out in parallel with market research and competitive intelligence. Benchmarking is aimed at a detailed study of the internal organization, structure and activities of another enterprise, from which one can learn something useful and important for one’s own work.

Benchmarking is a comparative assessment of the effectiveness of the tested and reference system, the correct functioning of which there is no doubt. Comparing the performance of two systems allows you to verify the correct functioning of the system under test. The efficiency, correctness and speed of the system when performing a specific task is determined. Benchmarking is, in essence, a development of the method of analogies, which, in turn, consists in the use of organizational forms and management mechanisms that have proven themselves in companies with similar organizational characteristics (goals, type of technology, specifics of the organizational environment, size, etc.) in relation to the analyzed organization.

According to the concept of benchmarking, any business process must be marked, i.e. structured in such a way that it is possible to determine how successfully a business process is proceeding and plan the implementation of changes that can track the company's future achievements in the field of improving business processes.

With the help of benchmarking, it is determined why a partner organization has achieved positive results in a particular area and what actions led it to success. There are two categories of data obtained from benchmarking results: first, the organization’s performance indicators (what has been achieved); secondly, how and through what methods and technologies this was achieved. Analyzing only one category of data does not provide a complete picture of the organization's activities. Comparisons should be made using the same indicators and in the same areas.

TYPES OF BENCHMARKING

Currently, several types of benchmarking are known. each of which has its own advantages and disadvantages.

Functional benchmarking is a comparison with organizations that are not among intra-industry competitors, but carry out functional activities in which the organization is interested in improving (for example, storage, transportation). Advantages of functional benchmarking: Functional leaders are easy to identify, there are no privacy concerns, and there is ample opportunity to discover unique, effective approaches or technologies that may be beneficial to the organization. But the specifics of functional benchmarking make it difficult, and sometimes simply impossible, to adapt the research results to the characteristics of the organization carrying out functional benchmarking.

Internal benchmarking - making comparisons between different departments of an organization. Internal benchmarking consists of comparing various services and divisions of one company with each other in order to determine the most effective methods of work to make a product or service more competitive. The ease of organization, conduct, and collection of information necessary for comparison determined the spread of this type of benchmarking. General benchmarking is the most complex and difficult to implement type, allowing you to compare business processes occurring in organizations belonging to different industries. This type provides the best opportunities for intra-organizational improvement.

Competitive benchmarking - comparison is made with a company in the same industry (competitor) or a partner company from other industries.

In addition, depending on specific problem areas, cost benchmarking is distinguished, which is aimed at reducing costs, identifying factors influencing their formation, searching for differences in cost formation between companies and its other types.

Benchmarking example

A good example of the use of such analysis is the history of the Ford company. Its experts carried out benchmarking in the 90s, when the company’s position in the market was seriously shaken. During this analysis, studies were carried out on car models, the number of which exceeded 50.

These studies were conducted to clarify the advantages and, accordingly, disadvantages of each. Based on this analysis, the parameters of the best car were identified, which would allow it to achieve the performance of competing companies and even surpass them.

The result of this company was the Taurus car, which became the car of the year. Subsequently, the model lost its position due to the fact that improvements began to be made that deviated it from the original development concept, based on the analysis of competitive models.

This company has long been recognized as an international organization engaged in the creation of mobile devices and services. Nokia uses benchmarking to maintain its market position and develop by monitoring time and progress in all areas of its activities (logistics, research, development, partner relations, team).

This company is a consulting firm that engages in market research, identifying profitable strategies and providing various types of services that allow companies to establish business processes. GIA constantly produces various seminars on benchmarking. A typical project for this company includes 2 thematic seminars where various business and analysis issues can be discussed.

Each seminar can be devoted to the following topics:

1. Economic improvements based on examples.
2. Training in profitable business management based on the experience of competitors.
3. Exchange of basic strategies and ideas between competent specialists from various fields of business activity.
4. Training based on mistakes made by other companies, as an opportunity to avoid incorrect and unnecessary financial expenses in your own work.

Benchmarking method

Benchmarking is a method of objectively systematically comparing one's own activities with the work of the best companies (divisions of one's company), understanding the reasons for the effectiveness of partners' business, organizing appropriate actions to improve one's own performance and their implementation.

Action plan:

1. Identification of those aspects of the company’s activities by which consumers identify suppliers who have achieved business excellence.
2. Establishment of a reference company with which performance indicators will be compared.
3. Determining how the reference company can achieve a high level of efficiency.
4. Establishing performance standards for key aspects of the company's operations that exceed the performance level of the reference company.
5. Identifying what needs to be done to bring the company's performance to an optimal level.
6. Developing a plan for implementing the received ideas in order to bring the business into compliance with standards and obtain superiority over them.
7. Fulfillment of planned plans.

Features of the method

The concept of benchmarking is not new. The roots of the concept of benchmarking go back centuries. As a standard for assessing the level of products, benchmarking has been used in organizations around the world since the early 90s of the last century.

In Russia there was a powerful system of scientific and technical information. In the 70-80s, a map of the technical level of products was prepared, introduced by GOST 2.116-76. Each product subject to state certification was assessed based on basic functional and consumer indicators in comparison with the best world standards.

Benchmarking is an ongoing process, not a one-time event. As consumer demands are constantly changing, the performance of competing companies is also changing.

Accordingly, the standards against which benchmarking is carried out also change, and only continuous benchmarking can help a company quickly learn about all innovations and profitably apply them in practice.

Competitive comparison indicators: price, quality, customer care and service, customer feedback, delivery, product variety, new products and services.

Established theory and practice considers the types of benchmarking depending on the object of comparison and what is being compared. The best results are obtained from a combination of general benchmarking, which involves enterprises from other industries, and process benchmarking.

Additional Information:

1. Don't copy, but create. A company should not copy approaches adopted by other companies because they may not fit its business environment, products, market or culture.
2. Solutions and approaches must be future-oriented.
3. The object for benchmark comparison should be indicators that correlate with key factors of success in competition.
4. Benchmarking is a beneficial process, but it requires proper application.

Advantages of the method

Provides a competitive advantage.

Disadvantages of the method:

The secrecy of companies and their own “secrecy” complex.
Existing systems of company financial accounting and taxation do not always allow obtaining real data on certain indicators.

Identification of the most important factors of the problem under consideration, highlighting the characteristics of these factors to prepare options for possible solutions and their implementation.

Process benchmarking

It is important to remember that successful benchmarking requires identifying the root causes of high performance. While it is helpful to start by collecting general information about what other companies do, the ultimate goal is to discover how they operate. The term “implementation tool” in benchmarking refers to the main factors that allow a company to achieve high efficiency, for example, in the field of product production, business processes or resource use.

Products and services

One common and natural starting point is to become fully focused on the company's products and benchmark a competitor's product, service, or entire offering. Product benchmarking improves overall understanding of one's own competitive position in the market and can rely heavily on secondary research. It is more difficult for service companies to benchmark against competitors' offerings because the effectiveness of services is not as easily measured as with physical products. Therefore, successful benchmarking of services often requires a large number of interviews and field studies.

Financial indicators

Net performance benchmarking does not always address fundamental competitiveness issues. However, it helps to quantify possible achievements and set goals. In addition, financial performance benchmarking can often be done at relatively low cost using publicly available information.

Business processes

Benchmarking is often aimed at business processes due to the very structure and effectiveness of this method. Business processes are of great importance because they reflect the company's capabilities and are thus very close to the fundamental tools for realizing competitiveness. It often turns out that two companies had access to the same resources and customer base, but one of them organized its business processes more efficiently and provided higher quality at lower costs.

However, gathering information about competitors' processes is not an easy task and may require significant primary research. When conducting business process benchmarking, competitors are an obvious, but not the only, benchmark option. Often, good results can be achieved by leveraging information sources across a competitor's entire value chain, including suppliers and distributors. In addition, benchmarking results from companies in other industries can provide valuable information.

Strategies

Making effective strategic decisions requires knowledge of competitors' strategies. However, as with processes, strategy analysis can be difficult to achieve. A significant amount of information about a company's strategy can be obtained from public sources, but many aspects of the strategy are never publicly disclosed. Despite this, it is still possible to conduct successful benchmarking of strategies based on the results of primary research and analysis of a company's strategy using abductive reasoning.

Functions, groups and organizations

Benchmarking is designed to reveal not only what other companies are doing, but also how they manage to do it. Therefore, studying the structure and organization of work in a company is one of the common topics when conducting benchmarking. We can talk about any aspect of the organization of the company's work: approved functions or created groups, divisions and business units, the number of employees working in them, etc. Part of benchmarking an organization can even be the compilation of characteristics for individuals.

The use of social media, such as professional networking websites, has become a new reliable source of information for this type of benchmarking. This method allows you to reduce the cost of visiting specialists and expensive primary research, and with relatively little effort you can discover a large amount of valuable information.

Benchmarking an organization

Modern management is a special creative synthesis of the following three key components:

1) management as a science;
2) management as an art;
3) management as the experience of successful business practice.

Edward Deming said: “Experience teaches (makes it possible to plan and predict) only when we use it to modify and understand theory.” Modern theory and practice of leading organizations are objects of close attention of benchmarking.

Benchmarking is a continuous process of assessing the level of products, services and methods of work based on comparison with the strongest competitors or those companies that are recognized as leaders (Xerox CEO D.T. Kerns). The American Productivity and Quality Center believes that benchmarking is a process of continuous research into the best practices that determine the highest competitive characteristics. Robert S. Camp, a luminary of benchmarking dating back to the Xerox days, characterizes benchmarking as “the continuous search for solutions based on industry-wide best practices and processes that enable an enterprise to achieve its highest achievements.” Benchmarking is a continuous process of discovering, learning and evaluating the best in other organizations with the aim of using the knowledge in the work of one's organization (H. J. Harrington, J. S. Harrington).

All these definitions are united by the continuous activity of collecting and implementing best practices with one goal - to be a competitive company for many years to come. It is the continuity of the development and improvement process that allows a company to go down in history, and not fade away, unable to withstand the next change in the market situation.

In this regard, benchmarking acts as a powerful tool through which an organization can conduct comparative analysis of products, equipment, personnel and processes. It allows the organization to realize the need to break away from the old way of doing things and makes it possible to understand that only through constant change for the better can the company survive. Every year the popularity of benchmarking increases in the world.

What is the reason for this, why are more and more organizations turning their attention to this tool for development and gaining a competitive advantage?

Jason Grayson Jr., head of the International Benchmarking Clearinghouse, identifies the following reasons for the popularity of benchmarking:

Global competition. In the era of business globalization, companies are aware of the need for a comprehensive and detailed study of the best achievements of competitors and the subsequent use of the information obtained for the purpose of their own survival.
- Reward for quality. Competitions for the title of leader in quality are becoming increasingly common at the national level. A mandatory condition for participation in them, in addition to the demonstration by participating companies of the competitive advantages of their products, is the use of the concept of benchmarking.
- The need to adapt and use world achievements in the field of production and business technologies. To avoid being left behind by their competitors, all companies, regardless of size or industry, need to continually learn and apply best practices in manufacturing and business technology.

The development of benchmarking contributes to openness and increased business efficiency. It makes it possible to get answers to questions posed by the practice of the organization, and has undeniable advantages.

Benchmarking an organization

No organization today can survive without seriously studying the strengths of its competitors and learning from the best in its field. The need for the benchmarking process is that it not only tells you how successful you can be, but also shows you how to change the way you do business so that you can be more effective. Truly, what's the point of identifying the gap with your competitors, industry leaders or world-class organizations if you don't know how to improve your processes to close the gap?

Edward Tracy, vice president of AT&T's MMS Division, noted the enormous success of benchmarking: “What this process allows us to do is look for weaknesses. It is a structured discipline for analyzing a process and identifying opportunities for improvement. Just 12 months ago I was a skeptic. But when I saw it in action, I realized the benefits of this process.” Benchmarking is the path to excellence. A large number of people, teams and organizations want to be recognized as the best. Excellence gives: clients; high level of remuneration; confession; respect; power; satisfaction of employees and management.

On the path to excellence, an organization must take the following steps:

1. Find out your strengths and weaknesses.
2. Find out how competitors have achieved success in the area where you want to become the best.
3. Use the best techniques of competitors in your activities.
4. Based on the acquired experience of the best, develop more advanced methods.
5. Never stop improving.

The benchmarking process will help you get to know your organization, determine its competitiveness, identify best practices and incorporate them into your business assets.

As an object for benchmarking in an organization, H. James Harrington and James S. Harrington identify:

Business processes;
- equipment;
- production processes (product manufacturing processes);
- Products & Services.

Benchmarking helps to better meet consumer requirements. The consumer always wants to get the best products at the lowest prices. This requirement acts as guidelines for benchmarking the efficiency of the enterprise and product prices. By conducting benchmarking, the company has the opportunity to check how realistic it is to meet these requirements. The time has come to answer the main question of our reasoning: “How should benchmarking be carried out?”

Ten steps of the benchmarking process were proposed and justified by Robert Kemp:

1. Identification of benchmarking objects.
2. Selection of partners for benchmarking.
3. Determining the most appropriate method of collecting information. Data collection.
4. Establishing existing gaps between the company and its partners in terms of selected performance indicators.
5. Establishing the desired levels of company performance.
6. Communicating benchmarking results to all stakeholders and obtaining assistance in applying them in practice.
7. Establishment of specific goals and objectives in the field of increasing the efficiency of the company.
8. Development of action plans to achieve and solve them.
9. Carrying out planned activities and monitoring their results.
10. Revision of previously selected benchmarks.

The hardest part of the benchmarking process is accepting that your organization doesn't know enough, but those who have taken the difficult path of change have achieved impressive results.

Digital Equipment Corporation (DEC - digital equipment). DEC benchmarked its manufacturing operations and found that they were running 30 to 40 percent above cost.

As a result of process and product benchmarking, the following changes occurred:

The duration of the new product development cycle has decreased from 30 months to 12;
- the cost of developing a new product decreased by 25%;
- in electricity generation and modular processes alone, the cost of improvement opportunities is determined to be $300,000;
- benchmarking of property management processes led to an additional cost reduction of 12.7%;
- in one of the logistics services, inventory turnover increased by 30%, and productivity increased by 25%.

The Ritz-Carlton hotel chain received the following benefits as a result of process benchmarking:

Room cleaning time has been reduced to 65%;
- the number of quality complaints decreased by 42%;
- productivity per employee increased by 15%;
- the number of intrusions by service personnel into residents’ rooms decreased by 33%;
- the level of room security during room cleaning has increased.

