Keeping score: how benchmarking improves performance
Benchmarking has the potential to help organisations improve their business performance – but only if the right data is collected in the right way.
As seen in the Facilities Management Journal, November 2016
Often hailed as a silver bullet to improve an organisation’s processes and profitability, benchmarking is yet to fully deliver on its promise.
However, as our ability to create and collate high quality FM data improves year on year, so do the benefits to be gained from benchmarking.
No longer merely a means to position companies within a marketplace, benchmarking can now be employed to identify and understand best practice and drive continuous improvement both inside and outside the organisation.
When large organisations with multi-site or multi-country facilities begin an internal benchmarking exercise, a collective groan can often be heard from the FM teams. They know what is to come: requests for data they do not wholly own or control, requests for data that don’t translate to their operating model and fear that their department will fall short in some way.
Data is collated with a ‘closest match’ approach, gaps are filled with assumptions and figures adjusted. It’s no surprise that benchmarking often produces confusing or conflicting results with minimal positive impact on the business.
“Benchmarking often fails where the data requested is not linked to how the data is created, and so a best fit data collection process begins,” explains Jesse Klebba, CEO, Urgent Technology. “To successfully benchmark, organisations need to be clear they are measuring on a like-for-like basis from the start.”
Whether a business benchmarks internally or chooses to try to benchmark against competitors will depend on the needs and objectives of that specific business. External benchmarking is by far the most difficult to achieve in terms of high quality results. A third party ‘neutral’ consultant is engaged to gather and examine competing companies’ data. However, the information returned is often generic, low level data that may give an idea of where a competitor sits in the marketplace, but never how its success is achieved.
So if both external and internal FM benchmarking are difficult to achieve accurately, how can the process help drive continuous improvement within a business?
In any company operating different FM models across regions, countries or business units, asset performance and results will vary. Pockets of best practice and excellence will exist, but they need to be identified and supported by trustworthy data. The problem faced by most organisations is that as they grow, both geographically and in terms of product offering, processes and systems tend to multiply. The different ways in which outputs are recorded and measured mean like-for-like benchmarking is simply not achievable.
“Accurate internal benchmarking requires FM data that has been collected in real-time and in a consistent framework across the countries, regions or equipment being compared,” says Klebba. “Standardised data is crucial to achieving effective benchmarking that will improve business performance, identify best practice and elevate FM’s value to executives.”
If a business can truly standardise the way it records the maintenance, servicing and performance of its assets, then it has begun to create a goldmine of data that will enable it to effectively benchmark across the entire organisation. “Drawing on data held in a standardised maintenance management system means an organisation can, for example, compare contractor performance, or evaluate site maintenance spend by country or region, within seconds,” says Klebba. “Without a system that supports a unified workflow and dataset, it is nearly impossible to benchmark across your organisation.”
When management can access data centrally through a standardised system, the personal impact or fear of providing information for benchmarking is removed, along with the possibility of spun or adjusted data. However, extracting data serves no purpose without a clear objective. Klebba suggests FM managers should first establish key baselines before undertaking any benchmarking exercise. These should include: What needs improvement? What is within the control of the FM team? What will have a positive impact on the organisation? Where is data likely to be readily available?
The purpose of the exercise should also be communicated to employees, making clear that it is a tool for identifying areas of best practice to be shared among the organisation to improve services for customers and stakeholders.
The benefits of effective FM benchmarking
- Reduce costs
- Justify costs and practices
- Prioritise best practice
- Add value to the facilities function
- Support a business case for change
- Identify a facility’s strengths and weaknesses
- Justify energy-efficiency improvements
- Analyse continuous trends over months and years
- Identify and remove non-value-adding processes
The Leesman Index
Chris Moriarty, managing director UK and Ireland of Leesman, agrees that external benchmarking organisations need to be able to provide high quality data if it is to be of any real value to clients.
Leesman is a company that helps organisations assess and improve their workplace effectiveness by comparing their performance to workplaces around the world. A simple point of comparison is provided by Leesman’s ‘functionality and effectiveness’ benchmark score (the Lmi). The score is derived from data gathered from hundreds of corporate workplaces, creating what the company describes as the “largest ever research and benchmark database of workplace effectiveness data.”
“In 2010 we set out with a singular objective,” says Moriarty. “To examine at a depth and consistency never before attempted exactly how corporate workplaces support employee and organisational performance. We’re now regarded as a global standard measure.”
Leesman could not have achieved this status without providing robust data that could be defended to a cynical CFO. “Independence was the first and foremost factor. What if the data has been collected by the supplier of the services being measured?” Size is another issue. “Critical to being able to defend benchmark data is the robustness of the sample size behind it. For us, the sample size to benchmark against reached data stability at around 70,000 individual employee responses. Can an organisation trust a benchmark if its sample is not representative?”
As more organisations subscribe, Leesman’s database continues to grow. At the end of the second quarter of 2016, the data represented information on how well 1,400 workplaces in 50 countries were supporting almost 170,000 employees. The surveys used to gather the data are standardised, allowing every organisation to compare themselves to the top performing workplaces. As Moriarty points out, “If there is no consistency to the questions asked then there couldn’t be an effective benchmark.”
Before embarking on any benchmarking exercise, organisations need to be clear about their goals and business drivers. “You need to decide what it is you’re benchmarking against, and why, then add into the mix your strategic objectives, assessing the efficiency of your process, analysing the allocation of your resources, weighing your costs against the industry and so on,” says Moriarty.
Organisations should not limit the scope to their own industry, he advises, nor should benchmarking be a one-time event. “If you are going to use benchmarking to look for differences or inconsistencies, it’s risky to focus on a single dimension, such as FM only; you need to have a wide angle lens and look at all of the data.”
Urgent Technology’s eMaintenance+ software collects valuable, realtime data from across your organisation to allow meaningful benchmarking comparisons and actionable insights.
Or contact us today, to find out how our software could help you.