Our latest blog series will cover the topic of benchmarking in project management. We’ll give you a quick overview of what “benchmarking” is in part 1, and the next two blog posts will delve deeper into the topic by explaining the difference between internal and external benchmarking.
Definition of benchmarking
Benchmarking is used to assess your own organization’s processes and performance compared to your company’s competitors or compared to the best companies in your industry. This method is used in project management to improve the organization’s project management methods and processes, or to compare internal projects to each other to identify what the most successful projects have in common (keyword “lessons learned”).
It’s important to distinguish between internal and external benchmarking. The main objective of internal benchmarking is to improve the success rate of projects within the organization by comparing previous projects with each other. The goal of external benchmarking is to identify and improve the organization’s competitive advantage by comparing your organization’s performance with the performance of industry leaders.
Basic approach and objectives
Benchmarking involves a continuous comparison of processes and methods. The goal is to identify the best and most efficient company or project, in order to optimize your own organization or projects accordingly. The first step is to identify the differences between the organizations and projects. The next step is to identify the reasons for these differences and to identify possibilities for improvement. This will help you find projects that are considered best practice examples which you can use as templates for future projects.
Benchmarking in project management
Benchmarking isn’t used widely in project management and you will have a hard time finding current data and information on the topic, but it’s worth it to keep this method in mind. Other industries, such as product management or brand communications, are already generating more value thanks to benchmarking. Benchmarking also helps you get a detailed report of your company’s position compared to your competitors. The benchmarking information enables you to improve your project management and gain a competitive advantage.
Benchmarking in project management often focuses on project effectiveness, i.e. whether a project was completed on time, within budget and within scope. But besides project effectiveness, it’s advisable to also look a project management maturity and process maturity and process effectiveness (Source). In one of the rare whitepapers found on this topic, published by the PMI, these ten metrics for effective benchmarking in project management were identified:
- Project cost
- Project schedule performance
- Return on Investment (ROI)
- Project cycle time
- Post-project reviews
- Risk management
- Alignment to strategic business goals
- Customer satisfaction