Explain BPR? When to take BPR ?

Davenport&Short (1990) define business process as a set of logically related tasks performed to achieve a
defined business outcome.
Hammer (1990) has defined Business Process Reengineering the fundamental rethinking and radical
redesign of business processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service, and speed.
This definition comprises four keywords: fundamental, radical, dramatic and processes.
Keyword 1: Fundamental
Understanding the fundamental operations of business is the first step prior to reengineering. Business people
must ask the most basic questions about their companies and how they operate: Why do we do what we do?
and Why do we do it the way we do? Asking these basic questions lead people to understand the fundamental
operations and to think why the old rules and assumptions exist. Often, these rules and assumptions are
inappropriate and obsolete.
Keyword 2: Radical
Radical redesign means disregarding all existing structures and procedures, and inventing completely new ways
of accomplishing work. Reengineering is about business reinvention, begins with no assumptions and takes
nothing for granted.
Keyword 3: Dramatic
Reengineering is not about making marginal improvements or modification but about achieving dramatic
improvements in performance. There are three kinds of companies that undertake reengineering in general. First
are companies that find themselves in deep trouble. They have no choice. Second are companies that foresee
themselves in trouble because of changing economic environment. Third are companies that are in the peak
conditions. They see reengineering as a chance to further their lead over their competitors.
Keyword 4: Processes
The final keyword Process, though the most important in the definition, is the one that gives most corporate
managers the greatest difficulty. Most business people are not process-oriented; they are focused on tasks, on
jobs, on people, on structures, but not on processes.

BPR is done by
1. Companies at its declining stages.
2. Companies in its stable stages.
3. Companies in their peak stages.

Difference between continous improvement and BPR

Continuous improvement is an approach to improving the competitiveness, effectiveness and flexibility of a
whole organization. It is essentially a way of planning, organizing and understanding each activity, and depends
on each individual at each level. CONTINOUS IMPROVEMENT involves placing the customer as the focal
point of operations. Its aim is to continuously improve process performance in order to satisfy customer
requirements. At the center of TQM is the concept of the management of processes, and the existence of internal
suppliers and customers within organizations.
BPR also emphasizes focus on the process. However, BPR is much more radical than CONTINOUS
IMPROVEMENT. Quality approaches concentrate on improving existing processes; process reengineering
starts from scratch to create new processes without the constraints of existing methods, people, technology,
management systems, or organizational structures.
The major differences between Quality Improvement and Process Reengineering approaches are provided by
Chang (1994) in the following table:

Differences Between Quality Improvement (TQM) and Process Reengineering (BPR)

Quality-Improvement
Major Factor

Approach

Reengineering

Senior-

Hands-on

Approach
Hands-on, active involvement throughout the

management

becoming

involvement
Intensity of team-

reinforcement-oriented
Ongoing involvement on an

Ongoing involvement for a specified duration

member

as-needed, part-time basis

on a full-time basis

involvement
Improvement goals

Focus

initially,

and
more

on

effort

incremental Focus on dramatic improvements in a short

improvements over a period of time frame

time
Emphasis

Implementation
approach
Magnitude

of

on

improving Emphasis on creating new ways of doing

current work processes

things
Limited disruption to existing Radical changes to existing systems and

organizational

systems and structures

change
Breadth of focus

Addresses narrowly defined Addresses processes that span entire business

Use of benchmark

work processes
Used
after

data
Dependence

improvement, to compare data selection

Information systems used for Information systems used as a central enabler

on

information

data

collection

systems

interpretation

structures

units
process Used on front end, to assist with process

and with on-line access

Quality specialists tend to focus on incremental change and gradual improvement of processes, while
proponents of reengineering often seek radical redesign and drastic improvement of processes. On the other
hand, Davenport&Short (1990) suggest that CONTINOUS IMPROVEMENT and BPR can -and should- form
an integrated strategic management system within organizations.

Relationship Between BPR and Information Technology

Information Technology (IT) refers to the capabilities offered by computers, software applications, and
telecommunications. (Davenport&Short, 1990)
Hammer (1990) considers IT as the key enabler of BPR, which he considers as "radical change." He
prescribes the use of IT to challenge the assumptions inherent in the work processes that have existed since
long before the advent of modern computer and communications technology.
Davenport&Short (1990) argue that BPR requires taking a broader view of both IT and business activity, and
of the relationships between them. IT and BPR have recursive relationship. IT capabilities should support
business processes, and business processes should be in terms of the capabilities IT can provide.
Davenport&Short (1990) refer to this broadened, recursive view of IT and BPR as the new industrial
engineering.
In order to more effectively respond to BPR, IT must play a more active role throughout a BPR project. IT
must:

Increase their level of participation in all areas of a BPR initiative;

Provide key information regarding automated processes to business analysts;

Build a transition strategy that meets short and long-term retooling requirements;

Enforce the integrity of redesigned business processes in the target system;

Reuse business rules and related components that remain constant in a target application.