The benchmarking procedure reduces the cost of goods and services, cycle times and error rates by an average of 20 to 60%. In contrast to the usual rate of continuous quality improvement of 10-20% per year, the use of benchmarking can guarantee progress of up to 200% in just eight months.

As a result of a survey of 770 organizations in Europe, the Benchmarking Center (UK) found that:

Tom Carter, vice president of quality at Alcoa, said, “We use benchmarking to find out what levels of efficiency can actually be achieved and how to close the gap between current and optimal levels of efficiency.”

Benchmarking is the ongoing activity of systematically identifying the best systems, processes, procedures and practices. A benchmarking project that reduces production cycle time from 30 days to 3 days, but does not increase the organization's market share, value added per employee, return on assets, or increases customer or customer satisfaction, is not the right solution. Benchmarking processes that implement cost-effective solutions actually improve the functioning of the organization. Recently, one of the pioneers of benchmarking in Germany, Professor Rolf Pfeiffer from the Export Academy in Reutlingen, was asked the following question: “Which management tool would you recommend for an organization if the enterprise has already been operating successfully for several years?” Professor Pfeiffer's answer was immediate: “Benchmarking!” The businessman was surprised and asked about the reasons. The answer was short: “If someone - whoever he is - works successfully over a long period of time, he begins to consider himself wise. In the confidence of his “omniscience,” he begins to forget about competition. But your competitors will overtake you, and I will fight you as soon as you show any weakness.” Thus, benchmarking is precisely suitable for enterprises that are satisfied with their performance, but at the same time want to compare their achievements with competitors.”

There are very successful German companies. There are many brilliant businesses in Europe. These highest achievements do exist. So why are these high results impossible for you? You don't need to reinvent the wheel to do this. You need to be willing to look at your business from a critical perspective and learn from others. There is no doubt that a benchmarking project is an expensive undertaking - a real benchmarking study usually takes about six months - but there is always a way out. Benchmarking competitions provide significant assistance in this regard.

Industry competitions, such as the International Best Factory Awards/International Best Service Awards, for industrial and service enterprises, which are successfully held throughout the world and enjoy government support from the organizing countries, do not have all these shortcomings.

In Germany, for example, the Export Academy in Reutlingen organizes an annual benchmarking competition. The winners receive the International Best Factory Award, abbreviated as IBFA. The International Best Service Award (IBSA) has also been established. At the same time, the Academy cooperates with the Cranfield University School of Management in England and SDA Bocconi in Milan.

In Germany, these events help you look at your potential from the outside and see opportunities for improvement.

The statement of one of the competition participants is a clear confirmation of this: “Four aspects turned out to be especially useful for us:

Success through analysis: Each participation is accompanied by research into your own enterprise. This step alone often brings ideas that will not appear just like that.
- Success through partnership: Competitions provide many contacts. The enterprises taking part in them are ready for openness. In this way, an important exchange occurs - which can develop into a partnership and benefits all participants.
- Success through change: Constructive consideration of one's own strengths and weaknesses strengthens one's sensitivity to important potential opportunities. Once they are identified, the only question that remains is how to change yourself accordingly in order to be able to take advantage of them. These proactive changes keep the enterprise in shape.
- Success through orientation: Only regular comparison with other successful enterprises provides a starting point for one’s own success.”

The slogan of the German company “Rose plastic”:

“He who no longer strives to become better can no longer be successful” best expresses the general meaning of the above aspects of the competition.

Many companies are critical of benchmarking. However, once the process is complete, benchmarking becomes part of the enterprise philosophy.

Reviews from companies participating in the competition:

“We started to work intensively on our processes and began to understand them better.”
“After filling out the questionnaire, we understood what indicators needed to be assessed. We didn’t pay attention to many numbers before.”
“Benchmarking has brought us a culture of continuous learning and improvement.”
“After involving all departments and employees in the benchmarking process, everyone began to better understand the company’s processes.”
“After we won the benchmarking competition, our employees are proud to work for us.”
“Thanks to benchmarking, our goals have become clearer and we now know our strengths and weaknesses.”

Successfully implementing strategy is another key issue that benchmarking addresses. In fact, benchmarking is an alternative method of strategic planning in which tasks are determined not based on what has been achieved, but on the basis of an analysis of competitors' performance.

Benchmarking technology brings together strategy development, industry analysis and competitor analysis into a single system. Industry analysis is the first step in developing a strategy. It includes examination of the extent and nature of competition, customer behavior patterns and purchasing power, supplier behavior patterns, industry entry barriers, threats of product and service substitutes, and other features. Industry analysis provides material for calculating industry average profit potential and helps identify the reasons why some companies outperform others. Competition analysis allows you to understand how much attention a competitor pays to your business areas, that is, how much resources he will spend on developing these areas. Having decided on industry analysis and competitor analysis, we proceed to the strategy development stage. You need to answer the question, how can your company beat the competition? Using key success factors in the context of various functional areas: expansion of production, introduction of new products and services, changes in pricing, sales and delivery, marketing, personnel, technology, etc.

This operational work is carried out by the organization every year, requires the diversion of large financial resources and utilizes the potential of the company’s employees. A significant reduction in time, and most importantly financial resources, comes from annual participation in a benchmarking competition, where the company receives a comparison of results not only within the industry, but also in an international project receives criteria for the development of organizations in other countries. Information as a magical source and the beginning of the strategic planning process becomes available to you in the form of a report for the competition participant. To become competitive, you need to improve at a faster pace than your competitors and look beyond the national scale to see the opportunities and opportunities of the global community. It is best to carry out checks regularly and under the same conditions - but at least once a year. Then the manager immediately sees progress and can set new goals and develop a program for achieving them in the context of a really changing market situation.

Analysis of statistical data from enterprises participating in the IBFA / IBSA competition in Germany records the following positive changes in enterprises:

Increased personnel qualifications;
- improving product quality;
- reducing the number of manufacturing defects;
- reduction of costs for eliminating defects;
- increasing the reliability of supplies;
- improvement of production planning and organization;
- reduction of the cycle of introducing new products;
- change in the scale of companies.

The best results are achieved by those companies that take a comprehensive approach to continuous improvement and integrate all improvement activities. “A modern company, like a high-class athlete, must constantly maintain excellent shape in order to withstand competition with competitors and win against them in the context of an unprecedented tightening of competition caused by globalization, when it has to compete with the best world players not only externally, but also internally. domestic market." To do this, the company needs benchmarking - a relatively new approach to strategic planning of companies, but one that has become very promising in recent years in management circles.

Benchmarking of enterprises

The formation of the concept of benchmarking in the world has gone through several stages of its development:

1. Product analysis;
2. Competitiveness benchmarking;
3. Process benchmarking;
4. Strategic benchmarking;
5. Global benchmarking.

In theory, there are several types of benchmarking:

1. internal benchmarking - carried out between departments in one organization;
2. competitive benchmarking - comparing the performance of your company with competitors;
3. functional benchmarking - comparison with organizations that are not competitors;
4. general benchmarking - comparison of business processes with organizations belonging to different market sectors.

Speaking about the history of benchmarking, it can be mentioned that the Global Benchmarking Network (GBN) was established as a community of independent benchmarking centers. Created by countries such as the USA, England, Italy, Germany, Sweden. Today it unites similar centers in about 20 countries. In the USA, there is the Malcolm Baldrige Quality Award, which involves the active use of benchmarking tools. As for the legal restrictions on benchmarking, US law does not impose any restrictions. In European countries, on the contrary, Article 85 of the European Treaty prohibits the signing of agreements with other enterprises that could harm free competition or harm the European market.

In Russia, the use of this method is still insufficient compared to countries such as the USA, Japan and others. For example, the use of benchmarking in foreign countries is regulated and supported at the state level, specialized companies are created to find benchmarking partners, but in Russia there is no such practice. In our country, there is only one annual major event that supports the development of benchmarking - the “Government Quality Award”, thanks to which an enterprise can improve various aspects of its activities and become a standard for comparison with other enterprises. The award also allows laureates to ensure their image, establish themselves as a reliable manufacturer of high-quality products, and helps attract new partners.

The table shows examples of the use of various types of benchmarking at Russian enterprises.

Examples of the use of different types of benchmarking at Russian enterprises:

As can be seen from the table, competitive benchmarking is very popular in Russia.

The paper describes the experience of using benchmarking of Western enterprises at the Irbit Motorcycle Plant (IMZ) in the following areas:

Production structure of the enterprise: it was necessary to determine which production units to retain; After studying Western experience, management decided to sell the foundry, forge and several other shops, as a result of which IMZ saved money on maintaining unnecessary equipment.
- production efficiency: the Indian motorcycle company Royal Enfield was considered as a standard; It turned out that approximately the same number of people work at the standard under study, but per employee, Royal Enfield produces 25 motorcycles, and IMZ produces 1.7. It was decided to apply the following measures: reduce equipment downtime, train workers in additional professions and improve their skills.

The objects of competitive benchmarking can also be other areas of the organization’s activities, for example:

Production indicators: OJSC Severstal, a metallurgical plant with a full production cycle, benefited from the experience of several domestic companies and 56 Western metallurgical companies; After the analysis, areas in which work needed to be carried out were identified, namely: cost reduction, market development and the introduction of new technologies.
- product quality: the management of the Stepan Razin plant turned to the Baltika plant to compare the quality of the beer produced; The result of the analysis was the purchase of new equipment for beer fermentation, after which the quality of the product noticeably improved.
- reporting indicators: Peter-Star CJSC, a telecom operator, compares reporting indicators in a certain format with another similar company Golden Telecom. Some performance indicators are compared with data from Svyazinvest.

An example of functional benchmarking can be the activities of the Nizhpharm company. The object of comparison with the reference enterprise, which was the Wimm Bill Dann company, was the display of goods in pharmacies. After conducting research, it turned out that Wimm Bill Dann products are always in the best places. After analyzing their activities, the management of the Nizhpharm company changed its approaches to merchandising and came to the conclusion that the best place in the pharmacy for medicines is to the right of the cash register window.

Another type of benchmarking is internal. It is used when there is a need to analyze processes or the work of employees in one organization. In this work we can get acquainted with an example of the use of benchmarking in the banking sector. The use of the internal type of benchmarking is also clearly described in the work where it was used by the management of the main clinical hospital (CCH) No. 1 of the city of Novosibirsk. The object of the study was the quality of medical care. Among all departments, the three best were selected and then their experience in the organization was set as an example for other departments of the hospital, which were asked to apply it.

Despite the examples presented, the use of this method is still on an insignificant scale in our country. For its successful application, it is necessary to take into account the specifics of Russian enterprises.

The following can be identified as reasons hindering the full and successful use of benchmarking:

1. Insufficient development of a full-fledged ethical culture of companies;
2. Lack of sufficient practice in our country;
3. The influence of the peculiarities of national accounting;
4. Insufficient use of management accounting procedures;
5. Lack of trust in reference enterprises and benchmarking partners.

Company benchmarking

First, benchmarking helps identify best business practices and successful business processes. It is often unclear how successful companies achieve operational excellence. By observing and scrutinizing the work of these companies, you can identify the processes, skills or competencies that contribute to their success, and then apply the same methods to your own company.

Secondly, the knowledge gained from other businesses can be easily applied to your organization.

Third, a company can gain a competitive advantage by applying best practices from other industries to its business area. For example, a small family farm selling its own agricultural products online can use the same strategies as social media, such as online blogs, to gain attention and gain new customers. This will be a new way to attract customers and may lead, at least temporarily, to a competitive advantage.

There are three main types of benchmarking:

Strategic benchmarking. To determine the best way to maintain their competitiveness, companies identify winning strategies (usually outside their industry) of successful firms and implement them internally. In addition, strategic goals are compared in order to identify new strategic decisions.

Benchmarking based on performance indicators (competitive benchmarking). This type of benchmarking is based on a comparative analysis of your company's products and services. Benchmarking primarily focuses on product and service quality, product performance, price, benefit, reliability, design, and customer satisfaction, but can include anything that has measurable metrics, including processes. Performance benchmarking helps you determine how well your products and services compare to those of your competitors. Process benchmarking. The basis of this type of benchmarking is to study companies whose operations are similar to yours, with the goal of identifying best practices that you can apply to your own business processes in order to improve their efficiency. Process benchmarking is a separate type, but it usually follows from competitive benchmarking. This is because companies first identify the weak competitive points of their products or services and then focus on key processes to address those weaknesses.

Four ways of benchmarking:

In addition to the types, there are four ways to carry out benchmarking. It is important to choose the best one: this will reduce the costs of benchmarking and increase the chances of finding the “best standards” that you can really rely on.

Internal benchmarking. In large organizations that operate in geographically dispersed locations or manage the production of a large number of different products and services, the same functions and processes are carried out by different teams, divisions or departments. In some departments this is done well, in others it is worse. Internal benchmarking is used to compare the performance of individual teams, divisions or departments in order to highlight those that perform better and disseminate their knowledge and experience within the company to other teams to achieve higher performance. This is typically used by companies that have recently expanded geographically but have not yet established proper knowledge sharing systems between departments. If such systems are in place, then there is no need to use internal benchmarking to implement best practices.

Functional benchmarking. It is useful for managers of functional departments to analyze how well their departments are performing compared to similar ones in other companies. It's fairly easy to identify the best marketing, finance, HR, or operations departments in other companies because they excel at what they do, and then apply their techniques to your own functional areas. With this method, companies can look at a wide range of organizations that are not even related to an industry, and instead of improving individual processes, they can improve entire functional areas.

General benchmarking. General benchmarking refers to comparisons that “focus on excellent work processes rather than on the business practices of a particular organization.”

Competitive benchmarking

The purpose of benchmarking is to establish, based on research, the need for change and the likelihood of success as a result of that change. Benchmarking is carried out as part of competitive analysis and is not new to most businesses, although it is a more detailed and streamlined function than the competitive analysis method or approach.

Types of benchmarking:

1) Competitiveness benchmarking - measuring the characteristics of an enterprise, examining specific products, process capabilities or administrative methods and comparing them with the characteristics of competitors.
2) Internal benchmarking - the characteristics of production units are compared with similar business processes within the organization.
3) Functional benchmarking - compares specific functions of two or more organizations in the same sector.
4) Process benchmarking - the performance of certain processes and limited functions is compared with enterprises that have the best performance in similar processes.

When conducting benchmarking, the following stages can be distinguished:

Definition of the benchmarking object;
Selecting a benchmarking partner;
Search for information;
Analysis;
Implementation.

Competitive strategy is a set of techniques and initiatives aimed at attracting and satisfying customers, confronting competitors and strengthening market position. The concept of competitive strategy is narrower than the concept of business strategy, because the latter, in addition to the methodology of competition, includes the actions and plans of management to solve the entire range of strategic tasks.

