Coupling Strategic with Competitive Benchmarking

Benchmarking

NOTE: To read Part One of this story, please click HERE.

  • Strategic Organizational Benchmarking: Hoshin Kanri
  • How To – Organizational Benchmarking
  • CPU Benchmarking of Your IaaSa

Strategic Organizational Benchmarking: Hoshin Kanri

We’ve talked about the three types of benchmarking – internal, competitive, and strategic. The last category is perhaps both the most confusing and the easiest external mechanism to put into place, since competitive benchmarking can be tricky just to get all the details.

That’s one reason you see companies using established strategic methods such as Hoshin Kanri. Developed in the late 1950s by Professor Yoji Akao, Hoshin argued that “[e]ach person is the expert in his or her own job, and [businesses should adapt] to use the collective thinking power of all employees to make their organization the best in its field.” Toyota saw incredible success using this method to evaluate its weaknesses and strengthen itself during the recession.

One thing that is helpful about Hoshin is that it makes it easier to compare cross-industrially, from one field to another. Businesses typically are more alike than different, so strategic benchmarking allows you to harvest insight that otherwise might be inaccessible. One example of similarity is the concept of wait time – no matter what type of business, you want that number to be minimized.

According to DeLeeuw Associates’ Stroud, a major enterprise determined that the appropriate benchmark for customer satisfaction was 92%.

“A key dissatisfier was wait time,” said Stroud. “The gap between an organization’s current customer satisfaction score and the benchmark of 92 percent represents the ultimate goal to strive for in a multigenerational plan.”

As you can see, this process is highly analytical; it’s a thoughtful big data project. Above, I don’t mention Hoshin to promote it specifically but to indicate the incredible success that businesses have experienced with strategic benchmarking. Hoshin or a similar program can be used as a tool in a dual benchmarking approach with PassMark-tested infastructure, the latter allowing competitive benchmarking of your technology.

How To – Organizational Benchmarking

Businesses will often work with consultants on implementing Hoshin. However, you can also use these steps to benchmark your business, in collaboration with a partner organization:

  1. Assess various aspects of your performance so you know what to benchmark.
  2. Get top leadership on your side. (If you are top leadership, stay on your own side.)
  3. Write everything down and store it systematically.
  4. Analyze and create a report on the current state of affairs.

Problems that can arise if you don’t know your current situation include:

  • Accidental repetitious collection or reporting on the same data.
  • The initiative could be disorganized or superficial.
  • Benchmarking by outside “experts” could feel random and incompetent, and sometimes that’s because the entire situation is unprepared.
  • Applying outside stipulations to your organization is difficult without laser-focused understanding of your organization.
  1. Determine what your key metrics will be.

You need to know what your core metrics will be, since they serve as building blocks for various comparisons:

  • Measuring the difference between your performance and that of an outside party
  • Monitoring your evolution as you introduce changes
  • Monitoring the development of your strategic benchmarking partners
  • Creating a measurement systems analysis (MSA).

“These comparisons will be valid only if everyone participating in the study measures performance in exactly the same way – every time,” argued Stroud. “It is important to make sure metrics are being established that potential benchmarking partners are probably already tracking or that can be easily derived from existing measurements.”

  1. Document everything.

Write down your parameters:

  • What you are measuring and in what units
  • Anything being omitted
  • Notes on calculating
  • Example situations so it’s immediately understandable.
  1. Clarify exactly what you are benchmarking.

Once everyone sees the project in the same way, it’s easier to:

  • Find any deficiencies in your system
  • Gauge how your customers, employees, and affiliates are affected.
  • Figure out a few mutually reasonable metrics to measure.
  1. Decide how you will gather data.
  2. Figure out your sources and start collecting the data.
  3. Create an information request, in the form of a questionnaire, to help you find a high quality and reliable partner.

The document should be:

  • An opportunity for potential partners to demonstrate excellence
  • Two pages at the most
  • Require no more than half an hour to fill out
  • Primarily multiple-choice
  • States the mission, goals, and needs of the project
  • Begins a process that will continue with more granular surveys.
  1. Figure out how to decide on a partner company.
  2. Create a more granular survey.
  3. Look at the information to see if it is in line with your goals for the project.
  4. Go to the physical organization.
  5. Take your findings and use them to make test adjustments.
  6. Keep leadership abreast.
  7. Work in collaboration with the process owner to implement.
  8. Make updates as necessary.

CPU Benchmarking of Your IaaS

It’s great to use strategic benchmarking such as the Hoshin method, through a consultant or the steps listed above, to improve your organization. Competitive benchmarking of your technology can also help you, but only if it offers a legitimate outlook on performance.

Not all IT benchmarks were created the same. We believe that Passmark is the only practical and objective comparison of the actual performance of different CPU, which is why we list “PassMark per core” for all our cloud VMs.

By Kent Roberts

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