The Management Of Technology Innovation And Change Business Essay Example

in relation to those of leading companies, typically within a designated group for comparison purposes. This allows organizations to develop plans for improvements or adoption of specific best practices, aiming to enhance performance in certain areas. Benchmarking is often viewed as an ongoing process where organizations continuously strive to enhance their practices.

It involves comparing how well basic functions and processes are performed between companies.Benchmarking is a valuable tool for companies to gain a competitive advantage.It allows managers to assess and prioritize areas of improvement, enhance performance based on customer expectations,and break away from the typical cycle of change.Benchmarking is a strategic process that helps companies understand the most effective ways to execute activities, achieve lower costs, and improve cost competitiveness. By comparing their performance to that of other companies in similar industries or regions, organizations can identify weaknesses and opportunities for improvement. This can lead to various enhancements such as reducing labor costs, streamlining workflow through reengineered processes and administrative systems, improving data center operations through consolidation and downsizing, collaborative planning between business and IT departments, implementing new technology, outsourcing tasks and functions, redesigning development and support processes, as well as restructuring IT functions. Through benchmarking, companies can adopt successful strategies used by others in order to make their own plans more efficient. It is an essential part of generating innovative ideas for process improvement, supporting quality improvement plans, motivating staff to enhance performance, meeting management's need for competitive evaluations,and targeting critical success factors necessary for long-term success and gaining a competitive advantage.The identification of inefficiencies and potential areas for improvement is the main focus of benchmarking. When implementing a benchmarking initiative, companies should consider

the questions of when, why, who, what, and how. Benchmarking can be performed at any time but is typically done in response to internal company needs. According to C.J. McNair and Kathleen H.J. Leibfried in their book "Benchmarking: A Tool for Continuous Improvement," there are various triggers for benchmarking such as quality programs, cost reduction/budget processes, efforts to improve operations, management changes, new operations/ventures, reevaluating existing strategies, and competitive attacks/crises. The most important question in management's decision to start the benchmarking process is why it should be done. Companies engage in benchmarking for multiple reasons including demonstrating a commitment to embracing change proactively rather than reacting to it and establishing relevant goals and performance measures that focus on external/customer needs. It also encourages innovative thinking and focuses on high-value opportunities while gaining early awareness of competitive disadvantages. Benchmarking promotes teamwork based on competitive demand and data analysis rather than intuition.Companies have various options when it comes to choosing who to benchmark against. They may choose to conduct internal benchmarking within different departments or divisions of the organization to identify best practices and establish baseline activities. Alternatively, they may benchmark against direct competitors in order to evaluate their own performance and identify areas for improvement based on customer expectations. Industry benchmarking is also valuable as it provides a broader perspective on trends and helps establish performance baselines.

The most effective way to benchmark involves examining multiple industries in order to discover new and advanced patterns. This approach not only offers a wide range of options but also maximizes the chances for improvement. Benchmarking can focus on different aspects, such as functions, processes, or strategic issues, and can

be used to define an organization's function or mission. It can also be used to analyze current practices and identify patterns that support important processes or goals.

When focusing on specific processes or activities, conducting a thorough analysis is crucial. This analysis can take the form of either vertical benchmarking, which concentrates on specific sections or functions within an industry; or horizontal benchmarking, which focuses on specific processes or activities across industries. When addressing strategic issues, the objective is to identify factors that are vital for maintaining a competitive advantage.This involves defining measures of excellence that encompass these factors and identifying companies that excel in these areas. To carry out benchmarking effectively, various sources of information are utilized. These may include published materials, trade meetings, as well as conversations with industry experts, consultants, customers, and sales representatives.

The emergence of Internet technology has simplified the benchmarking process as it provides access to various databases like Power-MARQ from the American Productivity and Quality Center, which contains performance indexes for thousands of companies. Additionally, the internet allows companies to conduct electronic surveys in order to gather benchmarking data.

The way a company conducts benchmarking may vary depending on factors such as resources, deadlines, and the availability of information sources. There are several advantages to utilizing benchmarking in an organization. One advantage is that it has the potential to lower labor costs. For instance, a small manufacturing company can analyze how a top competitor utilizes robots for basic functions.

By implementing similar robotic systems, the company may be able to significantly reduce labor costs. Information regarding these systems can be obtained through the competitor's website or online articles and assistance in setting

up the system can be sought from the robot manufacturer.