Factors driving a BPR project can include improving customer service, streamlining processes to cut costs, or
addressing inefficiencies in other high impact areas. For example, customers frustrated with having to speak to
multiple individuals regarding an insurance claim may switch to the competition. To address this problem, an
insurance provider determines that service functions must be consolidated to one point of contact. The
underlying systems that manage claims handling do not support single point of contact processing. In this case,
legacy systems have become a barrier to the success of the BPR initiative.
The relationship of BPR analysis and IT is reciprocal because business and technical analysts must devise a
continuous feedback communication loop for projects to work. This is particularly critical because current
systems analysis helps articulate the as-is business model while the redesigned business model dictates the
impact BPR has on existing information architectures. Once this reciprocal cycle is in place, IT can determine
exactly how to upgrade, redesign, or replace selected systems in order to implement reengineered business
processes. Figure one highlights key steps in a retooling strategy.

Finally, Attaran (2003) categorizes IT roles in BPR into three phases:

Phase 1: Before the process design (as an enabler)
Create infrastructures and manage information that support evolving organization
Foster process thinking in organizations
Identify and select process for redesign
Participate in predicting the nature of change and anticipate the information needs to support that change
Educate IT staff in non-technical issues such as marketing, customer relationships, etc.
Participate in designing measures of success/failures of reengineering

Phase 2: During the process design (as a facilitator)

Bring vast amounts of information into the process
Bring complex analytical methods to bear on the process
Enhance employees ability to make more informed decisions with less reliance on formal vertical

information flows
Identify enablers for process design
Capture the nature of proposed change and match IT strategy to that change
Capture and disseminate knowledge and expertise to improve the process
Communicate ongoing results of the BPR effort
Transform unstructured processes into routinized transactions
Reduce/replace labor in a process
Measure performance of current process
Define clear performance goals and objectives to drive the implementation
Define the boundaries and scope of the process

Phase 3: During the implementation (as an implementer)

Create a digital feedback loop
Establish resources for critical evaluation of the reengineered process
Improve IT processes to meet increasing needs of those divisions that have gone under reengineering

processes
Institute a program of cleanup and damage control in case of failure

 Communicate ongoing results of the BPR effort

Help to build commitment to BPR
Evaluate the potential investment and return of reengineering efforts

Reengineering Success Factors

More than half of early reengineering projects failed to be completed or did not achieve bottom-line business
results, and for this reason business process reengineering "success factors" have become an important area of
study.
Success factors are a collection of lessons learned from reengineering projects and from these lessons common
themes have emerged. The success factors that lead to successful outcomes for reengineering projects include:
1. Top Management Sponsorship (strong and consistent involvement)
2. Strategic Alignment (with company strategic direction)
3. Compelling Business Case for Change (with measurable objectives)
4. Proven Methodology (that includes a vision process)
5. Effective Change Management (address cultural transformation)
6. Line Ownership (pair ownership with accountability)
7. Reengineering Team Composition (in both breadth and knowledge)
Top Management Sponsorship
Major business process change typically affects processes, technology, job roles and culture in the workplace.
Significant changes to even one of these areas require resources, money, and leadership. Changing them
simultaneously is an extraordinary task. If top management does not provide strong and consistent support,
most likely one of these three elements (money, resources, or leadership) will not be present over the life of the
project, severely crippling your chances for success.
Strategic Alignment

You should be able to tie your reengineering project goals back to key business objectives and the overall
strategic direction for the organization. This linkage should show the thread from the top down, so each person
can easily connect the overall business direction with your reengineering effort. You should be able to
demonstrate this alignment from the perspective of financial performance, customer service, associate
(employee) value, and the vision for the organization.
Business Case for Change
In one page or less you must be able to communicate the business case for change. Less is preferred. If it
requires more than this, you either don't understand the problem or you don't understand your customers.
The business case for change will remain the center piece that defines your project, and should be a living
document that the reengineering team uses to demonstrate success. Financial pay back and real customer impact
from major change initiatives are difficult to measure and more difficult to obtain; without a rigorous business
case both are unlikely.
Proven Methodology
The previous module presented several BPR methodologies, and it is important to note that your methodology
does matter. Seat-of-the-pants reengineering is just too risky given the size of the investment and impact these
projects have on processes and people.
Not only should your team members understand reengineering, they should know how to go about it. In short,
you need an approach that will meet the needs of your project and one that the team understands and supports.
Change Management
One of the most overlooked obstacles to successful project implementation is resistance from those whom
implementers believe will benefit the most. Most projects underestimate the cultural impact of major process
and structural change, and as a result do not achieve the full potential of their change effort.
Line Ownership

