Benchmarking is a powerful tool of project controls, which aims to improve project performance through a systematic approach. The last years it has gained a lot of attention in the Engineering and Construction (E&C) Industry since competition between E&C firms is constantly rising.
Nevertheless, ambiguity regarding the process can lead to failed implementations and disappointing results. Therefore, we prepared a guideline for you, which describes the benchmarking process including key factors for successful implementations.
The benchmarking process for construction projects
To begin with, before performing benchmarking, we advise you to run a pilot test so that you can ensure that the process defined actually works. It is also important to highlight that regardless of the process, willingness to change and adjust your working procedures according to the benchmarking findings is a key factor for effective implementation.
The steps that can be included in the benchmarking process for construction projects are illustrated in Figure 1 .
Step 1: Define the Process
It is important to define the benchmarks that will be considered in the analysis with clarity. As ‘benchmarks’ we call the reference points from which measurements will be made. ‘Clarity’ is also required regarding the Key Performance Indicators (KPIs) that will be used. These constitute the ‘metrics’ that will serve the needs of measuring projects performance (i.e. the factors that are critical and need to be monitored and measured). Understanding the fundamental objectives of the organization and aligning them with the benchmarking process is of utmost importance. Otherwise, it is most likely that the produced results will not have any useful input for improving the performance of your projects.
Step 2: Collect Data
The second step includes collecting and storing data appropriately. This is a key step for the final results since the quality of any analysis conducted later is directly related to the quality of the data available. At this point, it is important to mention, that this step should always follow the step of deciding which KPIs to use. That is because you can easily fall in the trap of assessing only what you can measure instead of assessing the critical factors for success in your construction projects.
Step 3: Conduct Analysis
Data analysis and comparison with the benchmarks follow. In these steps, the measured performance is assessed and compared with the performance of the benchmarks. It is crucial to set realistic targets that can be achieved.
Step 4: Take Action
This step reflects the quality of the work conducted throughout the previous steps and aims to fulfil the ultimate goal of benchmarking, which is to improve performance. To achieve that, identifying current performance gaps and developing improvement plans is required. It is important to highlight that proper implementation of these plans is a key factor for successful benchmarking.
Step 5: Repeat
Last but not least, repeating the process, while incorporating all lessons learned from previous implementations, is necessary if you truly wish to benefit from benchmarking and achieve the desired results.
Repetition is not only required to highlight mistakes in the way you conducted the whole process but also to keep the process valid through the passage of time. For example, if the priorities of your organization change, that should be reflected on the KPIs.
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