Benefits from Benchmarking

Because benchmarking is so closely linked to Business Excellence, many of the benefits attributed to one can also be attributed to the other. For organisations to reach performance levels judged as "world-class" the various business excellence models indicate clearly, through their scoring systems, the importance of benchmarks and the process of benchmarking. Czarnecki through considering the Baldrige scoring table concluded that over half the points available were related to benchmarking activities.

There are many case studies focusing on the success gained through benchmarking alone in organisations. The best known of these are perhaps the experiences at Xerox and Chrysler. In the late 70’s and early 80’s where, faced with ruin due to more efficient Japanese competitors, benchmarking turned the giant Xerox organisation around and put it back at the top of the market. At Chrysler Corporation the benchmarking of Japanese new product development techniques prior to the development of the Viper sports car is credited with saving three billion dollars from development costs and one year of development time.

A study by APQC's International Benchmarking Clearinghouse of Fortune 500 companies, found some compelling figures relating to first year payback from benchmarking projects. Within organisations of 'average' benchmarking experience an average of $76 million payback was reported by more than 30 of these companies for their most successful benchmarking project, and from 'more experienced' organisations this figure was a staggering $189.4 million. Even among developing organisations this study found average first year payback levels from the most successful benchmarking project at $370,000.