The goal of competitive strategy is to achieve superiority over competitors in providing consumers with in-demand goods and services and thereby gain competitive advantage and market leadership. In addition, competitive strategy includes offensive and defensive actions, allocation and reallocation of resources to maintain long-term competitive capabilities and an advantageous competitive position, as well as tactical actions taken when market conditions change. Businesses around the world are trying to develop innovative competitive strategies. Because a company's competitive actions are tailored to its market position and overall industry environment, there are countless options for competitive strategies—as many competitive strategies as there are competitors.

However, in general, differences in strategies are determined by two factors: the goals that the organization pursues in the market, and the basis of competitive advantage - low costs or differentiation:

1) Cost leadership strategy, which involves reducing production costs and, as a result, the possibility of setting lower prices for products, which, in turn, attracts a large number of consumers. This strategy is theoretically based on the “effect of accumulated experience”: the longer an enterprise operates and produces more products, the lower the unit costs per unit of output.
2) A strategy of broad differentiation, which is aimed at giving the company’s products specific properties and features that will distinguish them from competing products. A broad differentiation strategy also focuses on attracting more consumers through product features that better suit customer needs.
3) The third approach refers to fixing a specific market segment and concentrating the firm's efforts on a selected market segment (segmentation strategy). In this case, the company thoroughly determines the needs of a certain market segment for a certain type of product. In this case, the company may strive to reduce costs or pursue a policy of specialization in the production of the product. It is also possible to combine these two approaches. However, what is absolutely mandatory for carrying out a strategy of the third type is that the company must base its activities primarily on an analysis of the needs of customers in a certain market segment. That is, it should base its intentions not on the needs of the market in general, but on the needs of very specific or even specific clients. The market segment is determined by income.

You can always distinguish between mass-produced goods and luxury goods:

A market niche strategy based on low costs, which focuses the enterprise on a narrow segment of consumers, where the enterprise is ahead of its competitors due to low costs;
- a market niche strategy based on product differentiation, which aims to provide a narrow segment of consumers with products that fully correspond to their tastes and preferences.

Benchmarking tools

The first stage is to decide what exactly needs to be improved in the organization, choose the criteria by which you will evaluate the “exemplary” enterprise, as well as the point of view from which the successes of others (director or buyer) will be assessed.
The second stage is a search, for example, for successful and unclassified companies.
The third stage is the collection of information (databases, publications in the press, reports on the activities of the enterprise, conferences and seminars, fairs, exhibitions, entrepreneurs' unions, marketing and training organizations, as well as business acquaintances).
The fourth stage is the analysis of the collected information. It is important not only to find out the similarities and differences in the work of the native enterprise and the “sample”, but also to identify the reasons for the lag and highlight useful experience.
The fifth stage is the implementation of successful solutions adapted to the business, but in no case should you blindly copy the general model and concept, track the dynamics of changes and evaluate the work done.

Benchmarking in the CIS countries is difficult, first of all, because domestic business cannot be called transparent.

Reporting on the activities of the organization, the number of employees, sales and supply volumes are usually carefully protected from prying ears and eyes. Based on the above, an official proposal to exchange such information can even cause aggression. It is better to conduct such negotiations in an informal setting.

Participation in a regional or industry benchmarking club is often used as an external approach. A group of companies, usually from the same region or industry, agree to work together to exchange information. This approach requires that participants have the same understanding of the company's benchmarking tools and the purpose of its implementation. It is common to agree on rules and a code of conduct regarding issues such as the scope of the project, the degree of "openness" and confidentiality.

For example, studying financial performance, customer satisfaction, waste levels, working with suppliers and operating results. Enterprise visits ("intra-industry") - visiting other organizations - is a popular form of benchmarking. In general, it is easier to understand how others perform their processes through observation and hands-on demonstration. Often these visits take place informally and are organized through personal contacts. A more formal approach can be used to study a wide range of companies in many sectors.

Benchmarking in management

Managers of public sector organizations, as well as government officials in many countries around the world, have begun to use benchmarking as a tool for assessing the work performed in order to apply the best management practices of other successful organizations.

National and local governments in many countries around the world are looking for ways to reduce costs, increase management efficiency, increase the return on budget funds spent, and improve the quality of services provided to citizens. However, in order to do this, it is necessary to painstakingly and carefully study existing experience and adopt the techniques and management methods of the most successfully operating organizations in both the public and private sectors.

Let's consider the extent to which benchmarking can be used to stimulate competition in public administration.

There are certain arguments for this:

1. Thanks to benchmarking, the production of government agencies is oriented towards the preferences of citizens. With its help, the services provided and performance indicators of various territorial administrations (cities, settlements, communes, etc.) are compared. This kind of analysis makes it possible to fill in the gaps in the list of services that are provided in a given location, or, conversely, to critically consider the need to use resources for the product of the administration’s activities that is available in a given location, and the possibility of its production on market principles. For a more correct assessment of the result, the analytical comparison function within the framework of benchmarking should be accompanied by identifying the preferences of citizens through surveys.
2. Benchmarking also contributes to the optimization of resource allocation by identifying inefficiencies in the production of standard administration products and provides directions for increasing efficiency. It also acts as a tool for assessing investment directions, since the analysis determines what resources are still needed to produce certain significant services. In this regard, it also contributes to the growth of innovation, primarily from the point of view of improving the organizational side of activities, and their dissemination in executive authorities.
3. The results of the analysis within the framework of benchmarking also provide information for improving the remuneration system for civil servants.
4. Through the continuous process of learning and improvement induced by benchmarking, the flexibility and adaptability of government organizations to changes in the environment and the needs of citizens increases.

The above considerations indicate that benchmarking is a successful management technology that is advisable to use in domestic practice. Its application can be very successful, especially since there is significant practical experience in using methods of social competition in the public sphere in the recent past.

In the future, benchmarking can serve as a starting point for identifying areas of public administration that need to be improved first and, therefore, stimulate innovation.

The success of a benchmarking project lies in the strict adherence and responsible execution of each of its stages. The reference matching algorithm is not strictly regulated.

Planning phase, consisting of three stages. During planning, you need to determine what to compare. What parameters and characteristics of the company (enterprise) and competitors should become the object of comparative analysis. Next, competing companies are identified.

And finally, the methods of collecting information and the process of its accumulation are selected:

1. Analytical phase (analysis phase), which includes two stages. During the analytical phase, differences in the characteristics of products, services and, accordingly, competitors are determined. Next, the levels of future performance that will allow you to get ahead of competitors are designed.
2. Integration phase, which also consists of two stages. During this phase, the results of the comparison are discussed and acceptable approaches are developed to stay ahead of competitors in the compared areas of activity. On this basis, specific goals should be formulated for all functional divisions of the company (enterprise).
3. Action (implementation) phase, consisting of three stages (steps). During the period of organizing the implementation of the set goals, a specific action plan is developed, implemented, and its implementation is monitored. Based on the monitoring results, the necessary adjustments should be made to the planned action plans to achieve specific competitive advantages. The result of all this work should be the achievement of a leading position for the company and strengthening of its financial position.

The proposed approach to benchmarking, which includes 10 stages, will allow the enterprise being surveyed to: rely on the experience of other organizations; take into account modern experience rather than outdated ideas; significantly reduce costs from repeated work and duplication; improve understanding of what is being done and how effectively activities are carried out; organize more efficient management; set realistic goals; identify necessary changes; increase employee responsibility.

Further development of benchmarking will contribute to the openness of business and increase its efficiency, which is so necessary for the Kazakh economy today. Mastering this method of managing and improving business will allow domestic enterprises and companies not only large, but also small and medium-sized ones to keep up with the times and take their rightful place in the world market in the near future.

Quality benchmarking

The level of functioning, or rather, the survival of an economic entity, depends on the way in which the issues of synthesis of the above fundamental elements, as well as constant monitoring of fluctuations occurring in commodity markets, and timely updating of the line of their goods, will be resolved. There are many reasons leading to the bankruptcy of enterprises and the collapse of various undertakings and projects.

The main reasons for unsuccessful projects include:

1) insufficient degree of market study (research);
2) revaluation of market volume;
3) unsuccessful R&D results;
4) unsuccessful pricing;
5) low quality of the product;
6) insufficient advertising;
7) incorrect positioning of the new product on the market;
8) incorrect assessment of the costs of implementing the project;
9) insufficient assessment of the degree of competition.

Due to these reasons, enterprises face various difficulties: on the one hand, it is necessary to conduct fundamental and applied research and development of new products, products, goods, etc., and on the other hand, the likelihood of a successful result is low.

In order to achieve the expected successful result, the company must seriously analyze and control every stage of newly designed products.

The main of these stages are:

1) generation of ideas. The design and development process should begin with a thorough analysis of the intended markets for the enterprise's products, as well as consideration of currently available proposals on this problem. An important distinctive feature of benchmarking is the strict requirement to carry out this process constantly and by all personnel of the enterprise, regardless of their position. In this case, all available sources of information should be used, including the Internet, industry and other newsletters, foreign media (“Wirtschafs Woche”, “Economist”, “Frankfurter Allgemeine Zeitung”, “Spiegel”, “Top Agrar”, etc.) . To resolve issues with translations of foreign economic literature, as well as to work with business partners from near and far abroad, it is advisable to have a translator(s) on staff, which, in fact, is now happening in many joint ventures in Moscow, St. St. Petersburg, Saratov, Samara, etc. Based on the received, processed and analyzed information, enterprise managers must decide on the choice of products to be developed and manufactured, which markets should be kept in mind, and based on this form short-, medium- and long-term plans .

In this case, it is necessary to clearly imagine the perspective, which boils down to:

A) obtaining maximum profit;
b) achieving a specific sales volume (market share);
c) winning the favor of clients;
d) sales growth.

The main components of benchmarking when collecting ideas about a product and its characteristics, especially the quality of the manufactured and sold product, are:

A) clientele;
b) competitors' products.

The purpose of benchmarking for the selection and analysis of existing innovative proposals is to optimize them with subsequent effective implementation. The goal of subsequent stages is to optimize performance. First, in the process of project implementation, it is necessary to collect and select ideas that deserve the attention of the management and marketers of the enterprise. The main task of this stage is to maximize the identification and elimination of unnecessary ideas regarding the development and production of goods.

The essential point at this stage is a thorough, unbiased analysis of the selected ideas.

2) development of a new product concept and its testing. After selection, the accepted ideas must undergo conceptual development taking into account the real possibility of not only production, but also the sale of manufactured goods in various markets. It must be emphasized that the idea of ​​a product is understood as the possibility of producing and offering the material value necessary for the market, satisfying the needs of the maximum number of consumers. This leads to problems that require urgent and optimal solutions. In the process of solving the mentioned problems, the entire team of the enterprise, regardless of their position, needs to work through the accepted proposals - from organizing the effective production of a new or improved product to its profitable sale.

As a result of this, although difficult, but very necessary work, the management of the enterprise (management of different levels of management) should receive answers to the following questions:

1) clarity of the concept;
2) availability of advantages;
3) reliability of information;
4) the degree of satisfaction of needs;
5) intention to buy;
6) subjects of purchase and use;
7) suggestions for improvement;
8) estimated price.

The main components of the success of an enterprise in a dynamically developing market are the continuous improvement of the quality of manufactured and sold products through a carefully thought-out system of incentives and punishments; updating the product line (products) and production technology. Newly created products, taking into account proposals developed and accepted for implementation and subsequent scientific and technical developments, must ensure concrete success in certain markets. A very important and strong feature of benchmarking at an enterprise is the strict implementation of the strict principle of urgent implementation of the results of research and development work at not only applied, but also fundamental levels, which in turn implies a close relationship between scientific research and their industrial development. An approximate range of work currently being carried out to create and develop new products is given below.

Of great importance in optimizing the functioning of the system for creating and developing a new product with a predetermined quality are rationally developed technology and organization of production of goods, the main elements of which can be:

1) technical level of the product;
2) terms of creation and development;
3) the highest possible level of quality of the product (goods, product);
4) increase in production volumes;
5) increase in product range;
6) the minimum level of costs in preparation for production and in the production process itself;
7) expected reduction in costs when operating the product.

In order to solve these problems, benchmarking specialists should carry out a certain set of works.

Among the many factors that contribute to successful business, the relevance of introducing a created new product (product, product) to the market is of great importance. It is the timeliness in meeting the needs of customers for a particular product that is the most important element of the financial and economic strategy of each enterprise operating in the market. Available historical experience has proven that delays in bringing products (products, goods) to the market, regardless of the reasons that caused these delays, make the efforts and costs of their production and sale unnecessary, i.e. lead to loss of resources, significant losses, failure to fulfill their obligations to shareholders, the state, and sometimes, unfortunately, to bankruptcy. It is clear that the process of developing, testing and setting up mass production of goods is a rather complex and responsible process, including many stages and steps carried out by various structural divisions of the enterprise. It must be worked out taking into account the time factor, for which it is recommended to use calculation and visual aids. One type of such benefit is a schedule. The production preparation schedule is a critical component of the business planning process. This schedule should also take into account the necessary stages of work, high quality, short production time and launch of products on the market, as well as possible deviations from the parameters adopted in business plans and undesirable consequences and sanctions for the occurrence of these deviations.

The main tasks and methods of reducing the time required for the creation and development of new products, as well as improving their quality in every possible way, regulated by the R&D schedule, are given below:

1) development of technical specifications;
2) development of a technical proposal;
3) preliminary design;
4) working draft;
5) review and approval of product quality standards;
6) production of a prototype;
7) bench tests;
8) full tests;
9) test marketing;
10) analysis of test results and marketing research;
11) adjustment of the manufactured product (product);
12) launch into series.

To carry out the above steps, it is desirable to use linear graphs. Currently, this planning and controlling toolkit has been adopted by many medium and large enterprises.

However, it has some serious disadvantages:

1) does not show the relationship between individual works, which makes it difficult to assess the significance of each work for achieving intermediate and final goals;
2) does not reflect the dynamism of developments;
3) does not allow periodic adjustments to the schedule due to changes in work deadlines;
4) does not provide clear points of combination and interface of adjacent stages;
5) does not allow the use of a mathematically based calculation of the implementation of the planned set of works;
6) does not make it possible to optimize the use of available resources and the timing of development as a whole.

Planning and managing a set of works to comprehensively improve the technical and commercial characteristics of a product (especially its quality) is a complex and, as a rule, contradictory task. Analysis and assessment of various characteristics of the functioning of production, financial and social systems can be carried out using various methods. Currently, SPU (network planning and management method) has good reviews. The main planning document in this system is a network diagram, which is an information and analytical model, where, with varying degrees of reliability, interdependencies, relationships, as well as the results of work that are of great importance for the implementation of the goals are reflected. Visually, this model is a network diagram consisting of arrows and circles, depicting individual works and events.

