SEMESTER 2 2014/2015

6 MAY 2015

BENCHMARKINGPENANDAARASAN

APPROACHES TO FOSTERING QUALITY PRACTICES

Benchmarking

Intended Learning Outcomes:Explain the concepts and importance of benchmarking Describe the advantages of benchmarking in HEI Describe different types of benchmarking

Read: Chapter 15 – book Total Quality Management

In HEI

• Benchmarking is an ongoing, systematic process for measuring and comparing the work processes of one organization to those of another, by bringing an external focus to internal activities, functions, or operations (Kempner 1993).

Definition

• Benchmarking is a tool for improving performance.

• Is a continuous and systematic process of comparing products, services, processes and outcomes with other organisations or exemplars, for the purpose of improving outcomes by identifying, adapting and implementing best practice approaches (Edith Cowan University, 2011).

Benchmarking vs QA Models

• Benchmarking sits within a broader framework of quality management and improvement (Wilson, Pitman, & Trahn, 2000).

• QA models focus on minimum acceptable standards and compliance and they are often imposed by management or external inspection requirements (Henderson-Smart, Winning, Gerzina, King, & Hyde, 2006)

For HEI

• The strategy of benchmarking is important both conceptually and practically

• Used for improving administrative processes as well as instructional models

The goal for HEI

• The goal of benchmarking is to provide key personnel, in charge of processes, with an external standard for measuring the quality and cost of internal activities, and to help identify where opportunities for improvement.

How Can an Institution Get Started?

• An institution should decide if benchmarking is the correct quality improvement tool for the situation.

• As a start, an institution new to benchmarking, begin with a more "grassroots" level departmental or administrative project that measures best practices internally, or with local competitors.

Benchmarking is a

• new approach of continually questioning how processes are performed, seeking out best practices, and implementing new models of operation.

Benchmarking in European Higher Education

• Activities are designed to improve the use of benchmarking in higher education.

• A powerful management tool designed to help modernise higher education management and to promote the attractiveness of European Higher Education.

Focus

• focused on governance, university-enterprise cooperation, curriculum reforms and lifelong learning.

Benefits

• One of the most important benefits of benchmarking is the discovery of innovative approaches.

• Highlights problem areas and the potential for improvement, providing an incentive to change, and assists in setting targets and formulating plans and strategies.

Various definitions

Benchmarking is the systematic study and comparison of a company’s key performance indicators with those of competitors and others considered best-in-class in a specific function (Dervitsiotis, 2000).

It is a way of comparing a product or processagainst others, with reference to specified standards (Pepper, Webster & Jenkins 2001).

An ongoing, systematic process for measuring and comparing the work processes of one organization to those of another, by bringing an external focus to internal activities, functions, or operations (Kempner 1993).

Various definitions

Benchmarking is a continuous systematic process of evaluating companies recognized as industry leaders, to determine business and work processes that represent ‘best practice’ and establish rational performance goals (definition given by Rank Xerox).

A change program, which enables the achievement of the ‘best practice’.

The continuous process of analyzing the ‘best practice’ in the world for the process goals and objectives leading to world class levels of achievement (definition of IBM).

BENCHMARKING

Benchmarking is a learning process, which requires trust, understanding, selecting and adapting good practices in order to improve.

It emphasizes that it is a practice that should be continuous, systematic and should involve evaluation and measurement with a view to achieving excellence and becoming the ‘best in class’.

It is the cornerstone of total quality management.

BENCHMARKING

A tool used to improve products, services, or management processes by analyzing the best practices of other companies to determine standards of performance and how to achieve them in order to increase customer satisfaction (Lewis & Smith, 1994).

BENCHMARKING

A benchmark – a measured ‘best-in-class’ achievement, recognized as the standard of excellence for a particular process.

Benchmarking –implies quantitative measurement, the best results become the benchmark reference against which an organization assesses its own performance.

The measurement is critical to help measures and monitor how big the gap between the current own performance with that of the best practice set as the benchmark.

Benchmarking as defined

A systematic and continuous process to identify, determine, measure, compare, learn, adopt, and implement the best practice obtained through internal and external evaluation of an organization so that performance of a higher standard can be achieved and improved.

It helps institutions to understand their strengths and weaknesses so that institutions can improve on their performance.

It helps to speed up the improvement process through best practices.

Why Benchmarking in HEI?

To answer several questions: How well is the HEI doing compared to others? How good, and in what areas, does the university we

want to be? Across the university as a whole which part of it is doing

best, and how do they do it? How can universities introduce into their own practice

what is done well in others? How does an institution improve its performance while

retaining its unique features? In the longer term, how an institution might become

better than the best in the context of its own mission?

WHY BENCHMARKING?

Improvement – benchmarking helps to improve own performance. By understanding our customers, processes, structure and culture, we are ready to learn about others’ performance and learn about their practices.