Another benefit of benchmarking is improving product quality.Engineers have the option to purchase and analyze competitors' products in order to determine their superior performance in the industry. For companies, benchmarking can be used to improve product quality by comparing elements within their own products to those of their rivals. This analysis allows for enhancements that ultimately lead to increased sales and profits. Promoting these improvements through various channels, like brochures, sales representatives, and advertisements, can further boost sales among core customers. Benchmarking also aids in operating more efficiently and reducing expenses for companies, resulting in increased profits.

However, internal benchmarking may have limitations if a company's top department is not as efficient as others in the industry. Implementing benchmarking requires a significant investment of time, labor, and capital; however, careful planning can help reduce costs associated with travel, team meetings, and employee time. Strategic planning is necessary to minimize benchmarking costs. Nevertheless, there are several disadvantages that should be considered.

The cost involved directly depends on the size and scope of a benchmarking project. To mitigate these costs effectively, one approach is breaking down the project into steps which reduces both investment and risk simultaneously. Another strategy involves collaborating with non-competitor organizations such as government agencies to share resources and divide expenses efficiently
Consultant firms can provide assistance in benchmarking projects, possessing technical knowledge and expertise in gathering and interpreting data efficiently.
Careful research on a consultant's background is necessary to ensure effectiveness but may come with an additional cost.
Fortunately, hiring extra staff or expanding current roles is not required for this process.
Education and travel play a role in benchmarking

costs.
After selecting a team, they must be educated on benchmarking methods through workshops, seminars, meetings, and courses.
This information then needs to be shared with others.

When researching organizations for benchmarking purposes, it is beneficial to witness them in action and meet the team responsible for implementing changes firsthand.
Effective communication plays a crucial role in keeping benchmarking costs low.

The text below discusses different types of benchmarking in back-office procedures, emphasizing the importance of outsourcing and comparing performance. It also highlights the significance of analyzing competitors and evaluating various functions within a company. This includes knowing your own needs and weaknesses and sharing information about yourself.
It is also important to inform others within your organization about what has been learned through studies and analysis, and how it will be implemented using flow charts, matrices, schematics etc.The text below has beenand unified while keeping the and their contents intact:

Clear communication is important for management to stay informed about the progress of a project, minimize confusion, and avoid conflicts among team members. There are various types of benchmarking that can be employed in different scenarios. Process benchmarking involves observing and studying business processes to identify and adopt best practices from other companies. Activity analysis is necessary when benchmarking for cost efficiency, particularly in back-office procedures where outsourcing may be considered. Financial benchmarking involves analyzing finances and comparing results to assess overall competitiveness and productivity. From an investor perspective, it is important to compare with peer companies as well as consider other investment opportunities. Performance benchmarking entails evaluating competitive position by comparing products and services with those offered by competitor companies. Lastly, merchandise benchmarking refers to the process of

designing new products or upgrades.Studying competitors' products to identify strengths and weaknesses is a key aspect of benchmarking. There are different types of benchmarking that can be used for this purpose, including strategic benchmarking, functional benchmarking, and best-in-class benchmarking.

Strategic benchmarking involves observing how others compete, even across different industries. Functional benchmarking focuses on improving the performance of specific functions within a company, such as Human Resources or Finance and Accounting. This type of comparison may require disaggregating processes to ensure valid comparisons in terms of cost and efficiency.

Best-in-class benchmarking involves analyzing the leading competitor or company that excels in a specific function. Operational benchmarking assesses various aspects like staffing, productivity, office flow, and analyzes performed processes.

Energy benchmarking involves collecting, analyzing, and comparing energy performance data to evaluate and compare similar activities. This can be done within a single organization or between competing entities. Collaborative benchmarking is also possible where groups of companies work together to conduct benchmarks.

For example, Dutch municipally-owned water supply companies have been engaging in collaborative benchmarking since 1997 through their industry association. Similarly, the UK construction industry has conducted benchmarks with financial support from the government since the late 1990s.
Many benchmarking methodologies have been developed in response to the popularity and acceptance of benchmarking. A significant book in this field is Boxwell's "A Benchmarking for Competitive Advantage" (1994), along with other practical guides by authors such as Kaiser Associates and Robert Camp.

