Benchmarking promotes learning, sharing, and best practices to improve performance

The 2004 Water Conservation Survey conducted by the Ministry of Water, Land and Air Protection and the BCWWA’s Water Sustainability Committee showed that only 18 percent of utilities are using benchmarking, while 21 percent are considering it.

What is benchmarking?

There are many definitions of benchmarking, but most include learning, information sharing, and adopting best practices to improve performance.

The European Benchmarking Code of Conduct, for example, notes “Benchmarking is simply about making comparisons with other organizations and then learning the lessons that those comparisons throw up.” The Xerox Corporation says, “Benchmarking is the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized as industry leaders (best in class).”

As noted by the UK Public Sector Benchmarking Service (PSBS), “the case for benchmarking is a compelling one. When used appropriately, it has proved to be one of the most effective tools for bringing about quantum leaps in performance.” More specifically, “benchmarking provides:

  • an effective ‘wake-up call’ and helps to make a strong case for change;
  • practical ways in which step changes in performance can be achieved by learning from others who had already undertaken comparable changes;
  • the impetus for seeking new ways of doing things and promotes a culture that is receptive to fresh approaches and ideas; and
  • opportunities for staff to learn new skills and be involved in the transformation process from the outset.”

What steps are typically taken in benchmarking?

In practice, benchmarking usually:

  • compares performance (functions or processes) with best practitioners;
  • identifies gaps in performance;
  • seeks new ways to enable and promote improvements in performance;
  • implements improvements; and
  • monitors progress and reviews benefits.

What types of benchmarking are used?

  1. According to the PSBS, Strategic Benchmarking “is used where organizations seek to improve their overall performance by examining the long-term strategies and general approaches that have enabled high-performers to succeed.”
  2. Performance Benchmarking or Competitive Benchmarking “is used where organizations consider their positions in relation to performance characteristics of key products and services.”
  3. Process Benchmarking “is used when the focus is on improving specific critical processes and operations. Benchmarking partners are sought from best practice organizations that perform similar work or deliver similar services.”
  4. Functional Benchmarking or Generic Benchmarking “is used when organizations look to benchmark with partners drawn from different sectors or areas of activity to find ways of improving similar functions or work processes.”
  5. Internal Benchmarking “involves seeking partners from within the same organization, for example, from business units located in different areas.”
  6. External Benchmarking “involves seeking outside organizations that are known to be best in class.”
  7. International Benchmarking “is used where partners are sought from other countries because best practitioners are located elsewhere in the world and/or there are too few benchmarking partners within the same country to produce valid results.”

When choosing the type of benchmarking you’d like to employ, first consider:

  • objectives to be achieved and aspects to be reviewed;
  • time and resources available;
  • level of experience in benchmarking; and
  • likely sources of good practice.

PSBS notes that “Organizations starting out with benchmarking often opt for internal benchmarking first to build up experience of the benchmarking process before attempting external or functional benchmarking…Organizations also progress through the various types of benchmarking, for example, using Performance or Competitive Benchmarking to highlight gaps in overall performance before deploying Process Benchmarking to bring about improvements in key process that will, in turn, impact on overall performance.”

Success Factors

The PSBS recommends that, “Regardless of the type and scope of benchmarking you choose, it will be important to ensure that:

  • senior managers support benchmarking and are committed to continuous improvements;
  • objectives are clearly defined at the outset;
  • the scope of work is appropriate in light of the objectives, resources, time available, and the experience level of those involved;
  • sufficient resources are available to complete projects within the required time;
  • benchmarking teams have a clear picture of their organization’s performance before approaching others for comparisons;
  • benchmarking teams have the right skills and competencies and have access to training, advice and guidance over the course of projects;
  • stakeholders, particularly staff and their representatives, are kept informed of the reasons for benchmarking and the progress made throughout the course of projects. Where practical, staff should be involved in undertaking benchmarking to make the most of the opportunities for learning from others; and
  • the development of recommendations is an inclusive process and that proposed improvements are realistic in the context of local circumstances and other initiatives.”

What Pitfalls Should be Avoided?

When benchmarking for the first time, it is important to learn from others’ successes and failures. In general, the PSBS says it’s important to avoid:

  • benchmarking for the sake of it;
  • focusing entirely on comparisons of performance measures rather than the processes and activities that enable the achievement of good practice;
  • expecting that benchmarking will be quick or easy;
  • spending too long on one part of the process at the expense of other key parts, particularly, obtaining support for your recommendations;
  • expecting to find benchmarking partners comparable in all respects to your organization; and
  • asking for information and data without being prepared to share it with others. Conversely, expecting organizations to share information that is commercially sensitive. Agreeing to abide by an approved benchmarking code of conduct can help avoid problems over confidentiality of information.

For more information visit the PSBS website at National Water and Wastewater Benchmarking Initiative

More than 35 Canadian cities and regional organizations are participating in an ongoing benchmarking initiative led by Earth Tech and supported by the National Research Council of Canada’s IRAP program. This partnership, which represents about 50 percent of Canadian utilities from coast to coast with a service population of greater than 50,000, has grown to the point where it serves as the national standard for water and wastewater utility benchmarking in Canada.

 The project was developed in response to utility managers’ need to address such questions as:

  • How well are we doing?
  • How do we compare with similar organizations?
  • Are we getting value for our money?
  • How can our utility begin the process of continuous improvement?

The resulting quantitative measures, combined with the shared experience and networking between the participants, provides a significant resource of information from which improvements in operations can be identified and implemented.

For more information about the initiative, visit