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Getting Back to Basics Through Benchmarking and KPI Analysis by Terry Wireman, CPMM, Vice President, Vesta Partners, LLC

Many companies today use the terms Benchmark and Key Performance Indicator (KPI) interchangeably; however, they are not the same.  Many companies often mistake “Best Practice Benchmarks” as an end goal that if reached, means their business process is satisfactory or even excellent.  In reality, once a company identifies an opportunity for improvement, they must then set initial targets for advancement through proper benchmarking.  Then more specific performance indicators can be developed for charting the course between the present level of performance (as-is) and the desired benchmark level (to-be).

As progress is made, the performance indicators track such improvement.  Once the benchmark is realized, the continuous improvement process dictates that such benchmarks and subsequent performance indicators should be revisited.  This is done through an internal audit conducted around the entire process and the progress made in attaining the initial benchmark level.  Once completed, the performance indicators are changed and/or modified to track the progress toward meeting and exceeding a new benchmark goal.