Learning to learn – we can have a basis from which to compare ourselves with others.

Adopt new technics – benchmarking allows us to adopt to techniques and best practices and makes us as good as the other organizations.

WHY BENCHMARKING?

Knowledge management tool – it is an analytical tool used to measure and compare business operations, functions or processes against best-in-class performers.

Benchmarking identifies shortcoming, inefficiencies, in the product, process system of an organization.

• University leaders would know how their institution rates in certain areas in comparison with others.

• Ascertain competitive position relative to others.

• Know how institution can be improved (Edith Cowan University, 2011)

• Prioritise resources and use the resources to best effect (McKinnon, et al., 2000).

• Benchmarking can ensure that plans are being carried out and demonstrate areas of merit to stakeholders (Wilson & Pitman, 2000).

Success factors1. Determine which areas to benchmark;

2. Identify benchmarking partners;

3. Determine types and level of benchmarking;

4. Prepare benchmarking documents and templates including the purpose, scope of project, performance indicators, performance measures and performance data;

5. Design benchmarking process;

6. Implement benchmarking process;

7. Review results;

8. Communicate results and recommendations; and

9. Implement improvement strategies.

Exercise

• Bincang wajarkah IPT di Malaysia melaksanakan penandaarasan dan kenapa?

• Kenalpasti satu IPT dan cuba sesuaikan sebuah IPT dalam atau luar negara yang boleh dijadikan rakan penandaarasan

IS BENCHMARKING APPLICABLE TO HIGHER EDUCATION? Benchmarking helps overcome resistance to change, provides a structure for external evaluation, and creates new networks of communication between schools where valuable information and experiences can be shared.

Positive process, provides objective measurements for base-lining (setting the initial values), goal-setting and improvement tracking, which can lead to dramatic innovations.

Can make it possible for the industry to improve processes in a "leapfrog" fashion by identifying and bringing home best practices.

What is best practices?

Best practices give a picture about an outstanding practices which have significantly contributed to improved performance and organizational success.

It is considered as a best practice when:•The practice contributes to excellent results and leads to superior performance.•The customers perceive it as useful to learn about it.•Involves new or innovative use of resources.•The practice is organized by a reputable individual or organization.

What is best practices?

It is considered as a best practice when:•The practice is something unique or different that others do not do.•The practice is well planned and implemented in the organization.•The practice makes the organization continually improving.•The practice is looked up by peers and experts.•The practice is acknowledged by a significant number of other organizations.

Principles for good benchmarking:

Benchmarking includes an element of comparison, which is obtained through decisions on common reference points, such as a set of common criteria against which the programs/institutions are assessed.

Benchmarking implies a strong element of learning and a commitment to improve one’s own practices. One way to do it is to establish partnerships with a view to select those that one can learn from. The learning element is important in terms of one’s commitment and motivation to the process.

Process of benchmarking

Defining and planning the project

Understanding where you are

Understanding where you can be

Identifying lessons learned

Applying the lessons learned

Defining and planning the project

Need to define the project in precise terms and develop a complete and simple project plan.

Start with a preliminary plan and build over time to the appropriate level of preciseness.

Include a way to measure the success.

Make sure include project objectives, scope, approach, timeline and budget.

Understanding where you are

Need to understand how you are doing or how you would like to be doing.

Need to know own performance so that can judge how you are doing.

Use performance measurement to organize and select benchmarking partners.

Search for secondary data, generate questionnaire, and conduct preliminary survey to search for potential partners.

Understanding where you can be

Based on preliminary studies, need to select potential partners, ascertain their willingness to participate, and develop final questionnaire.

Questions should help to focus on specifics area of what we want to learn.

Must have the right people to participate – the best combination of technical and people skills.

Proceed as schedule and conduct the information exchanges with partners that have been identified.

Identifying lessons learned

Knowing how others have done, you can use the data to understand how you can improve.

Assess where are the gaps between your performance and that of your benchmarking partners.

Use assessments made to identify best practices especially the one that your organization want to adopt.

Applying the lessons learned

The next step is to begin implementing what have been learned from the partners.

Need to ensure that all relevant staff in the organization is aware and can make use of what have been learned from the partners.

Report what have been implemented on progress and achievements made.

Methodology and implementation

Set objectives and define the scopeGain support from organizationSelect a benchmarking approachIdentify benchmarking partnersGather information (research, surveys, benchmarking visits)Distill the learningSelect ideas to implementPilotImplement (Janakiraman & Gopal, 2007)

Types of benchmarking

Competitive benchmarkingStrategic benchmarkingProcess benchmarkingProduct benchmarking (Janakiraman & Gopal, 2007)

InternalCompetitive (analyzes processes with peer institutions) Functional/industry Generic or best-in-class (find the best operations

practices available) (Alstete, 1996)

Types of benchmarking

Competitive benchmarking:Comparing and rating practices, processes, and products of an organization against the world best, best-in-class, or the competition. Comparisons are not confined to the same industry (Lewis & Smith, 1994).