The sequence of the process of managing and monitoring the progress of product development includes the following operations:

1) compiling a list of all actions and intermediate results (events) when performing a set of works and their graphical reflection;
2) estimating the time it takes to complete each job, and then calculating the network schedule to determine the time frame for achieving the goal;
3) optimization of the calculated deadlines and necessary costs;
4) operational management of the progress of work through periodic monitoring and analysis of information received on the completion of tasks and the development of corrective decisions.

From a manager’s point of view, work is any processes (actions) leading to the achievement of certain results (events).

The concept of “work” can have the following meanings:

1) actual work – work that requires time and resources;
2) waiting - a process that requires only time (drying, aging, relaxation, etc.);
3) effective work, or dependence, is an image of the logical connection between works.

An event in the network model can have the following meanings:

1) initial – the beginning of a set of works;
2) final – achieving the final goal of the set of works;
3) intermediate (or simply event) – the result of one or more works included in it;
4) boundary - an event that is common to two or more primary or private networks.

Let us briefly consider the main elements of the SPU.

An essential element of the SPU is the path, i.e. the sequence of certain works in the network, in which the end of one sequence coincides with the beginning of the next.

The most important parameters of the network model are:

1) critical path;
2) event time reserves;
3) travel and work time reserves.

The critical path is the longest path of the network diagram. In the process of business planning of work on the production and sale of products, the specified critical path provides the opportunity to determine the deadline for the end of the cycle of work (events).

Event slack is a deferred period of time characterized by the occurrence of a particular event without tangible consequences of failure to complete a technological block of work.

The latest of the permissible deadlines is the deadline for the occurrence of an event, exceeding which will cause the same delay in the occurrence of the last event.

The earliest possible date for the occurrence of an event is the period for performing work preceding this event.

The total travel time reserve shows how much the total duration of all work can be increased.

Free work time reserve is the maximum time by which you can increase the duration of work or delay its start.

It must be emphasized that the initially developed network model is usually not the best in terms of completion time and resource use. A carefully conducted critical analysis allows us to assess the feasibility of the structure of this model, determine the degree of complexity of each work, and the load on the production equipment of the work performers at all stages of their implementation.

Benchmarking project

How to implement the appropriate strategy to become the best of the best?

What must be changed or maintained in the enterprise to become the best?

Why is your own business not the best?

However, most experts are of the opinion that benchmarking means borrowing management methods from others who are successfully operating, by comparing with other areas of business activity or competitors and identifying the weaknesses of one’s enterprise.

At ICI fibers (fiber production), benchmarking is considered as comparison-based training, which has two levels - strategic and the level of individual processes.

In Japan, where benchmarking has been practiced for a long time, the most common form is product benchmarking, which is based on the “me too” mentality. Less popular is benchmarking of functions and processes.

When determining the effect that benchmarking can provide, it should be borne in mind that no one has ever questioned the fact of the benefits of sharing experience and studying it. However, we should not forget that “cross-pollination” is not fruitful for every enterprise. Therefore, the need for benchmarking must be proven. Benchmarking becomes the art of discovering what others do better than us and learning, improving and applying their ways of doing things.

Thus, the benefit of benchmarking is that production and marketing functions become more manageable when the best methods and technologies of other, non-own enterprises or industries are researched and implemented in one’s own enterprise. This can lead to improved entrepreneurship, greater efficiency, the creation of beneficial competition, and customer satisfaction.

There are essentially two main types of benchmarking - internal and external benchmarking.

Internal benchmarking means comparison of processes within one enterprise or concern. Since in this case no comparison is made with external processes and foreign technology, the potential for innovation is very limited.

There is much more benefit from external and cross-industry benchmarking. By comparing your own processes (in your own company) with the most successful processes throughout the industry, a company stands out as having a particularly high potential for new impulses and innovations.

A benchmarking project is carried out with the aim of improving certain aspects of the business activity of an enterprise. The basis for this is the preparation of information about internal processes and the definition of a systematic method for collecting data. A well-proven approach is to compile questionnaires with relevant key performance indicators (KPIs). KPIs are indicators for determining the volume of business activity. Having compiled such a questionnaire, you can begin to purposefully identify enterprises suitable for the survey and send them appropriate requests for the benchmarking project.

The experience of long-term use of benchmarking shows that direct comparison of an enterprise with its direct competitor is almost impossible. In particular, enterprises with identical or similar production methods or business processes are more suitable for this purpose. The primary analysis of advantages and disadvantages is carried out, as a rule, on the basis of a comparison of quantitative indicators entered in the questionnaire.

At the next stage, a qualitative comparison of business activity processes is made. For this purpose, appropriate seminars are held, and business activity processes are compared and analyzed on site, during mutual visits to enterprises. Through the sharing of experiences, innovative resources are identified and a definition of specific successful practices as best practices is developed. The identified positive components can then be quickly adapted to the relevant conditions and implemented purposefully in the home enterprise.

An example of cross-industry benchmarking: a comparison of a computer manufacturer with the promise of a trade organization. The starting point for the benchmarking project was a computer manufacturer's difficulties with its picking and delivery processes. In this regard, high costs and unsatisfactory punctuality of deliveries (timeliness), amounting to only 70%, were noted. After compiling a description of the production processes and a questionnaire, requests were sent to various enterprises. We were able to attract a large mail order organization for household goods to participate in the project as a suitable partner company. The company was famous for its efficient order fulfillment and punctuality of deliveries. The lessons learned from this project were enormous. The computer manufacturer was able to optimize its order fulfillment business within just 6 months. As a result, cost savings amounted to 10%, and on-time delivery of goods reached 95%.

In search of best practices, industrial enterprises focused on innovation activities face a number of problems, namely:

Development of a continuous process of self-improvement based on the constant collection and analysis of information about the competitor;
in improving indicators for comparing previous experience with the standards and achievements of leading enterprises;
studying the processes and methods used by competitors to resolve problems, i.e. developing a system for benchmarking best practices.

Enterprises implementing it associate the prospects for using benchmarking with adopting best work practices, developing the creative potential and motivation of employees, as well as more quickly overcoming staff resistance to innovation.

The introduction of benchmarking makes it possible to improve planning, management and production at an enterprise and increase its competitiveness.

Types of benchmarking

Internal benchmarking - with this type of benchmarking, processes (products, services) are compared within the organization. Close or similar processes (products, services) are selected as objects. In internal benchmarking, it is fairly easy to collect data, but the scope for comparison is limited and the results may be biased.

Competitive benchmarking - comparison is made with direct competitors (in terms of products or services provided) operating in the local, regional or international market. For this type of benchmarking, it is necessary to select competitors located at a different “level” of the market. For example, an organization operating in a local market may choose to compare an organization operating in an international market. In this case, the data obtained from the comparison will be more valid and important, but it is quite difficult to obtain.

Functional benchmarking – the processes of one’s own organization are compared with similar processes of another organization, but operating in a different field of activity. With this type of benchmarking, objective and meaningful data can be obtained with less effort by using ethical and legal methods of obtaining information.

Generalized benchmarking – for this type of benchmarking, organizations are selected that have the best processes and approaches in their segment. Such organizations openly publish information about their activities (examples include publications on the Toyota Production System, or Motorola's 6-Sigma system). Of these processes and approaches, the most appropriate ones are selected for study and comparison. After which they adapt to the conditions of their own organization.

Various sources are used as sources of information to select a “standard” for benchmarking. For example, publications on commercial activities, databases of consulting and auditing companies on organizations applying best practices (for example, GMP), lists of quality award winners, etc.

To improve activities, one or more types of benchmarking are used. The objects of benchmarking and the focus of research may be different, but the main stages for all types of benchmarking will be the same. This sequence of actions has developed as a result of the practice of using benchmarking by many organizations.

The main stages of benchmarking include:

1. Definition, analysis and detailing of the benchmarking object. The object can be the organization's processes, services or products. At this stage, it is important to understand how much resources and effort the organization is willing to spend on the benchmarking process - whether this will be a one-time event or whether benchmarking will become an ongoing practice of the organization.
2. Identification and definition of characteristics for which benchmarking will be carried out. These may be important consumer properties of a product or service, or process quality parameters.
3. Formation of a benchmarking team. It is better to include specialists from various departments of the organization in the team so that there is an opportunity to more broadly and objectively assess the capabilities of both their processes (products, services) and the processes (products, services) of benchmarking partners.
4. Selection of benchmarking partners. Leading organizations that have achieved success in implementing the characteristics of interest (identified at stage 2) can act as partners. A partner can be one organization or several. If internal benchmarking is performed, then such partners will be related departments, processes or products provided by the organization itself.
5. Collection and analysis of information necessary for comparison. To make a comparison, it may be necessary to present the information obtained in the same form as it is presented within the organization. For example, if the technical characteristics of a product are compared, then the set of these characteristics may differ from one manufacturer to another. The characteristics will need to be brought to a single “base”.
6. Conducting an assessment of the organization’s ability to achieve the required characteristics in comparison with the benchmarking partner (or partners). The assessment can be carried out using various methods that allow one to assess the existing “gap” between the work of one’s own organization and the work of a benchmarking partner (for example, using GAP analysis).
7. Identification of possible changes to existing work practices. A “vision” of the future state of the organization is created. This vision should be based on the results of adapting the benchmarking partner's processes to the conditions of its organization.
8. Development of strategic goals and plans for their implementation to achieve the desired level of performance. Depending on the scale of the changes, plans may affect changes in processes, management systems, organizational systems, work culture, and other aspects.
9. Implementation of planned changes and constant monitoring of the progress of changes in the organization. If necessary, adjustments to plans are made.
10. After achieving the established goals and implementing plans, a decision is made to repeat the cycle and implement all stages of benchmarking for new conditions.

Before using benchmarking as a tool for improving performance, an organization must decide how much resources it can allocate to it. It is better to conduct benchmarking using well-established methods. Benchmarking techniques can save significant time and resources. If a decision is made to use benchmarking as one of the tools for continuous improvement, then it can be separated into a separate process.

Benchmarking business processes

As a rule, to formalize the structure of a business process, it is necessary to carry out its initial description, for example, in the ARIS tool system, and only then proceed to their further comparison. At the same time, in addition to best practices, it is possible to collect existing problems of a business process, which allows you to create a set of urgent measures for the operational optimization of a business process.

Another subject area that can be analyzed in a business process benchmarking project is operational risks, since their management is a necessary condition for organizing a high-quality business process. In addition to the above, when benchmarking a business process, it is important to analyze its environment - performers, documents, information systems, technological resources, etc. In practice, when organizing a project, you need to take into account that the more information on the process is collected, the better the comparison will be, while it is most interesting to look not so much at the regulations and descriptions of business processes, but at their indicators and results.

By recording all the differences found in the previously created structure of business processes, you can solve several problems at once: collect information for benchmarking business processes; ensure typification of business processes and replication of best practices; carry out diagnostics and prompt adjustment of the business process. If we consider a typical benchmarking project, it has the following structure: selection of a benchmarking object, collection of information, analysis of information and adaptation, improvement of business processes. One of the main stages of this project is the selection of a benchmarking object.

To do this, you need to complete the following steps:

Determining benchmarking goals - at this stage, the main goals of the project are formed. For example, ensuring the dissemination of best practices within the company, typifying business processes, or improving a certain business process.
Defining benchmarking objects - at this stage, objects for comparison are determined. As a rule, such objects include indicators, business processes, personnel, knowledge, etc.
Determination of benchmarking tools - depending on the goals and objects of benchmarking, the necessary tools are determined. In practice, when conducting internal benchmarking, a survey is most often used with subsequent clarification of information.
Selection of companies for benchmarking - at the selection stage, those companies or divisions that will be suppliers of information for benchmarking are determined.
Identification of information sources - at this stage, a list of information sources is formed and consolidated. In practice, sources of information for conducting a business process benchmarking project can be internal regulations, management reporting, descriptions of business processes, etc.
Determining the structure of business processes to capture differences - at this stage, the structure necessary to accumulate the differences found in the analyzed business processes is formed, which is done through a description of the existing business process.
Determining forms for collecting materials - within this stage, various methods of collecting information are determined, and questionnaires and reporting forms are generated. In most cases, everything is limited to studying documentation, questioning and interviewing.

The next key stage of a business process benchmarking project is the information collection stage:

Preliminary survey – the point of this stage is to send out preliminary questionnaires to collect information. In this case, the questionnaires must contain the structure of the business process that is selected as the benchmarking object.
Clarification of the data obtained - work to clarify the data obtained during the survey is carried out during a series of interviews, and it is at this stage that the basic information on the organization of business processes is recorded.
Identification and recording of strong deviations - this stage is the main one from the point of view of benchmarking, since by identifying and recording strong deviations, it is possible to find those differences that make a significant difference in the efficiency of the business process.
Determination of “best practice” - at this stage, from all the differences found in the organization of business processes, it is necessary to determine what will become the “best practice” for further implementation.

Once the best practices in business processes have been identified, we can talk about moving to the next stage of the benchmarking project - information analysis and adaptation:

Determining ways to achieve “best practice” - at this stage, the possibility of transferring “best practice” to other business processes is analyzed, because it is not enough to find “best practice”; you also need to understand how to replicate it.
Determining areas for improving business processes - these works allow us to determine the changes that must happen to the business process in order for the best practices found to work.
Determining the method and extent of application of selected best practices at the enterprise - in fact, at this stage, the design of a business process “as it should be” for a specific organization occurs. Those. a new process is created that contains all the best that was found within the framework of the benchmarking project.

However, it is not enough to create a new business process, you need to implement it into your activities, which happens at the next stage of the project - improving business processes:

Development of a plan for improving business processes - at this stage, planning is carried out for the transition from the existing business process “as is” to a new vision of the business process - “as it should be”.
Improving business processes (implementing changes) – change management technology is used to introduce changes to existing processes. Each required change is recorded, the person responsible for its implementation is determined, after which the implementation of the changes and their success are monitored.
Evaluation and analysis of the effectiveness of improvement is the final stage of the project, which determines how much the implemented “best practices” have made the business process more perfect. To do this, an analysis of actual indicators is carried out, and based on the results of the analysis, a decision is formed on the success of the business process benchmarking project.

Application of benchmarking

Benchmarking or reference comparison - a term that has already become quite firmly entrenched in the Russian economic lexicon - is a management method (tool) that can help many Russian companies in solving the problem of improving management systems and increasing competitiveness.

The name of the method comes from the English words “bench” (level, height) and “mark” (mark). This phrase is interpreted in different ways: “reference mark”, “height mark”, “reference comparison”, etc.