The line operation probably cannot heal itself when it comes to major business re-design. Staff and consultants
have no lasting accountability for the solution, and never succeed at forcing solutions on line organizations.
You need both. You need the line organization to have the awareness that they need help, to contribute their
knowledge, and to own the solution and implementation. At the same time you need the expertise and
objectivity from outside of the organization.
Building this partnership is the responsibility of the line organization, stakeholders and re-design team. No
group is off the hook.
Reengineering Team Composition
The reengineering team composition should be a mixed bag. For example,

some members who don't know the process at all,

some members that know the process inside-out,

include customers if you can,

some members representing impacted organizations,

one or two technology gurus,

each person your best and brightest, passionate and committed, and

some members from outside of your company.

FACTORS DETERMINED TO HINDER REENGINEERING SUCCESS

Fear of job loss
Somewhere during this century, reengineering became synonymous with down sizing and worker layoffs.
However, many of the early corporate projects did not include such drastic measures.

Unfortunately, when companies take on a project that will cost extremely large amounts of capital, senior
management wants to see some hard evidence that there will be a huge savings some where. One of the easiest
ways to provide a cost/benefit to a BPR project is cut the workforce. Many cases have shown this only reduces
the available talent pool of an organization. Fear and anxiety fill the hearts of those workers remaining. Down
sizing can profoundly affect the lives and productivity of individuals, whether they leave the organization or
survive the down sizing
Therefore, BPR drives fear into the organization and destroys the to entire social segment of the socio-technical
system which produces the product or service
Inadequate skills of workers
An organization can be categorized by people into three categories; eager adopters, prove-its, and resisters.
Only about 10 to 15 percent of people are considered eager adopters. These people like technology and are
stimulated by learning how to use it. The other 85% probably don't have the skills for BPR with IT, but may not
admit to it.
No reengineering effort will succeed without first reeducating and retraining the people who will ultimately
work with the new process The focus needs to be on the people not on the processes.
Lack of management support
BPR became the method to wipe the slate clean and start over with business processes. However, far too often
this was applied to employees and middle managers. Senior management sometimes felt it was not necessary
for them to also change with IT. However, when employees found out the CEO has his secretary retrieve and
sends his E-mail; credibility for a new system project was lost. Management often allows money to be thrown
around purchasing technology, but then overlook financing training of people necessary to infuse or utilize the
IT. Strong leadership is necessary if BPR projects are not to be ruined by psychological and political disruptions
that accompany change

Change of organizational structure and culture

Human passions and emotions react strongly when the prospect of change intrudes on their familiar working
and living patterns. It is believed that the necessary cooperation to achieve success will not occur unless people
are assured they will not be working themselves out of a job. .

What is a Business Process?

Davenport&Short (1990) define business process as a set of logically related tasks performed to achieve a
defined business outcome.
In their view, processes have two important characteristics:
They have customers, that is, processes have defined outcomes, and there are recipients of the outcomes.
They cross organizational boundaries, that is, they normally occur across or between organizational

subunits.
On the other hand, Hammer&Champy (1993) define business process as a collection of activities that takes
one or more kinds of input and creates an output that is of value to the customer.
Examples of processes include: developing a new product; ordering goods from a supplier, creating a
marketing plan, processing and paying an insurance claim, etc.
Davenport&Short (1990) have categorized business processes according to three dimensions:
Organizational entities or subunits involved in the process (Interorganizational, Interfunctional, and

Interpersonal Processes)
The type of objects manipulated (Physical and Informational Processes)
The type of activities taking place (Operational and Managerial Processes)

Different process types require different levels of management attention and ownership, need different forms of
IT support, and have different business consequences.