KAISER's SEVEN-STEP Approach TO BENCHMARKING

Kaiser's 7-step benchmarking process, used in over 4,000 projects, offers structure and analytical rigor for both internal and external benchmarking:

Benchmarking Procedure

Step 1:

This step involves accurately defining the process to be benchmarked. It serves as the foundation for

the entire benchmarking process. Making a mistake at this stage could result in wasting valuable resources later on. Consider these questions: Have departmental priorities been established? Determine if the department has clearly defined its overall purpose, including long-term goals and short-term objectives. What level of change is needed? Does the entire system need rethinking or is it just a specific process within that system that requires improvement? Can improvement be achieved by upgrading a particular task within the process? Has the selected work process been flowcharted? Creating a flowchart can provide an initial overview of the entire process. This text provides guidelines for conducting benchmarking and determining the feasibility of process reform.The text suggests the evaluation of job countries and potential problem countries, the establishment of critical measures for future progress, and the assessment of process reform affordability. It also emphasizes determining performance measures that align with customer demands and prioritizing them accordingly. The importance is stressed on creating a project description that includes rationale, goals, objectives, cost and duration, critical measures, potential gains, and impact on the organization. Additionally, gathering evidence to demonstrate the necessity of the project in terms of cost versus benefits is suggested. Once step 1 is completed, the organization will have a focused procedure for implementing necessary changes and accurately measuring their processes against others and future projections.
In step 2: Benchmarking costs include visit costs such as accommodation, travel expenses, meals, a small gift, and time lost from work. Time costs involve researching issues, visiting other companies, and analyzing their performance which may require diverting from regular tasks partially each day potentially leading to additional staff. Benchmarking Database Costs are

found helpful by organizations incorporating benchmarking into daily operations as it establishes and maintains a database of best practices along with associated companies.Utilizing internet resources has become a cost-effective way to streamline the benchmarking process. These resources gather benchmarks and best practices from various organizations, industries, and countries. Initially used for comparing corporate strategies, these techniques now extend to comparing technical products, known as "technical benchmarking" or "product benchmarking." This approach is widely adopted in the automotive industry to design user-friendly products at minimal costs. Traditionally, auto manufacturers internally analyzed existing cars and systems, but due to high costs involved, specialized companies have been outsourced for such tasks. This outsourcing has led to significant cost reductions and the development of efficient tools like benchmarking software (Software A). Such software organizes complex information effectively and supports different types of benchmarking approaches while reducing associated costs.Another approach to comparison involves using general cost or production information to identify units with strong or weak performance levels. Two common methods for quantitative analysis in metric benchmarking are data envelope analysis (DEA) and regression analysis. DEA estimates the cost level that an efficient company should achieve in a specific market. In infrastructure regulation, DEA can be used to reward companies/operators whose costs are close to the efficient frontier with additional profits. Regression analysis estimates what an average firm should achieve. With regression analysis, companies that perform better than average can be rewarded while those that perform worse can be penalized.

Benchmarking studies compare the performance of operators in various industries using statistical techniques like stochastic frontier analysis, allowing for identification of high and weak performers in schools, hospitals, water utilities, electric

utilities, etc. One challenge in benchmarking is the variability in metric definitions used by different companies or divisions within the same organization. This variability may arise over time due to changes in leadership and priorities. Consistency in metric definitions between compared units is crucial for meaningful comparisons.This text emphasizes the importance of accurately verifying improvements in organizations. It suggests that creating a culture of competition, pride, confidence, energy, and continuous improvement can be achieved by striving to identify and excel in best-in-class performance. The text also highlights benchmarking as a cost-effective and quick method that is easily understood by managers, workers, suppliers, customers, the general public, and the media. However, it cautions against solely focusing on performance measurement and losing sight of the ultimate goal of improving performance. Measuring organizational performance can be challenging for public organizations with multiple goals. According to Fischer's perspective, information is never perfect and minor differences should not be overly emphasized. Comparisons with competitors can help identify potential issues but certain intangible factors like spirit, energy, and attitude may be difficult or impossible to quantify.Unfortunately, benchmarking may hinder creativity by placing emphasis on replicating existing achievements instead of promoting innovative thinking and breakthroughs. Furthermore, it can impede progress within a specific field. It is important to carefully analyze benchmarks before adopting them as cultural, temporal, or geographic factors could affect their reliability. Additionally, the cost of benchmarking is often overlooked in research literature despite requiring significant time, energy, and resources. Therefore, it is crucial to consider these aspects before engaging in benchmarking activities. Extensive benchmarking efforts can exhaust an organization's ability to innovate and may negatively impact the quality and

quantity of services provided if a complex performance measurement system is used to establish benchmarks.