Benchmarking is a continuous search for new ideas and subsequent use in practice. The essence of benchmarking lies, firstly, in comparing one's performance with that of competitors and the best organizations. Secondly, in studying and applying the successful experience of others in your organization.

Having evolved from industrial espionage and competitive analysis, benchmarking became an effective management tool in the late 1970s and has become one of the most popular management methods in recent years.

Benchmarking, like most other management tools, is a product of big business, for big business. Large companies, in search of competitive advantages, are focusing their efforts on developing new management methods. These studies are global in nature, and the most successful solutions become separate areas in management, a theoretical methodological basis is provided for them, and they occupy their own separate place in the arsenal of business solutions. There are enough examples of this: 6-Sigma (Motorola), Taguchi and Just-in-Time methods (Toyota), Poke-yoka (Matsushita), and again Benchmarking (Xerox).

In this situation, a manager in any of the millions of small and medium-sized enterprises (SMEs) around the world is entitled to ask the question: “do these methods apply to my business?” Can smaller companies really benefit from new management approaches? Often cited examples of benchmarking describe the experience of large corporations such as Xerox, Toyota, Ford, Yamaha, etc. It is fair to assume that the approaches of large companies will not be acceptable for small and medium-sized businesses. Indeed, improving business quality through the introduction of modern management methods - total quality management, a balanced scorecard, the Hoshin Kanri company plan deployment system and others, is accompanied for small businesses by the question of the applicability of solutions used by large firms. Although, it should be emphasized that “...small firms are no less interested in building and developing quality systems than large companies, with the only difference being that standard and widespread approaches do not always work in small businesses.”

Small and medium enterprises play an important role in the economy of any country. Russia is no exception in this sense, and support for small businesses today is being elevated to the rank of state policy. Despite this, most management theories still take root first in large companies. How justified is the secondary role left to small businesses in the development of modern management systems? Should small companies learn from the examples of large ones, or is research needed to reveal the potential of small businesses as a source of new trends in management? In our opinion, the possibility of developing your own approaches, including for reference comparison, exists. Benchmarking, in particular, with certain reservations, can be considered as a product of small and medium-sized companies, which arose from the need to learn from large firms and elevated to the rank of a management method. The tradition of transposing the experience of large companies into their own management systems was noticed among small organizations in Japan long before the recognition of benchmarking as an official management tool.

It is obvious that the analysis of benchmarking opportunities for small and medium-sized businesses should be carried out through the prism of the characteristics of enterprises representing this market sector.

The success of benchmarking depends to a large extent on defining what will be compared. Small businesses always have a lot of problems, and managers have a desire to improve everything at once. The effect of this approach is usually zero. Next, we will consider the indicators that small companies practicing benchmarking use as an object of measurement and comparison.

Research by E. Monkhouse has revealed a trend towards the use of benchmark comparisons of financial indicators in the field of small and medium-sized businesses.

A study of small companies by experts at the University of Sheffield six years later showed that both strategic and process benchmarking had found their way into small and medium-sized businesses. The numbers of this study are reflected in the table.

Indicators used for benchmarking in SMEs:

The data presented in the table is not surprising - small firms mainly use for comparison indicators that reflect problems that lie “on the surface” and have established approaches to measurement, such as financial condition and quality. More flexible and less tangible indicators, such as team morale or organizational stress levels, are used less frequently because it is difficult to determine the final target of comparison and normalize the information.

In our view, the use of easily measurable indicators by small companies when conducting benchmarking is dictated by the dynamic competitive environment in which small and medium-sized enterprises find themselves. Therefore, the objects for benchmark comparison most often are indicators that correlate with key factors of success in competition. Research data from the University of Sheffield shows the main areas on which small and medium-sized companies compete (table).

Competitive comparison indicators (key success factors) for SMEs:

These studies confirm the predominant role of standard indicators for benchmarking in SMEs. Focusing on less tangible metrics is a matter of timing and developing a culture of improvement. Today, small companies, especially in Russia, do not have balanced systems for collecting, evaluating, implementing and analyzing successful business solutions for measuring and benchmarking indicators that do not have strict determination methods.

How often do small companies actually use benchmarking? Coopers and Lybrand's research covers 1,000 companies, of which 67 percent claim to use some form of benchmarking. According to research from the University of Sheffield, 63 percent of European SMEs are involved in benchmarking, while 37 percent of respondents have never used such a method. According to the managers of these companies, benchmarking is a waste of time and resources, in the words of one of the managers, “...benchmarking was invented by consultants for consultants.” The position of the majority of Russian entrepreneurs today can be expressed in these same words.

However, paradoxically, small companies have much greater potential for competitive benchmarking than is commonly thought. Theoretically, they always have before their eyes a lot of examples (landmarks) to which they should strive. In practice, the methods that leading companies use are either unavailable or unknown. In addition, a number of factors or barriers prevent the use of benchmarking in small companies.

Apart from the standard reasons for not benchmarking: “lack of time and money”, some barriers for SMEs appear significant, especially compared to larger companies.

Firstly, small companies, due to limited resources, do not seek to attract outside specialists and use the services of consulting firms when there is a replacement in the form of various manuals and books on successful business solutions.

Secondly, fewer and fewer specialists from large companies with knowledge and experience in applying modern management methods are moving to work in small firms.

Third, membership in any of the recent benchmarking “clubs” is quite expensive for small companies. Thus, membership in the European Foundation for Quality Management for a small company will cost from 1,350 euros per year.

Fourth, small business managers are, by definition, much closer to their customers, employees, and competitors than their corporate counterparts. Their attention is often split between strategic and operational information. An advantage here is the ability to constantly “keep abreast” of daily performance indicators, from which managers in large companies are relatively removed. On the other hand, this situation for managers of small companies does not always allow them to have an objective view of the organization’s activities in strategic terms. However, here we can cite research data from E. Monkhouse, who notes that about 75 percent of managers of small companies clearly understand the strategic prospects of their business, and 65 percent see the prospects of their competitors.

Fifth, to achieve the desired effect of benchmarking, the indicators measured must be flexible enough to reflect the various characteristics of small businesses.

Most of the barriers to benchmarking noted above are non-financial. There may be an opinion that these barriers are indirect and relate to management problems.

In Russia, it has developed that not everyone is ready to give information about their enterprise. In addition, existing systems of taxation and financial accounting of a company do not always allow obtaining real data on certain indicators.

However, the main, and at the moment, the only reason for not using the potential of benchmarking as an effective management tool in small and medium-sized enterprises is a poor understanding or ignorance of the benchmarking method.

In Russia, managers of small and medium-sized businesses, entering into informal relationships with partners or competitors, often use each other’s best achievements in their companies. Experience shows that direct communication with colleagues provides the most valuable ideas and knowledge for business, which, as a rule, leads to the introduction of new forms of management, software products, and the use of new technologies in production.

In addition, the potential for development and the key to the company’s success lies in the interest of managers. It is not without reason that leadership is one of the basic principles of the philosophy of modern entrepreneurship, playing a key role in building total quality management systems, in ISO 9000 standards, in improvement models based on quality awards and in almost all modern management methods. The important role of the leader in small companies is emphasized by the closer relationship between managers and employees than in large companies. This can be an advantage for SMEs, since it greatly simplifies the task of managers to convey to staff what benchmarking is, why and how it is necessary to perform benchmarking.

Benchmarking, as a new and large-scale management initiative, should be initiated directly by the manager. However, most of them have a misconception about benchmarking: whether it is used to compare companies' products and services or numbers, or to understand processes. However, there is also an understanding that benchmarking allows small means to implement radical changes based on comparison with other companies: competitors or leaders. Support from leaders is critical to commit time, resources, interest, remove barriers, and reward efforts.

Finally, it is important for management and benchmarking teams to remember that a formal benchmarking study typically takes about six months to complete. There is no shortcut. "The biggest challenge is finding the time to do the research. If you need quick change, choose another way," says Martin Leeper, director of quality at Sciences Corp., a small American company.

Thus, we can draw the following conclusions regarding the features of the use of benchmarking as a management tool in small and medium-sized enterprises:

1. Benchmarking in developed countries is used by more than half of small and medium-sized businesses. An even larger number of organizations consider benchmarking to be an effective tool for increasing competitiveness and improving management systems.
2. The potential of benchmarking in SMEs can be effectively realized by taking advantage of the advantages of small companies: proximity to the consumer, a stronger leadership role and organizational flexibility.
3. The “secrecy complex” still remains the main barrier for small and medium-sized companies when conducting benchmarking, in addition to the traditional “limited resources” barrier. In this regard, comparative benchmarking of financial indicators or simple competitive analysis is more popular among small business managers.
4. The choice of financial indicators as an object of comparison is dictated by the intense competitive environment in the small and medium sectors of the market. Another feature of small companies is that, unlike large businesses, a closer connection with the consumer determines the choice as objects of benchmarking of indicators that reflect the key factors of the organization’s success: customer satisfaction and the price of the product/service. Analysis methods

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(source: http://benchmarkingclub.ru/ - Gregory H. Watson. Benchmarking in examples)

Internal benchmarking at Hewlett-Packard

At one time, Hewlett-Packard Corporation was losing to its direct competitors from Japan. The latter managed to produce new products much faster and with no less quality. In order to maintain competitiveness, it was decided to conduct a benchmarking study of R&D in the company's branches and divisions and identify the most effective ways to speed up production. The criterion by which the performance efficiency of different divisions of the corporation was compared was the payback period of the project ( breakeventime, or BET). Quality Function Deployment (QFD) technology was actively used to keep projects focused on meeting real market requirements. As a result of the research carried out in Hewlett-Packard The ground was prepared for the introduction of the Six Sigma methodology. The approach chosen by the corporation to improve production processes included documenting the process, measuring its characteristics and reducing variations in their values, identifying ways to continuously improve the process in question. It is easy to see that in this sequence the same logic can be traced as in the cycle DMAIC(Define - Measure - Analyze - Improve - Manage).

Competitive benchmarking at Ford

Before benchmarking, the corporation Ford was significantly inferior to its competitors in terms of design parameters and functional properties of its products. It lost a large share of the market, which it could only regain by creating a new, innovative family of passenger cars. The bet was placed on Taurus. To ensure that the new car was no worse than its competitors and even superior to them, benchmarking research was carried out during its development. First, we found out which properties of existing cars on the market are most attractive to consumers. Then, for each of these properties, the best-in-class cars were determined, the level of which Taurus had to be achieved and surpassed. The study covered the entire global automotive industry starting from BMW and ending OpelSenator. They were never considered direct rivals FordTaurus, however, they had properties that were attractive to consumers. More than 50 car models were analyzed for approximately 400 design parameters. The company laid the foundations for introducing the principles of developing new products using the cycle DMADV(Define - Measure - Analyze - Develop - Verify) aimed at ensuring six-sigma level of quality. As a result, the new car Ford was named car of the year and became the undisputed sales leader. In subsequent years, design flaws revealed in the transmission Taurus, greatly damaged the car's reputation and led to a series of modifications, each of which deviated more and more from the original concept. By the end of the 1990s, sales volumes Taurus fell from 400 to 60 thousand, and in August 2006 the last batch of cars of this family will be released. Ford I learned the main lesson for myself: competitive benchmarking cannot be a one-time event. To ensure that results remain relevant, they must be updated and adjusted regularly. This approach harmonizes well with the system of views adopted in the Six Sigma methodology, where the search for sources of variation and the resulting knowledge provide not just an instant snapshot of the level of competitiveness of an enterprise, but allow us to trace the entire history of its changes. Enterprise managers have the opportunity to take into account all the consequences of decisions made, and not just short-term effects associated with changing models of manufactured products.

Functional benchmarking at General Motors

From 1982 to 1984, General Motors conducted a benchmarking study aimed at finding alternative ways to manage quality and reliability. At the time, most managers accepted W. Edwards Deming's challenge: "If Japan can do it, why can't we?" NBC. They began to care about quality, recognizing it as the main distinguishing feature of competitive products. Participants in the study conducted General Motors, such well-known companies as Hewlett-Packard, 3M, JohnDeer. When starting benchmarking, General Motors formulated 10 hypotheses about the factors that most influence quality. Their legitimacy had to be confirmed by data on the work of partner companies in conducting benchmarking.

As a result of the study General Motors It was possible to give an objective comprehensive assessment of the quality management systems that existed in the companies participating in the benchmarking. This made it possible to understand to what extent the overall performance of enterprises depends on quality management. The discovery of the link between quality and enterprise performance foreshadowed two major developments in quality management in the 1980s: the Malcolm Baldrige National Quality Award and the ISO 9000 series of standards, which established general requirements for quality management systems. Research report conducted General Motors and partners, was published in September 1984, while similar research results justifying the criteria of the Baldrige model and the requirements of ISO 9000 standards did not become publicly available until late 1998. This advance in knowledge provided the study participants with GeneralMotors certain advantages over competitors. They were able to improve their own quality management systems so that consumers' perceptions of the quality of their products were higher than those of competitors' products.

So, again, characteristic of many benchmarking studies, there is a lack of targeted, systematic study of the operating conditions of the organization and its main production processes, the main means for self-improvement of the company. General Motors satisfied its immediate needs in determining the basic parameters of the QMS and did not conduct a repeat study. Moreover, the company shifted its focus to meeting the requirements of the industry standard QS 9000, which is an automotive-specific version of the ISO 9000 standards, competing for the Malcolm Baldrige Award, and mastering the Six Sigma methodology. But as experience shows, the process of improving the quality management system should be evolutionary.

General benchmarking at Xerox

Xerox's benchmarking of its logistics system against those of other, more successful businesses is a well-known example of benchmarking. Xerox's experience confirmed Deming's observation that quality improvement is often the result of a company going through a crisis that forces its leaders to focus on making the necessary changes. In the late 1970s, the company faced a number of serious problems. At that time, Xerox began to gradually be forced out of the copier market by its Japanese competitors. The return on assets, which was 22% in 1974, dropped to 4% by 1984. To overcome the crisis, it was decided to conduct benchmarking, which will allow us to find more competitive methods of managing the company.