A business process or business method is a collection of related, structured activities or tasks that produce a
specific service or product (serve a particular goal) for a particular customer or customers. It often can be
visualized with a flowchart as a sequence of activities.
The core business of an organization is an idealized construct intended to express that organization's "main" or
"essential" activity.
The corporate trend

in

the

mid-20th

Century

of

acquiring

new

enterprises

and

forming conglomerates enabled corporations to reduce costs funds and similar investment vehicles, and
sometimes the following of a popular trend among corporate management seeking to appear current and
impress investors.
Core business process means that a firm's success depends not only on how well each department performs its
work, but also on how well the company manage to coordinate departmental activities to conduct the core
business process, which is;
1. The market-sensing process Meaning all activities in gathering marketing intelligence and acting on the
information.
2. The new-offering realization process Covering all activities in research, development and launching new
quality offerings quickly and within budget.
3. The customer acquisition process all the activities defining the target market and prospecting for new
customers
4. The customer relationship management processes all the activities covering building deeper
understanding, relationships and offerings to individual customers.
5. The fulfillment management process all the activities in receiving and approving orders, shipping out on
time and collecting payment.
To be successful, a firm needs to look for competitive advantages beyond its own operations. The firm needs to
look at the competitiveness value chain of suppliers, distributors and customers. Many companies today have
partnered with specific suppliers and distributors to create a superior value delivery network.

Task and sub-process

A business process is mainly formed by activities that need to be performed to complete the process. There are
two kinds of activities - task and sub-process. A task is an atomic activity which represents work that cannot be
broken down. On the contrary, sub-process represents work that can be broken down to a finer level of detail.

Flow Chart
A flow process chart is a diagram that utilizes both text and symbols to show the actions required to complete a
given process. This type of chart lays out each step in chronological order, with symbols indicating the
beginning and ending of the process as well as decisions and actions that occur along the way. A flow process
chart is useful for visualizing the procedure in question and identifying areas of weakness.
Process flow symbols typically include three distinct shapes. An oval is used to signify the beginning and
ending points of the process. A rectangle indicates actions, and a diamond indicates a decision. Each shape is
connected to other shapes by an arrow, which leads the viewer from one process to the next. Each shape
contains words describing that step of the process.
A flow process chart typically has a single start point. This may be labeled "Start" or it may indicate the purpose
of the chart, such as "Customer Service Call." From this point, arrows will lead to possible actions or decisions.
Continuing with the previous example, a flow process chart on dealing with customer service calls may include
questions that the caller should be asked, such as "What system are you operating on?" Each question will
branch out to possible answers. These answers may lead to another question to further clarify the problem, or a
solution which will effectively achieve the goal of the call.
After a series of decisions and actions, the flow process chart will ultimately lead to an end point. Some charts
will have a single beginning and end, while others can result in multiple conclusions. A customer service call
could end with a variety of solutions fitting for the problem. The chart may end there, or point each solution to
another action, such as a prompt to complete a survey on the effectiveness of the service.
Actions or decisions that apply to more than one scenario will not appear multiple times on a flow process chart.
The unifying process will appear once with multiple arrows leading up to it. If the final goal of the flow chart is

the same regardless of the process, the oval signifying the end point of the chart may be traced back to multiple
actions or decisions.
A flow process chart is a useful tool for businesses, as it can provide a visual of the actions that are taken
throughout the course of a process. If the process seems overly complicated, this chart will help identify weak
points where it can be clarified or improved. A flow process chart is also useful for making decisions. It can
provide easy-to-read instructions for following the correct procedure in a variety of situations.

Support Process

- Activity or function that supports the day-to-day operations of an organization, such

as accounting, communications, maintenance, sales.

6
Advantages of BPR
1. Satisfaction
A big advantage of reengineering is that the work becomes more satisfying because the workers get a greater
sense of completion, closure, and accomplishment from their jobs. The employee performs a whole job, a
processor a sub process, that by definition produces a result that somebody cares about. The workers not only
try to keep the boss happy or to work through the bureaucracy. More important is the fact to satisfy the
customer needs.
2. Growth of Knowledge
Furthermore, the personal development within a process team environment does not play such an important role
which means climbing up the hierarchy isa minor goal. In this case it is much more important to get a
widespread knowledge of the whole process and there are no such things as "mastering" a job; as a worker's
expertise and experience grow, his or her job grows with it.
3. Solidarity to the Company

"Moreover, since workers in a reengineered process spend more time on valueadding work and less time on
work that adds no value, their contributions tothe company increase, and, consequently, jobs in a reengineered
environment will on the whole be more highly compensated."
4. Demanding Jobs
"There is, however, a challenging side to all this good news about work in are engineered environment. If jobs
are more satisfying, they are also more challenging and difficult. Much of the old, routine work is eliminated or
automated. If the old model was simple tasks for simple people, the new one is complex jobs for smart people,
which raises the bar for entry into the workforce. Few simple, routine, unskilled jobs are to be found in are
engineered environment

