Benchmarking Issues
You need 5 or 6 high level, commonly used, defined measures.
You need then to be able to assess where the definitions diverge a little and estimate a value of the delta of the metric.
Ideally the measures should already exist in embryonic form and the knowledge that they are being collected and reviewed ”on high” will sharpen up the definition and the accuracy of their collection, a benefit in itself.
This apparently complex KPI graph of a client, is simple in its components and all generated by Accounts which added to its internal credibility.
I would look at first from the point of view of the resources consumed by Engineering per £1m of product sales. Salaries, Area of the site (value and proportion), purchase of goods and services. Immediately with this client, you would have to bracket Salaries and outsourced labour to get a balance.
The summary given in “Management Tools & Techniques” Bain & Company is as follows:
Benchmarking involves the following steps -
Select a product, service, or process.
Identify key performance metrics.
Choose companies of internal areas to benchmark (idea here is it may have to start in one company and then be offered to others to develop each other.
Collect data, quantitative and qualitative.
Analyse the data and deviations and identify opportunities to improve.
Adapt and implement the best practices uncovered and then normal change management rules apply.
It is used to achieve -
Understand the relative cost position.
Increase the rate of organisational learning.
Improved performance
Gain strategic advantage.
I am sure that there will be 1,000s of books on the topic. The sources I would use are the Chartered Institute of Management, or the Institute of Directors.