FujiXerox, a subsidiary of Xerox operating in the Japanese market, was very helpful in conducting the research. Xerox compared its processes and costs, its subsidiary's internal costs and practices, and its competitors' processes and costs. Using market price information for copiers as a basis for comparison, Xerox was able to estimate the cost of its competitors' operations and identify areas where they performed better financially. The study allowed Xerox to estimate the size of its gap from its competitors, but did not help to eliminate it. By drawing on the experience of the world's leading companies, by 1987 Xerox had caught up with its competitors in areas where it had previously had obvious shortcomings. However, the benchmarking carried out at Xerox did not become the magic wand that would help the company avoid major problems. In the early 1990s, there was a transition from analog to digital technologies. During the same period of time, a radical organizational restructuring of the company was carried out, accompanied by the abandonment of the cumbersome functional structure and the transition to a simplified scheme. At the same time, the previous focus on improving production processes and gaining a leading position through improving product quality and benchmarking has been weakened. Xerox's experience proves that benchmarking should be viewed only as a tool for improving companies, and not as a panacea that allows you to solve all problems by simply copying the best practices of competitors to improve your own efficiency.

· Questions and tasks:

1. What is the purpose of benchmarking?

2. What are the pros and cons of this method? Why is its use not always effective?

3. Which companies need to use this analysis method?

4. Do small companies need benchmarking?

5. Is it always necessary to look for the best companies as a reference point in benchmarking?

Reading time: 15 minutes

Our country is actively developing business and mastering new management tools. This allows you to improve the quality of business processes, make them more perfect, and make enterprises more competitive. One such tool is benchmarking.

From this article you will learn:

1. Types of benchmarking
2. The principles on which it is carried out
3. 4 stages of implementation
4. Examples of benchmarking from world practice
5. How benchmarking is used in Russia

What is company benchmarking and what is it used for?

Benchmarking

a continuous process of evaluating the level of products, services and practices based on comparison with the strongest competitors or leading companies.

Through the use of benchmarking, businesses become more efficient and open. This tool allows you to find answers to questions that arise in the course of doing business and has the following advantages:

1. Its use makes it possible to overcome stagnation in leadership and allows you to point out to managers that they have an incorrect understanding of the state of affairs.
2. Benchmarking motivates complacent and complacent businessmen to strive for better.
3. It helps to identify both the strengths of the organization and the weaknesses that need to be strengthened.
4. Carrying it out is an opportunity to warn the company in advance about the backlog.
5. Benchmarking sets challenging but achievable goals.
6. Helps determine which actions to improve performance are prioritized.
7. Allows you to identify and incorporate the best management processes and practices used in business.
8. Reveals how the company compares to the best in the world.
9. Determines how far the firm's level of functioning lags behind that of competing organizations.
10. Provides the organization with proven corrective action plans.
11. Allows you to combine the strategy and efforts of the enterprise to improve it.
12. Discovers new technologies and ways to manage a company.
13. Focuses on the main factors of the company's success.
14. Allows for large-scale events aimed at improving operations.
15. Helps to learn from the experience of partners and competitors. No company has enough time and resources to learn from its mistakes.
16. Creates a culture of continuous improvement.
17. Allows you to reduce costs for ongoing improvements.
18. Allows approaches to be implemented more quickly and with less risk.
19. Helps improve key financial indicators.

Depending on the area of ​​application, benchmarking is classified into:

• Benchmarking the level of customer service.
• Benchmarking of information technologies.
• Benchmarking of product characteristics.
• Product quality benchmarking.
• Benchmarking employee development and training.
• Benchmarking of business process management.
• Benchmarking customer service telephone service.
• Benchmarking performance assessment.
• Benchmarking of production.
• Cost benchmarking.
• Image benchmarking.
• Benchmarking of personnel management and employee selection, etc.

The history of benchmarking

Benchmarking began to be systematically applied in practice in the 1980s. The pioneer company in the use of this tool is Xerox.

She was faced with a foreign organization that competed with her and had higher productivity in most respects. Xerox management decided to find out what the secret of the competitor's advantage was, in order to reach its level or even get ahead of it. The task was divided into several components, which made it possible to answer the questions:

1. Which company's products, services and business processes can be considered the best?
2. What allowed this company to achieve such results?

After Xerox, other organizations began to resort to the use of benchmarking, the scope of its application was expanded, and the methodology was refined. The range of problems being studied has become much wider, that is, the search for advanced methods of doing business began to be carried out not only in competing companies, but also in other organizations, both in their industry and in those adjacent to it.

Recently, improvements have been made mainly in the search for answers to the second of the identified benchmarking questions. But observing and describing the practices of leading organizations is not enough. Separately, a rather difficult component of the task is the implementation of these methods in your enterprise.

Benchmarking was also affected by management trends in the 1980s. This period was marked by the development of the concept of integrated quality management (Total Quality Management, TQM). The popularity of this concept was very high in the next 10 years.

Benchmarking is based on principles that fully comply with the Total Quality Management concept. According to some experts, benchmarking is a tool without which it is impossible to implement TQM.

Be that as it may, the basis of both the concept of integrated quality management and benchmarking is the desire for high quality of the company’s business processes, the products it produces, and the services provided.

TQM and benchmarking are components of a corporate culture of continuous improvement, involvement of personnel in the organization’s business processes and customer focus.

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Why is benchmarking so popular today? Jason Grason Jr., head of the International Benchmarking Clearinghouse, cites the following reasons:

1. Global competition

As business globalizes, companies are realizing that learning and then incorporating the best of their partners and competitors is essential if they are to survive.

1. Reward for Quality

Recently, campaigns are increasingly being carried out at the state level, during which enterprises that lead in quality indicators are identified and rewarded. To take part in such a program, a company must not only prepare a presentation of the competitive advantages of its products. The arsenal of tools for managing an organization must include benchmarking.

1. The need for widespread adaptation and use of world achievements in the field of production and business technologies

Any organization, regardless of size and field of activity, needs to constantly study and implement best practices in the field of production processes and business technologies. This will allow you to keep up with your competitors.

Types of company benchmarking

You need to know the difference between process benchmarking and outcome benchmarking. Performance benchmarking simply compares indicators. In reality, benchmarking is intended to gain insight into the processes behind the results; establish why performance differs; borrow ideas that have been successfully implemented in practice.

Classifying benchmarking activities is not easy because many companies that practice them ignore the recommended templates.

Internal benchmarking

Used to compare various indicators of one organization. For example, a chain of retail outlets can compare traffic to its stores. The approach has a number of advantages: data is not difficult to obtain, and there are no problems associated with access to information. But there are also disadvantages: internal benchmarking does not involve searching, studying and implementing the best achievements of competitors.

Competitive benchmarking

This tool involves comparing results and business processes in different organizations. Conducting competitive benchmarking is not a problem for companies that can obtain information about the activities of competing organizations from the reports and reviews they publish that are publicly available. If access to such information is closed, then benchmarking is possible only if competitors are willing to share information.

Competitive benchmarking is practiced in the entertainment industry. Organizations in this sector provide each other with safety data, because if an accident occurs at one park attraction, it will serve as a negative publicity for everyone else.

Functional benchmarking

It is based on a comparison of results and processes in one business function carried out in different sectors of the economy. The ability to compare is determined by the nature of the processes, and not the areas in which the activities of the organizations of interest are connected.

An example of such benchmarking is a comparison of administrative functions (for example, working with personnel). Comparing a certain function of your enterprise with a similar one in companies in other industries is less problematic, since in this case there is no competition and the exchange of information is more likely.

Functional benchmarking allows you to think innovatively about problems because it can help you learn how to solve them in other industries.

General benchmarking

Involves the study of innovative solutions developed in other companies, which is not associated with a specific function or sector.

For example, in Britain, the postal service used a chemical company as a model for safety compliance. The health and safety environments of these organizations differ significantly, but the Postal Service learned a lot from examining specific processes.

Principles by which company benchmarking is carried out

No. 1. Reciprocity

Conducting benchmarking involves the need to interact, come to agreement, and exchange data in order to benefit each of its participants. But reciprocity cannot be achieved if you act blindly. First, you will need to outline the boundaries of the range of information, agree on the procedure for exchanging information, and the logic of the research.

Each partner must be sure that the behavior of other benchmarking participants will not go beyond the agreed limits. If the rules are followed by everyone, the result of the study will be brilliant. All conditions must be agreed upon in advance.

No. 2. Analogy

Similarity of operational processes of participating companies is necessary. Any process can be evaluated, the main thing is that the results can be applied by researchers in the context of their organization. The success of benchmarking is guaranteed if there are similar processes and the selection of partners in accordance with certain criteria.

No. 3. Measurement

Benchmarking compares parameters defined for several organizations to find out why they are different and how to achieve better values. It is most important to determine the basic parameters of the process, then it becomes possible to improve them after the process has been studied.

No. 4. Credibility

Benchmarking should be based on factual data, accurate analysis and study of processes, and not just intuition.

Benchmarking a company: 4 stages of implementation

Stage No. 1. Preparation

1. First you need to select an object for competitive benchmarking. It is necessary to study how significant and relevant the selected object is, with the help of which the tasks and main functions of the enterprise are performed. In this process, the most difficult stages are identified, bottlenecks and the most interesting areas are looked for.
2. In the second stage, threshold values ​​are established to determine the assessment of success. Subsequently, when considering the selected objects, some of the most significant aspects of the activity will be taken into account using financial units. These aspects can be: costs, time, quality level, etc.
3. To make the analysis results more accurate and comprehensive, it is necessary to use additional sources of information, such as: fairs, seminars, reports, business plans, target audience surveys, supplier surveys, exchange processes, inspection of production facilities, reference information, chambers of commerce and industry, media, literary sources.
4. At this stage, you need to look for organizations for comparative analysis. The search should be carried out not only in your market sector. By studying businesses in other industries, you can learn about the most decisive and innovative methods of work that will be suitable for you. And if you are not a competitor to the selected company, then the likelihood that it will provide you with the data necessary for analysis and comparison is higher.

Stage No. 2. Analysis

1. Identification of processes, services, goods and technologies with the least efficiency and identification of the reasons why they are ineffective, based on the quantities and factors of the enterprise’s operation selected at the previous stage.
2. Selecting areas that will improve the efficiency of business processes and technologies. Here you will need to find out what is the reason for the advantages of enterprises competing with you.

Stage No. 3. Implementation

This stage involves determining the goals of the planned changes and developing a strategy for their implementation.

1. Expected results are discussed in detail. At the same time, it is necessary to realize the need for changes and establish specific goals for the enterprise, taking into account the requirements of new standards and introduced forms of activity.
2. A detailed action plan is drawn up, the costs of the reorganization are calculated, the employees responsible for the implementation of innovations are determined, a schedule of changes is developed, and a forecast of the results of the planned improvements is made.
3. All developed changes are implemented in practice in accordance with the developed plan and schedule.

During the implementation of the project, it is necessary to monitor all changes so that you can assess how effective the innovations are. In addition, it should be checked whether the work is being carried out strictly according to plan and whether the established deadlines are being met.

Stage No. 4. Repetition

The development of market methods and processes with high efficiency occurs very intensively, they are constantly changing and quickly move from the status of innovative to the category of standard. In this regard, at the fourth stage it is recommended to involve a constant process of improving the activities of the enterprise. Work in this direction can be simplified by documenting in detail the experience of benchmarking research.

Companies that conducted benchmarking: examples from global practice

Competitive benchmarking at Ford

The design parameters and functional properties of Ford Corporation products were significantly inferior to analogues produced by its competing enterprises, until it began to practice benchmark comparison. Returning the lost market share was possible only if a new, advanced family of passenger cars was created. The bet was made on Taurus.

In order for the model under development to be better than that of its competitors, it was necessary to conduct benchmarking. First of all, we identified the most attractive properties of the machines on the market for customers. Afterwards, the best cars in the class under study were determined for each of these properties. The Taurus was meant to reach their level and even surpass it.

The scope of the study was broad. Cars from all world manufacturers were studied. Although they did not directly compete with the Ford Taurus, they were attractive to consumers due to the presence of certain properties. More than 50 models were analyzed for 400 design parameters.

The company laid the foundations to implement the principles of developing new vehicles using the DMADV (Define - Measure - Analyze - Develop - Verify) cycle.

As a result, the Ford car was recognized as the car of the year and came out on top in terms of sales.

Subsequently, design flaws were identified in the Taurus transmission, and the car's reputation suffered greatly. The model was modified several times, deviating more and more from the original concept. At the end of the 1990s. Taurus sales decreased from 400 to 60 thousand. The last batch of cars of this model was released in August 2006. The Taurus story showed Ford that competitive benchmarking needs to be done more than once.

Functional benchmarking at General Motors

By General Motors from 1982 to 1984. A benchmarking study was carried out to find alternative methods for managing quality and safety. In those years, many managers accepted the challenge of W. Edwards Deming: “If Japan can do it, why can’t we?”, which he threw out in one television program (NBC channel).

More attention has been paid to quality as the main distinguishing feature of highly competitive products. Such well-known companies as Hewlett-Packard, 3M, John Deer were involved in benchmarking. When starting the study, General Motors formulated 10 hypotheses about the factors that have the greatest impact on quality. Confirmation of their legitimacy was required by data on the activities of organizations that were partners in the study.

Benchmarking allowed General Motors to objectively and comprehensively evaluate the quality management systems of the organizations that took part in the study. Company employees found out the dependence of the overall efficiency of the company on quality management.

The publication of a report on research conducted by General Motors and its partners took place in September 1984, while similar data that made it possible to develop the criteria for the Ballbridge model and the ISO 9000 series of regulatory documents became publicly available at the end of 1998.

Thanks to this advance in knowledge, the benchmarking participants, led by General Motors, received some competitive advantages. The quality management systems of these enterprises have been improved, which has made it possible to achieve a higher opinion of consumers about the level of quality of their products compared to the products of other companies.

It is worth noting that General Motors did not systematically and purposefully study the operating conditions of the enterprise and the main business processes, although the results of such studies are the basis for the organization’s self-improvement. Conducting benchmarking made it possible to determine the main parameters of the quality management system, and they did not repeat it. This approach is typical for most benchmarking studies.

In addition, General Motors focused its efforts on complying with the requirements of the industry standard QS 9000 (a regulatory document developed on the basis of ISO 900 standards, taking into account the characteristics of the automotive industry), participating in competitions for the Malcolm Ballbridge Award, and mastering the Six Sigma methodology. However, experience shows that improving the quality management system should be evolutionary in nature.

GIA Group Benchmarking Circle

Global Intelligence Alliance (GIA) is a group of companies specializing in consulting. They research the market and help establish and operate market research processes.

As part of its activities, the GIA group organizes benchmarking circles, the purpose of which is to bring together market research managers, discuss and exchange best practices that are associated with various aspects of the management of these studies.

The group has conducted more than 40 benchmarking seminars since 1999. Market research specialists from 30 organizations have participated in these projects. A typical project is to hold 2-4 thematic meetings to discuss issues identified by project participants, with the support of a consultant from the GIA group.