. This fact that the jobs are more demanding can be either an advantage or a disadvantage. It depends on the
view from where you consider it. Unskilled employees might get difficulties to get along with theprocess
changings
. Some people are just not able to perform several tasks. For such persons it will be probably difficult to survive
within this new environment which mostly leads to a personal failure in their job.
5. Authority
In a traditional oriented company the management expects from the employees that they follow some specific
rules. In contrast to that the reengineered companies "dont want employees who can follow rules; they want
people who will make their own rules. As management invests teams with the responsibility of completing an
entire process, it must also give them the authority to make the decisions needed to get it done."

7
Disadvantages of BPR
1. Resistance to the change
"There will certainly be some resistance to the change necessary for reengineering, but the key is to expect this
resistance and develop ways to confront it. Employees will be most concerned about their job status after are
engineering; they will often show this by promoting opposition to the plan. Employers must confront this and
deal with the employees concerns and not
their arguments."
2. Drawbacks to Business Process Reengineering

"People are not inherently opposed to change... but they dont like surprises. It is a leader's responsibility to let
people know what the issues are."
[Mark Wallace, CEO, Texas Children's Hospital]"Just understanding how to reengineer does not ensure success.
When clearly thought out and implemented properly, BPR can be a very good way to improve the success of a
company. Unfortunately, many companies implement BPR as a fad, forgetting completely about the people
involved. Companies that wish to use Business Process Reengineering must determine the best strategy
andfollow through with the objectives. BPR will not be successful if the company flagellates. It will also not be
successful if the company uses BPR over and over again. The reengineering process must come from the top
down

theexecutives must be committed and ready to promote the changes as an example for the rest of the company."
3. Higher Demands to the Workers
Empowering the workers is an inevitable step in a reengineered process. Therefore the companies which hire
new workers have to consider additional
criterias
in their hiring. "It is not longer enough merely to look at prospective employees' education, training, and skills;
their character becomes an issue aswell. Are they self-starting? Do they have self-discipline? Are they motivated
to-do what it takes to please the customer?" [27] [Hammer, Champy, 2001]This might be more complicated to
find the right people for one specific job. The worker has to be a kind of "All-rounder" which can perform
several jobs. As itwas enough to convince a possible employer in a job interview with practical skills, now it is
also very important to have the more and more demanded soft skills. "For multidimensional and changing jobs
companies dont need peopleto fill a slot, because the slot will be only roughly defined. Companies need people
who can figure out what the job takes and do it, who can create the slot that fits them. Moreover, the slot will
keep changing. In an environment of flexibility and change, it is clearly impossible to hire people who already
know everything they're ever going to need to know, so continuing education over lifetime of a job becomes the
norm in a reengineered company."

The DMAIC project methodology has five phases:

Define the problem, the voice of the customer, and the project goals, specifically.

M measure key aspects of the current process and collect relevant data.
Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are,
and attempt to ensure that all factors have been considered. Seek out root cause of the defect under
investigation.
I improve or optimize the current process based upon data analysis using techniques such as design of
experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up
pilot runs to establish process capability.
C ontrol the future state process to ensure that any deviations from target are corrected before they result in
defects. Implement control systems such as statistical process control, production boards, visual workplaces,
and continuously monitor the process.
The steps in each successive PDCA cycle are
PLAN
Establish the objectives and processes necessary to deliver results in accordance with the expected output (the
target or goals). By establishing output expectations, the completeness and accuracy of the specification is also
a part of the targeted improvement. When possible start on a small scale to test possible effects.
DO
Implement the plan, execute the process, make the product. Collect data for charting and analysis in the
following "CHECK" and "ACT" steps.
Check
Study the actual results (measured and collected in "DO" above) and compare against the expected results
(targets or goals from the "PLAN") to ascertain any differences. Look for deviation in implementation from the
plan and also look for the appropriateness and completeness of the plan to enable the execution, i.e., "Do".
Charting data can make this much easier to see trends over several PDCA cycles and in order to convert the
collected data into information. Information is what you need for the next step "ACT"
ACT