Example: Xerox sent a team to Japan to study processes, products and materials against Canon.Ford Motor Company sent a group of employees to Mazda to improve account payable operations.

Types of benchmarking

Strategic benchmarking:The development of measures for a business unit which Identify strengths and weaknesses to give some external references to the strategic planning.

Aims at strategic changes and prioritized resource allocation.

Example: ICI fibres’ made extensive competitive analysis of the European market.

Types of benchmarking

Process benchmarking:Comparing internal processes between countries or companies or divisions within the same group. Can compare own processes with industry leading service provider. Focus attention on core delivery processes and look at range of products, design, source, price, distribution, display and sales.

Example: Sears Pic benchmark retail supply chain with Xerox.Florida Power and Lights benchmarked against Kansai Electric of Japan.

Types of benchmarking

Product benchmarking:Comparing on the basis of functionality, reliability and availability.Products must have a superior performance and the best against their competitors.

Example: in Japan it is common to have product benchmarking due to the ‘me too’ mentality of Japanese firms.

Types of benchmarking

Internal benchmarking:

Comparisons are made of the performance of different departments, campuses or sites within a university in order to identify best practice in the institution, without necessarily having an external standard against which to compare the results.

Types of benchmarking

Internal benchmarking:

Appropriate to universities where a high degree of devolvement exists to the constituent parts of the institution, where a multi-campus environment exists, or where extensive franchise arrangements exist whereby standard programs are taught by a number of partner colleges in different locations.

External competitive benchmarking

A comparison of performance in key areas is based upon information from institutions which are seen as competitors. Although initiatives of this kind may be potentially very valuable, and have a high level of 'face' validity amongst decision makers, the process may be fraught with difficulty and is usually mediated by neutral facilitators in order to ensure that confidentiality of data is maintained.

External collaborative benchmarking

Usually involves comparisons with a larger group of institutions who are not immediate competitors. The methodology is usually relatively open and collaborative. Such schemes may be run by the institutions themselves on a collective basis, although in other cases a central agency or consultant may administer the scheme in order to ensure continuity and sufficient momentum.

External trans-industry (best-in-class) benchmarking

Seeks to look across multiple industries in search of new and innovative practices, no matter what their source. Amongst some practitioners this is perceived to be the most desirable form of benchmarking because it can lead to major improvements in performance, and has been described by NACUBO (North American Colleges and Universities Business Officers) as "the ultimate goal of the benchmarking process".

Internal benchmarking

To compare similar operations or functions across the group.Reasons for internal benchmarking:To establish an internal baselineTo identify performance gaps To establish common practice and proceduresTo bring about effective communication processTo promote an understanding of the nature of benchmarkingTo instill confidence in undertaking external benchmarking

(Janakiraman & Gopal, 2007)

Advantages of benchmarking

Provides direction and impetus for improvementIndicates early warning of competitive disadvantagePromote competitive awarenessIdentify best practiceProvides an objective attainment standard for key areasLinks operational tactics to corporate vision and strategyExposes performance gapsTriggers major steps changes in business performanceHelps organizations redefine objectivesChallenges the status quoAllows realistic stretch goals

(Janakiraman & Gopal, 2007)

Limitations of benchmarking

Best-in-class performance is a dynamic concept which is constantly changing.Benchmarking will not improve performance overnight. It cannot replace TQM practices overnight.Benchmarking is not a panacea for all quality ills and cannot replace quality efforts of an organization

(Janakiraman & Gopal, 2007)

Different benefits of benchmarking

Information

•Quantifies performance gaps

•Promotes external awareness

•Uncovers best in class practices

Concentration

•High pay-off areas

•Focused action

Innovation

•Discovers new ways

•Challenges status quo

•Fosters quantum leaps

Motivation

•Seeing the believing

•Stimulus of external measurable basic for change

•Allows realistic stretch targets

Steps in benchmarking

Phase 1 (Planning):Identify what is to be benchmarkedIdentify comparative companies

Phase 2 (Analysis):Determine data collection method and collect dataDetermine current performance levels

Steps in benchmarking

Phase 3 (Integration):Project future performance levelsCommunicate benchmarking findings and gain acceptance

Phase 4 (Actions):Establish functional goalsDevelop action planImplement specific actions and monitor progressRecalibrate benchmarks

Practice of benchmarking

Higher Education Benchmarking In Canada And The United States Of AmericaBenchmarking In Australian Higher EducationBenchmarking In UK Higher EducationBenchmarking In European Higher Education

Practice in Malaysia – Government agencies

Pekeliling Kemajuan Pentadbiran Awam – Penandarasaan Sila dapatkan dan semak kandungan pekeliling berkenaan.