The benefits companies derive from such meetings are clear:

• They get best-in-class training and case studies without breaking the bank;
• adopt the experience of other organizations;
• exchange ideas with specialists who have extensive experience in other sectors of the economy;
• learn from the mistakes of other enterprises, which allows them to avoid unnecessary expenses in their activities.

Meetings on a variety of topics form the basis of the GIA benchmarking process. They are carried out by all participants in turn. The duration of the meetings is 6-8 hours. Their themes are not repeated.

The main topics of the meetings are:

• integration of market research and strategic planning;
• integration of market research and marketing activities, sales;
• development of a network for collecting market information within the company;
• competitive counterintelligence;
• development of market research reports;
• drawing up scenario plans and organizing educational games.

Nokia Social Media and Benchmarking

The purpose of Nokia's benchmarking studies is to support and set new development goals in various areas (logistics, research and development, employee relations). Benchmarking is an integral component of company development projects and training programs.

The company practices different types of research (joint and competitive benchmarking), participates in benchmarking groups, projects on selected topics and in relation to certain organizations. Nokia specialists also conduct broader benchmarking studies. Sharing data on benchmarking results can also be part of academic research projects involving several industrial companies.

New research opportunities opened up as social media channels began to be used not only within the company, but also outside it. Social media helps to strengthen interaction during joint activities. These interactive spaces allow knowledge to be shared during the planning and preparatory phases, as well as during analysis and implementation of improvements.

External resources such as LinkedIn, Twitter and Facebook have become widely used in benchmarking research. In each of these social networks, professional groups have been created in which you can discuss in detail topics that are interesting to each participant.

Through social media and collaboration platforms, it is now possible to draw from additional trusted sources, interact with other organizations, and learn from their experiences to support benchmarking (especially in the area of ​​open source software projects and related communities developers).

Nokia has repeatedly experimented with using social media to explore new ways to share information and discuss technological advancements. IBM was involved as a partner in these experiments.

Areas of particular interest include: methods for working on open source software projects, using 3D virtual spaces to work professionally in a global context, software development and open source innovation.

Dynamic and direct sources of information, interaction and exchange of information include blogs and wikis maintained by professionals, discussion forums, for example, YouTube and Slideshare. The use of social networks is possible at any stage of benchmarking. Internal blogs and wikis also help prepare, conduct research and share results.

How benchmarking is used in Russia: examples of companies

In our country, benchmarking is not as widespread as in the United States of America and Japan. For example, such research is regulated and supported by the state abroad; there are special organizations that help find benchmarking partners. In Russia there is no such practice.

The only Russian event held every year that can be considered to support the development of benchmarking is the “Government Quality Award”. This award allows companies to improve various aspects of their activities and become the object of benchmark comparison when conducting research by other enterprises. In addition, award winners have a good image; consumers perceive them as reliable manufacturers of high-quality products. It is easier for such companies to find partners.

Table 1 contains examples of various benchmarking studies conducted by domestic manufacturers

Table 1- Examples of different types of benchmarking carried out by domestic companies

The table shows that Russian enterprises prefer to conduct competitive benchmarking. For example, specialists from the Irbit Motorcycle Plant (IMZ) are studying the experience of Western companies in the following areas:

• production structure of the enterprise: the goal was to identify which divisions of the company should be left; after the European experience was studied, the managers decided to sell the foundry, forge and several other shops, which freed up funds that were used to maintain unnecessary equipment;
• operational efficiency: the Indian company Royal Enfield, which produces motorcycles, was taken as the standard; During the study, experts found that the staff of the reference organization is similar to IMZ, but in Royal Enfield there are 25 units of goods produced for each employee, in IMZ - 1.7 motorcycles. The following decision was made: reduce equipment downtime, train employees in additional professions, and send them to advanced training courses.

Other areas of the enterprise’s activity can be selected as objects of competitive benchmarking, for example:

• production indicators: specialists from Severstal OJSC (a metallurgical plant with a full production cycle) studied the experience of a number of Russian enterprises and 56 Western metallurgical companies; analysis of benchmarking results made it possible to identify areas requiring changes. It was decided to reduce costs, develop the market, introduce new technologies;
• product quality: managers of the plant named after. Stepan Razin was contacted by the Baltika company with a request to conduct a comparative analysis of the quality of the drinks produced; benchmarking showed the need to purchase new equipment for beer fermentation; after its launch, the quality of the products became higher;
• reporting indicators: telecom operator Peter-Star CJSC conducts a comparative analysis of reporting indicators in a certain format with a similar company Golden Telecom. Comparison of individual performance indicators is carried out with data from the Svyazinvest organization.

Functional benchmarking is carried out by the Nizhpharm enterprise. The Wimm Ball Dann company was chosen as the standard of comparison; the object of comparison was the display of products in pharmacies.

The results of the study showed that Wimm Bill Dann products are always given the best places on shelves. After analyzing the activities of the standard, the Nizhpharm organization changed its approaches to merchandising. It turned out that the most advantageous place to place medicines in pharmacies is the shelves to the right of the cash register window.

Another type of benchmarking is internal. It is used when you need to analyze processes or personnel work in one company. An example of such a study is internal benchmarking of banking organizations, as well as the main clinical hospital No. 1 of the city of Novosibirsk.

In the second case, the quality of medical care provided by each of the hospital departments was studied. Based on the results of the study, the top three were selected. Their experience became an example for other departments that tried to apply it.

Although benchmarking is used by a number of Russian enterprises, it has not yet become widespread in our country. To carry it out successfully, you need to take into account the specifics of domestic companies. The full and successful use of benchmarking in Russia is hampered by the following reasons:

1. The ethical culture of enterprises is inferior due to underdevelopment.
2. There is no practice of conducting benchmarking research in Russia.
3. National accounting has certain features.
4. Management accounting procedures are underutilized.
5. Companies do not trust their chosen benchmarks and benchmarking partners.

Typical company benchmarking mistakes

• Learning does not mean using

Researching the activities of an enterprise operating in your industry does not mean gaining useful experience. It is not enough to obtain specific data that interests you; you need to organize a benchmarking process to understand what is behind it.

• Blind adherence to standards

For example, the study showed that the cost of a certain transaction at a reference company was $1. You don't have to strive for this number at all. It may well turn out that you cannot apply the chosen standard either to your clients, or to the market, or to resources. You need to select a standard of comparison whose situation is similar to yours.

• Consumer interests are forgotten

It happens that some enterprises, studying the experience of successful companies and directing all efforts to reduce the cost of operations, bringing them closer to the “standard” ones, completely forget about consumers. If you cut costs, the service will most likely deteriorate, and as a result, customers will be lost and the business will decline. The approach to resolving any issues must be balanced.

• Complicating the task

What indicators do you study as part of benchmarking? A process is a collection of tasks, and a system is a collection of processes. Studying and evaluating the entire system is impossible; it is a long and expensive process. Select one or more processes from the system and study in detail. After that, start exploring the next part.

• Strange direction

Don't dwell on topics that don't align with your strategy and goals or that conflict with other company initiatives. There should be monitoring of benchmarking projects by strategists to ensure they are not irrelevant.

• "Slippery" concepts

If you choose a topic that is very difficult to work on, you will waste a lot of effort. One such topic is corporate communications. If you want your research to benefit you and your company, then select from this area of ​​activity the main goals for implementation that can be strictly assessed (for example, distributing internal memos throughout the enterprise).

• Uncertain basis

The essence of this mistake is studying the experience of other companies without first analyzing your own activities. Conducting benchmarking presupposes the need to have data on the performance of your company. This information may be provided by the organization to research partners in exchange for information of interest to it.

• Ill-thought questions

There is benchmarking etiquette, and its basic rule is: do not ask your partner questions the answers to which can easily be found in the literature.

• Spy passions

Partners need to know what data you need, how you will process it, who will have access to it, and what the purposes for using it are. The ideal option is for the participants in the benchmarking study to enter into a formal agreement among themselves, which stipulates these issues.

Turning to professionals will help you avoid mistakes when benchmarking using social media.

Business in Russia continues to develop and master new management tools that make it possible to improve the quality of business processes and increase the competitiveness of organizations in the market. Benchmarking is one such tool.

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Modern large enterprises already consider this analysis as an important strategy tool for their actions aimed at development, and small and medium-sized businesses are often not even familiar with the concept of benchmarking and the meaning of this term. But such ignorance does not mean that this tool is useless, but quite the contrary, benchmarking can be used to increase the competitiveness of some small businesses.

There are many different definitions of this concept, and in order to most fully understand what it contains, you should familiarize yourself with several of them.

The name benchmarking itself comes from two English words: branch (height) and mark (mark).

There are the following definitions of this concept:

1. Benchmarking- the process of comparing a company's performance with the world's best organizations existing in the same market segment in order to make appropriate changes and maintain their success.
2. Benchmarking– comparative analysis methodology for the purpose of applying the obtained data in practice to improve the efficiency and quality of the company’s activities.
3. Benchmarking- the process of carefully reviewing the business processes of organizations and their productivity, with the aim of comparing their activities with the activities of leading companies and corporations in their industry, in order to use the obtained data to approach and even overtake the best-in-class enterprises.
4. Benchmarking– search for the best practical methods for the enterprise, leading to increased productivity and development.
5. Benchmarking– a development standard during which similar business processes must be analyzed and measured.

The phrase “benchmarking” can mean:

1. Be literate and wise enough to recognize that there is always a competitor who is superior in some respect.
2. Have enough wisdom to not only recognize, but also adopt knowledge and skills from a direct competitor in order to catch up with him, and then get around him.

It is benchmarking that today makes it possible to improve the activities of organizations quite quickly and at minimal cost. By understanding how industry-leading enterprises operate, you can achieve the same heights, and perhaps even surpass your direct competitors. By carefully studying the achievements and mistakes of others, an entrepreneur can formulate his own strategy of action, which will be most effective specifically for his enterprise.

There is an unspoken rule in benchmarking: “If one entrepreneur has an idea and succeeds, then there is a high probability of success for another entrepreneur who applied the same strategy in the same industry.”

Historical correction

The use of this business tool began in the 80s of the 19th century. Many recognize Xerox as the pioneer or discoverer of this technique, due to the fact that it, faced with more successful foreign competitors, copied their strategy and managed to surpass them in the market.

To implement their plans, company representatives were faced with the task of answering two questions in sequence:

1. Which company is the leader?
2. How did this company operate to achieve success?

These questions are the basis of benchmarking today and still remain relevant.

Following Xerox, there were many others who chose to use this method or similar ones, thereby expanding the scope of benchmarking and refining the power of this tool.

The expansion of this business tool has led to the fact that the search for companies for analysis is no longer limited to the consideration of direct competitors, but also includes other companies in the same field of activity or even in a different one. Recently, analysis has increasingly come down to searching for answers only to the second question.

Analysis, search and identification of successful strategies of competitors is not all. A rather difficult task of a different kind is the introduction of such a course of action in a particular organization.

Main types

The following types of benchmarking are distinguished:

1. Interior. Analysis of a specific process carried out within the organization itself, which allows the compilation of indicators of processes that are similar or analogous.
2. Competitive. It is the process of comparing the main characteristics of an organization and comparing these parameters with the parameters of competitive organizations in order to study specific products, expected capabilities and methods of administering work.
3. Functional. Analysis and comparison of certain indicators of companies (two or more) with the same business data of an enterprise that is the best and operates in identical conditions.
4. General. It is a comparison of the main indicators of production and sales of the company with the main indicators common to a large number of competitors performing similar business activities. This type of benchmarking allows you to identify the main investment areas.

Phases

The competitive analysis process itself can consist of 4 main phases, each of which includes certain steps.

Phase #1 – Preparation

1. The first step is to decide on the object of the competitive analysis process. The value and level of relevance of an object intended to perform the tasks and main functions of the organization is measured and studied. This process identifies areas of significant difficulty, probes for bottlenecks, and identifies areas of particular interest.
2. Threshold values ​​are set in order to derive a success rating. The selected objects will be further considered depending on some of the most important aspects of the activity using financial units. Such aspects may include: costs, time, quality level, etc.
3. To carry out the most accurate and comprehensive analysis, additional information resources are involved, such as: fairs, seminars, reports, business plans, target audience surveys, supplier surveys, exchange processes, inspection of production facilities, reference data, chambers of commerce and industry, media information, literature, etc.
4. Search for key companies for comparative analysis. The selection of such organizations should be carried out not only within their market area. Other sectors of activity can offer the most decisive and innovative methods, also suitable for enterprises engaged in completely different activities. A company that is not a direct competitor will be much more willing to provide more complete information for more detailed comparison and analysis.

Phase #2 – Analysis

1. Based on the values ​​and factors of the organization’s work selected at the first stage, the most ineffective processes, services, products and technologies, the performance of one’s own enterprise and the reasons for such inefficiency are determined.
2. Directions are being chosen that make it possible to more effectively organize these processes and technologies. We will have to find an answer to the question of why competing enterprises are better in this area.

Phase No. 3 – Implementation

1. At this stage, it is necessary to determine the goals of the proposed changes and strategies for their implementation. There is a detailed discussion of the expected results, full awareness of the need for change, and the exact goals of the organization’s work are established, taking into account the introduction of new standards and forms of activity.
2. A detailed action plan is being drawn up, calculation of resources spent on such a reorganization, persons responsible for changes at each level are announced, a reorganization calendar is developed and the results of such activities are predicted.
3. All developed changes are implemented according to the drawn up plan and calendar.
4. At each stage of change, transformation is monitored, which is designed to compare the effectiveness of such innovations. Compliance with the planned restructuring plan and compliance with the planned deadlines is also carried out.

Phase No. 4 Repetition

Effective market methods and processes are constantly evolving and subject to significant change, and what was the most innovative methodology yesterday is quickly becoming the standard. That is why the fourth stage should include a continuous process of improving the organization’s performance. Well, in order to make work in this direction as simple as possible, you should use documentation of benchmarking experience in as much detail as possible.

Examples of successful benchmarking

Ford

A good example of the use of such analysis is the history of the Ford company. Its experts carried out benchmarking in the 90s, when the company’s position in the market was seriously shaken. During this analysis, studies were carried out on car models, the number of which exceeded 50.

These studies were conducted to clarify the advantages and, accordingly, disadvantages of each. Based on this analysis, the parameters of the best car were identified, which would allow it to achieve the performance of competing companies and even surpass them.

The result of this company was the Taurus car, which became the car of the year. Subsequently, the model lost its position due to the fact that improvements began to be made that deviated it from the original development concept, based on the analysis of competitive models.

Nokia

This company has long been recognized as an international organization engaged in the creation of mobile devices and services. Nokia uses benchmarking to maintain its market position and develop by monitoring time and progress in all areas of its activities (logistics, research, development, partner relations, team).