Request corrsective actions on significant differences between actual and planned results. Analyze the
differences to determine their root causes. Determine where to apply changes that will include improvement of
the process or product. When a pass through these four steps does not result in the need to improve, the scope to
which PDCA is applied may be refined to plan and improve with more detail in the next iteration of the cycle,
or attention needs to be placed in a different stage of the process.
Benchmarking is the continuous, systematic process of measuring ones output and/or work processes against
the toughest competitors or those recognized best in the Industry
Benchmarking in different types:
Strategic Benchmarking:
Where businesses need to improve overall performance by examining the long-term strategies and general
approaches that have enabled high-performers to succeed. It involves considering high level aspects such as
core competencies, developing new products and services and improving capabilities for dealing with changes
in the external environment. Changes resulting from this type of benchmarking may be difficult to implement
and take along time to materialize.
Purpose Re-aligning business strategies that have become inappropriate
Performance or Competitive Benchmarking:
Businesses consider their position in relation to performance characteristics of key products and services.
Benchmarking partners are drawn from the same sector. This type of analysis is often undertaken through trade
associations or third parties to protect confidentiality.
Purpose; Assessing relative level of performance in key areas or activities in comparison with others in the
same sector and finding ways of closing gaps in performance
Process Benchmarking:
Focuses on improving specific critical processes and operations. Benchmarking partners aresought from best
practice organisations that perform similar work or deliver similar services.Process benchmarking invariably
involves producing process maps to facilitate comparisonand analysis. This type of benchmarking often results
in short term benefits.
Purpose: achieving improvements in key processes to obtain quick benefits

Functional Benchmarking:
Businesses look to benchmark with partners drawn from different business sectors or areasof activity to find
ways of improving similar functions or work processes. This sort of benchmarking can lead to innovation and
dramatic improvements.
Purpose Improving activities or services for which counterparts do not exist
Internal Benchmarking:
Involves benchmarking businesses or operations from within the same organization (e.g. business units in
different countries).The main advantages of internal benchmarking are that access to sensitive data and
information is easier; standardized data is often readily available; and, usually less time and resources are
needed. There may be fewer barriers to implementation as practices may be relatively easy to transfer across the
same organisation.However, real innovation may be lacking and best in class performance is more likely to be
found through external benchmarking.
Purpose Several business units within the same organization exemplify good practice and management want to
spread this expertise quickly, throughout the organization
External Benchmarking:
Involves analyzing outside organizations that are known to be best in class. External benchmarking provides
opportunities of learning from those who are at the "leading edge. This type of benchmarking can take up
significant time and resource to ensure the comparability of data and information, the credibility of the findings
and the development of sound recommendations.
Purpose: Where examples of good practices can be found in other organizations and there is a lack of good
practices within internal business units.
The 5 Phases of Benchmarking
The key steps in benchmarking process are divided into five phases starting with the planning phase and
evolving through analysis, integration, action, and finally maturity. In each of the five phases, there are actions
that you need to accomplish. While you con and should modify them to meet your particular environment, it is
important to remember that these actions are minimal for successful implementation of the overall
benchmarking process.

Planning phase
The objective of this phase is to lay out your plan for benchmarking. The key question you need to address are
the basic elements of any plan. Specifically, three general questions must be answered:
What will be benchmarked? Every function of your business delivers a product, so you need to identify which
of these products must be benchmarked.
Who is your best competitor? While you recognize that your major business competitors are your primary
concern, you can also benchmark against other companies that set the standard in a functional activity.
How will the data be collected? Just keep in mind that there is no one right way to do benchmarking.
Analysis phase
Once you acquired the data, you must then analyze them. The objective of this phase, after all, is to understand
your competitors strengths and to assess those strengths against your own performance. Therefore, it is
essential to find the answer of these basic questions:
Is the competition really better? If so, how much?
Why are they better?
What can we learn from them?
How can we apply what we have learned to our business?
The answers of these questions will help you to find the gap between you and your competitors.
Integration phase
Benchmarking really begins to earn its keep during this phase. The first initiative is to gain senior
managements acceptance of the results of benchmarking analysis and its commitment to develop short-term
useful action plans. Once senior management understands and accepts the date and the conclusions, then the
development of strategies and action plans can begin. The problem-solving methodology is your best option
during this phase. Keep in mind that timing and communication are essential.

Action phase
After Integration phase is completed and you have a plan based on benchmarking data, and you have set
specific goals and objectives, then it is time for action. Follow your benchmarking plan but do not forget to
update your customers satisfaction perceptions. The best way is to use surveys.
Maturity phase
How do you know when your benchmarking process has reached maturity? The answer is very simple when
you attained a leadership position and when performance assessment and process change have become
essential, ongoing elements of your business survival management process.