Benchmarking is the process of comparing an organization’s business processes and performance indicators to the best practices of their own or another industry. The process typically measures quality, time and cost, and the goal can be internal or external comparisons.
|Internal||Benchmarking similar processes or activities within a given organization, i.e., comparing the branches or divisions of a financial institution or the boroughs of a city.|
|External||Benchmarking processes or activities of external entities, i.e., benchmarking accounts payable processes.|
We can help you construct a cost model for your benchmarking exercise. The most important aspect of a cost benchmarking model is that it provides COMPARABLE results. In order to be effective, your benchmarking model must fulfill the following requirements:
|Calculate costs||Calculate the costs of the aspects to be measured, i.e., products, processes, activities, conceptual framework (such as ITIL).|
|Isolate components||Isolate and even ignore the cost of certain components that make up the cost of the aspect to be measured. For example, if amortization costs are excluded from the costs of the organization you are comparing yourself to, you must be able to identify and exclude those costs from your calculations in order to be on a comparable footing.|
|Understanding the why||Enable decision-makers to truly understand cost structure by creating a model based on cost behaviour and the cause-effect relationships between its components. Using attributes to characterize model components makes it easy for the organization to analyze costs from any number of relevant perspectives.|
|Measure improvement||Discover whether or not a process of activity has become more efficient by calculating its unit cost.|
Whatever your benchmarking exercise, the DECIMAL experts can help you choose the approach that will provide the most relevant results for decision-making.