GIA

This company is a consulting firm that engages in market research, identifying profitable strategies and providing various types of services that allow companies to establish business processes. GIA constantly produces various seminars on benchmarking. A typical project for this company includes 2 thematic seminars where various business and analysis issues can be discussed.

Each seminar can be devoted to the following topics:

1. Economic improvements based on examples.
2. Training in profitable business management based on the experience of competitors.
3. Exchange of basic strategies and ideas between competent specialists from various areas of business activity.
4. Training based on mistakes made by other companies as an opportunity to avoid incorrect and unnecessary financial expenses in your own work.

What is compared in the benchmarking process?

Competitive analysis is not a highly specialized analysis that is limited to products or core business processes. Based on past experience of similar studies, it can be said that the campaigns showed incredible originality and ingenuity in the selection of the main factors considered in the benchmarking process.

But with all this, one should not get carried away and forget that the essence of the analysis is to identify the reasons for the effectiveness of competitors. If the analysis begins with a general collection of information, then it should end with clarification of the work methodology. The result of the work should be a so-called implementation tool, which is a factor leading the company to high efficiency in the required area.

Benchmarking– a reliable method that allows you to improve your business activities by studying the experience of other companies existing on the world market and in a specific area. This analysis becomes a powerful tool that increases the efficiency of companies and allows them to introduce advanced work methods leading to development and profit.

“Competitive benchmarking and collaborative benchmarking are excellent methods for improving business processes and increasing efficiency.”

“Social media such as LinkedIn, Facebook and Twitter influence business processes around the world. They are particularly useful for developing new ways of collaborative benchmarking.”

Short review

Benchmarking is the process of comparing one's performance with the best companies in the market and industry and then implementing changes to achieve and maintain competitiveness. Benchmarking can be collaborative or competitive. Various forms of social media are beginning to impact many business processes. In this sense, benchmarking is no exception.

Our expert report examines the essence of benchmarking and explains its main concepts and implementation process. Various benchmarking methods are presented and the goals and benefits of each are explained. Social media has been shown to fundamentally change the way benchmarking is conducted. They increase the efficiency of benchmarking and facilitate its implementation. Social media is transforming the benchmarking process from project-oriented to continuous.

Using Nokia as an example, a practical understanding of the use of social media for benchmarking is given.

Introduction

Benchmarking began to be used as a business practice in the 1980s and was gradually adopted by companies around the world. A recent study identified benchmarking as the most popular management tool for the first time (see Rigby & Bilodeau, 2009). This practice is partly a response to the recent economic downturn, which has focused companies' attention on improving the efficiency of business processes and the competitiveness of products. The skillful use of benchmarking can solve both of these problems.

Over the years, as companies have developed their own benchmarking methods and business analysts have published its theoretical basis, the understanding of what constitutes benchmarking and how best to conduct it has undergone certain changes. In general terms, benchmarking is a systematic method of identifying the highest standards of products, services and processes by comparing such products, services and processes in different companies. Moreover, the most important part of benchmarking is the use of the information obtained as a guide to action or, in other words, to implement changes and improvements in order to achieve those highest standards, which are usually called best practice.

Today, social media is changing the way benchmarking is done. They provide companies with new communication tools. This reduces the need to travel for field work, as much of this work can now be done online. As a result, benchmarking becomes less expensive. This, in turn, allows companies to lower the threshold for benchmarking against each other and turns benchmarking from a one-time event into a continuous iterative process.

History of benchmarking

The systematic use of benchmarking in practice began in the 1980s. Xerox is often called a pioneer in this area. Faced with a foreign competitor that was superior in many ways, Xerox executives decided to explore the sources of that competitive advantage so they could copy or even surpass them. The task was divided into separate parts to find the answer to the following questions:

1. Which company is the best in terms of products, services and processes?
2. How did this company become so successful?

The challenge was simply to find the very best and learn from their experiences. Today, these two questions continue to be the basis of benchmarking.

In subsequent years, other companies began to use similar methods of work, expanded the scope of benchmarking and refined its methodology. The expansion of the range of issues being studied meant that they began to look for advanced methods of work not only among competitors, but also in other companies in their own or even in another industry. Recently, changes have mainly affected the search for answers to the second of the above basic benchmarking questions. However, observing and describing the activities and practices of the best competitors is not everything. A separate, complex problem in its own way is the implementation of changes in the organization.

Benchmarking did not remain aloof from other trends of that time in the field of management. In the 1980s, the concept of Total Quality Management (TQM) was developed and gained enormous popularity over the next decade. The principles underlying benchmarking fit perfectly with the concept of TQM, with some experts even considering benchmarking as a tool necessary for achieving TQM. In any case, it is the focus on high quality throughout the entire organization, its business processes, services and products that underlies both the concept of TQM and benchmarking. TQM and benchmarking are part of a corporate culture of continuous improvement, employee involvement and customer focus.

In general, the key ideas of benchmarking are as follows:

1. Identifying best-in-class organizations
2. Obtaining the necessary information using appropriate methods of collecting information for self-assessment
3. Work on self-improvement through the implementation of changes aimed at achieving and exceeding established standards

In this talk, we will introduce different benchmarking methods and explain the purpose and benefits of each. Finally, we will share our experience and knowledge gained over the years through numerous benchmarking projects.

What is compared in the benchmarking process

The benchmarking method is not limited to business processes or products. In fact, over the years, companies have shown great creativity in selecting the business elements considered in benchmarking.

It is important to remember that successful benchmarking requires identifying the root causes of high performance. While it is helpful to start by collecting general information about what other companies do, the ultimate goal is to discover how they operate. The term “implementation tool” in benchmarking refers to the main factors that allow a company to achieve high efficiency, for example, in the field of product production, business processes or resource use.

Products and services

One common and natural starting point is to become fully focused on the company's products and benchmark a competitor's product, service, or entire offering. Product benchmarking improves overall understanding of one's own competitive position in the market and can rely heavily on secondary research. It is more difficult for service companies to benchmark against competitors' offerings because the effectiveness of services is not as easily measured as with physical products. Therefore, successful benchmarking of services often requires a large number of interviews and field studies.

Financial indicators

Net performance benchmarking does not always address fundamental competitiveness issues. However, it helps to quantify possible achievements and set goals. In addition, financial performance benchmarking can often be done at relatively low cost using publicly available information.

Business processes

Benchmarking is often aimed at business processes due to the very structure and effectiveness of this method. Business processes are of great importance because they reflect the company's capabilities and are thus very close to the fundamental tools for realizing competitiveness. It often turns out that two companies had access to the same resources and customer base, but one of them organized its business processes more efficiently and provided higher quality at lower costs.

However, gathering information about competitors' processes is not an easy task and may require significant primary research. When conducting business process benchmarking, competitors are an obvious, but not the only, benchmark option. Often, good results can be achieved by leveraging information sources across a competitor's entire value chain, including suppliers and distributors. In addition, benchmarking results from companies in other industries can provide valuable information.

Strategies

Making effective strategic decisions requires knowledge of competitors' strategies. However, as with processes, strategy analysis can be difficult to achieve. A significant amount of information about a company's strategy can be obtained from public sources, but many aspects of the strategy are never publicly disclosed. Despite this, it is still possible to conduct successful benchmarking of strategies based on the results of primary research and analysis of a company's strategy using abductive reasoning.

Functions, groups and organizations

Benchmarking is designed to reveal not only what other companies are doing, but also how they manage to do it. Therefore, studying the structure and organization of work in a company is one of the common topics when conducting benchmarking. We can talk about any aspect of the organization of the company's work: approved functions or created groups, divisions and business units, the number of employees working in them, etc. Part of benchmarking an organization can even be the compilation of characteristics for individuals.

The use of social media, such as professional networking websites, has become a new reliable source of information for this type of benchmarking. This method allows you to reduce the cost of visiting specialists and expensive primary research, and with relatively little effort you can discover a large amount of valuable information.

Basic concepts of benchmarking

Given the wide range of applications of benchmarking, it is useful to further understand the methods of benchmarking and highlight the different types and sub-disciplines that make up benchmarking. Benchmarking is generally defined as the process of comparing one's organization with the best companies in the market or industry and then implementing changes in order to achieve and maintain competitiveness. This approach emphasizes the presence of two distinct stages in benchmarking. If at the first stage the work is aimed mainly at obtaining information, then the second is associated with the implementation of changes and is therefore no less important.

Learning from other companies is only considered genuine if it leads to improved performance. It should be noted that it is the second stage that usually underlies the decision to conduct benchmarking. Although in theory the process of gathering information and comparison precedes change management, in reality the company that begins benchmarking has already decided to change and develop a corporate culture of continuous improvement. Therefore, benchmarking is simply a manifestation of initiative to speed up business processes, improve their quality and efficiency.

Another significant aspect of benchmarking is its gradual development into a continuous process. Although benchmarking is carried out in the form of individual projects, these projects follow one another, providing the company with a continuous process of learning and self-improvement. This phenomenon has only accelerated with the advent of social media, which has significantly reduced the cost and time of conducting each benchmarking cycle.

Benchmarking Partners

The companies that an organization chooses to compare with itself are often called benchmarking partners. Organizations can compare themselves to a wide range of companies. Although a typical group of such companies are competitors, it is often equally useful to consider organizations in a different industry or other companies operating within the same value chain. The most important thing is that benchmarking partners are very effective or the most effective in their activities.

Because benchmarking against competitors involves many issues, such as sourcing, legal and ethical considerations, benchmarking is broadly divided into two distinct areas: competitive and collaborative benchmarking.

Competitive benchmarking

Competitive benchmarking involves comparing one's organization with its competitors and usually requires the undertaking of independent research or competitive intelligence and therefore analysis of relative competitive and strategic positioning. Benchmarking of competing products can also be considered competitive benchmarking. As a rule, it turns out to be less difficult, and is largely carried out on the basis of publicly available information.

Collaborative benchmarking

Additional classifications of benchmarking take into account benchmarking areas and benchmarking partners. The following generally accepted classification is often cited in the benchmarking literature (for a more detailed analysis, see, for example, Anand - Kotali, 2008).

Internal benchmarking

Involves benchmarking of its own business units and branches, which may be located in different places. Allows easy access to information, including confidential data, and also takes less time and resources than other types of benchmarking. It is one of the simplest forms of benchmarking since most companies introduce similar functions within their business units. The main task in this case is to determine the internal performance standards of the organization. This leads to the sharing of best practices throughout the company. The downside is that unless the results are subsequently used as a baseline for external benchmarking, companies using this type of benchmarking often remain overly focused on their internal business processes.

Competitive benchmarking

Competitive benchmarking is used to compare one's company with its direct competitors and compare their respective positions in the market. The goal is to compare companies that operate in the same markets and offer competing products, services, or work processes. The ease of obtaining information here can only be counted on under certain conditions. Competitors may engage in competitive counterintelligence, thereby complicating the search for data on their activities. Competitive intelligence involves using a range of methods to obtain the necessary information.

Functional benchmarking (within one industry)

General benchmarking (any industry)

General benchmarking aims to study the most efficient processes of any company. Although this type of benchmarking can be used to compare dissimilar organizations, it must identify comparable procedures and functions. This method can sometimes be difficult to implement because general benchmarking requires a broad conceptual analysis of the entire benchmarking process and a thorough understanding of procedures in other sectors of the economy.

General benchmarking is a special case because it is one of the few forms of benchmarking that is understandable and useful to best-in-class companies. A typical problem when conducting benchmarking is the asymmetry of the companies being compared. If an underperforming organization has something to learn from better performing companies, then where should the industry's best performers take their cues from? General benchmarking provides a solution to this problem by allowing companies to learn from examples in other industries and from a wider range of benchmarking partners.

Table 1. Other useful concepts

Benchmarking process

Below we provide an explanation of the traditional benchmarking process. As noted earlier, many companies today view benchmarking as an ongoing process. However, in practice, benchmarking is still usually carried out in the form of individual projects. Therefore, the following explanations reveal the workflow of the benchmarking process during the execution of one such project. In general terms, this project model can be viewed as one iteration carried out within a series of iterations.

1. Identifying an area or topic (based on strategy)
2. Selecting a benchmarking group (with a mix of proponents and skeptics, a mix of different subject matter experts, and possibly external support)
3. Identifying information already known and gaps in available knowledge
4. Selecting the type of benchmarking (joint or competitive, etc.)
5. Search and selection of benchmarking partners (companies)
6. Preparation of action plans to fill missing information (research methods, joint site visits, secondary research, competitive intelligence, etc.)
7. Search for knowledge and exchange of information with partners (focus on best practices)
8. Analysis of the results obtained and preparation of recommendations for changes
9. Management of implementation of recommendations and changes
10. Progress monitoring

Figure 1. Benchmarking process

The first four steps of the process are considered the planning phase. They are related to identifying the area of ​​study, the type of benchmarking and benchmarking partners. The analysis phase involves carrying out on-site work to find suitable companies and collect information about them. Because the process is general in nature, work at this stage can be done in either collaborative or competitive benchmarking. Before making decisions about changes or improvements, it is necessary to analyze the information received.

Although the process description presents these activities as one step, it is clear that implementing change in an organization involves a lot of work and involves many of its own processes. In the current context, it is assumed that recommendations obtained from the benchmarking process are transferred for use in the implementation or change management process. This ensures that new information is used as a guide to action.

Social media and benchmarking

Social media is beginning to increasingly penetrate existing business processes. In this sense, benchmarking is no exception. Due to its inherent characteristics, it can even be argued that social media will have a significant impact on benchmarking. Here are some of the benefits associated with it.

• Collaborative benchmarking is an inherently social activity, and social media provides many new and effective ways for social interaction.
• Social media opens the way to new additional sources of information and data collection channels.
• Benchmarking is becoming more business process oriented, and social media supports this type of ongoing engagement that is different from working on individual projects.

When considering the benchmarking process diagram presented in the previous chapter, it becomes clear that the new tools provided by social media make it possible to more effectively initiate and solve the problems that arise during this process. The time required to iterate the benchmarking process is reduced and benchmarking becomes more of a continuous activity rather than a one-time event.

Social media mainly promotes collaborative benchmarking, which relies on active communication between benchmarking partners. Social media allows partners to interact almost entirely via the Internet and eliminates the need for employees to travel on business trips for personal meetings. Considering that this has been one of the most costly and time-consuming parts of the benchmarking process, social media essentially has a significant positive impact on benchmarking performance.

There are many publicly available tools that can be used to facilitate group work as part of the benchmarking process.

• linkedIn (www.linkedin.com) is a widely used professional networking service that also provides group and collaboration tools.
• twitter (