We know why industry benchmarks, don’t we? Companies benchmark against other companies in the same sector to get better and gain market share. Benchmarking is a process improvement tool. When you benchmark you compare your key costs and productivity indicators with those of other organizations providing the same service. How does this lead to process improvements? The point is not to just measure yourself against other organizations but to look beyond to the processes, technology and business environment associated with the leading indicators. By comparing your processes, technology and environment with those typical of the leading indicators, you gain insight about how you can change your processes, make better use of technology and/or change your operating environment (to include customer behavior) to get better.

Benchmarking is useful in another way. If done well, benchmarking will high light for you the differences that prevent you from attaining the same levels of cost and productivity as the organizations you benchmark against. There are differences in the operating environment in the Federal sector compared to the private sector. These can be driven by mandates applicable only to Government, Agency policy (that may be changed given a compelling enough reason), or work place rules. They may be attributable to the risk adverse nature typical of a public trust or the all-or-nothing attitude towards internal controls also typical of a public trust. They can be because of a reluctance to make the capital investments in technology to move to paperless processing or e-invoicing, for example.  But do not despair. Rather identify and quantify the cost and productivity impact of the things that cannot be changed or will not change. What is left is in the realm of possibility.

But before you run out and benchmark yourself against the best in class, consider this. In the interest of transparency and accountability, your benchmark results should be shared with your customers and stakeholders. If not handled properly, sharing benchmark results is akin to calling a strike on your own position.