Public-Sector Benchmarking: A Practical Approach

Article excerpt

From the city of Houston to the village of South Orange, New Jersey, from Los Angeles County to Virginia's Prince William County, city and other local governments are finding themselves under increasing pressure to improve the quality and the cost-effectiveness of their services. In the face of unprecedented budgetary pressures, uncertain economic conditions, and a challenging array of political obstacles, these difficult-to-obtain improvements will be pursued cost-effectively, or they will not be pursued at all.

Benchmarking within the public sector is, in many ways, the answer to the question of how to achieve these improvements in an efficient manner. Having succeeded tremendously in the private sector for years, benchmarking is gaining ground in the public sector at an unheard-of rate. Simply put, benchmarking is a rigorous yet practical process for measuring your organization's performance and processes against those of best-in-class organizations, both public and private, and then using this analysis to improve services, operations, and cost position dramatically.

Public-sector benchmarking reaches well beyond such tools as internal comparisons and peer group analyses. It is far more than a comparison of like public-sector entities in which the comparison is itself the key output. Public-sector benchmarking necessarily should include entities that, though not directly comparable to your organization in size or mission, can be valuable sources of best practices.

Done incorrectly, benchmarking produces reams of data and little else. But when benchmarking is planned effectively, when it focuses on the right targets, and when its recommendations are implemented and monitored correctly, the results are significant and sustainable. The cost, quality, and efficiency improvements obtained by benchmarking in private industry have been so profound that states, counties, cities, and the federal government--organizations not traditionally known for their speed in planning and implementing change--are opening their eyes to the benefits of this powerful analytical tool.

The results of benchmarking can be dramatic:

* Public works departments, through best-in-class analysis and benchmarking, have been achieving dramatic improvements in the cost-effectiveness of their services and are able, for the first time in years, to compete and win against their private-sector counterparts in the foot race for lucrative city contracts.

* City bus and rail systems are making faster progress than ever before in their efforts to manage materiel, logistics, and inventory more efficiently.

* Public-sector employees at all levels are enjoying soaring morale and productivity as the benchmarking implementation process energizes them and provides them with strong incentives to play a part in the delivery of world-class performance.

Time after time, the lesson of effective benchmarking has been simple: Both the time required to progress down the learning curve and the cost of improvement are greatly reduced when an organization learns from the experiences of others through the proven process of benchmarking.

The great news is that the process of benchmarking is neither complex nor scientific. Benchmarking, in fact, consists of seven common-sense steps. Whether you are benchmarking school transportation costs, elevator repairs, or staff efficiency in information systems, the steps do not change.

Public-Sector Benchmarking in Seven Steps

Benchmarking is not a one-shot exercise. In fact, to succeed, a benchmarking program requires thoughtful planning, careful resource allocation, extensive data collection, rigorous analysis, and detailed follow-up. The entire process can be divided into the seven steps described below.

Step 1. Determine which functional areas within your organization will benefit most from benchmarking. The success of a city, county, or local benchmarking effort depends heavily on initial planning. …