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25thJuly
5 common pitfalls in benchmarking

Benchmarking is widely used by Engineering and Construction firms in order to assess the performance of projects. As a project controller, are you also applying this method or are considering applying it in order to maximize your profit? If so, are you sure that you are doing it right? Here are some common pitfalls you should avoid in order to ensure a successful implementation of benchmarking.

1- Skipping the definition of clear objectives

Most of the time companies neglect an important step which is to define clear and inambiguous objectives and they jump straight into evaluating performance. Without a clear purpose, benchmark analysis fails to meet expectations. Initially you should define why you are performing benchmarking, what you really want to know and based on these, you should decide on the KPIs that are critical for succeeding your goals.

2- Choosing the wrong benchmarks

Choosing benchmarks is a very crucial step of your analysis. It is not recommended to compare your performance with other peers in your sector or with groups/units in your own company just because they perform a similar task. You should use inspiring examples as benchmarks so that they can lead you to excellence, through substantial effort, rather than suffice with average performance. 

3- Benchmarking too many KPIs

“The more, the merrier” is a phrase that do not apply for benchmarking. Avoid choosing KPIs as everything that “would be nice to know”. That will hinder your analysis and will distract your attention from the critical factors. Therefore, choose your KPIs wisely based on your benchmarking analysis. 

4- Ending the benchmark analysis with a variance report

Even though it may seem that the work is done once you have written a report which shows all the variances between your benchmarks and the units/projects of interest, actually this is just the beginning! The aim of benchmarking is not to produce a variance report, but to take action based on that in order to maximize performance and reach the one of the “best in class”. As you can easily understand, planning and implementing are among the biggest challenges.

5- Assuming that numbers and performance stay stable for long periods

Performing internal or competitive benchmarking, you should always have in mind that numbers and performance are constantly changing. If you choose to conduct benchmark analysis only once per year, it is very likely that you are missing important information that would support you in identifying trends soon and react.

 

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