WASHINGTON; July 31, 2006 – Governments at all levels are increasingly using benchmarking tools to improve organizational performance, although most see room for improving their benchmarking capabilities, according to a global study released today by Accenture.
Entitled “Assessment of Benchmarking Within Government,” the study, based on a survey of more than 230 government executives in 10 countries, looked at the extent to which government organizations currently conduct benchmarking, the different benchmarking models used, the results, and plans for future activity. It also assessed leading practices and the benefits of using them.
Benchmarking — which compares the efficiency and effectiveness of a process or processes in one organization to those in other organizations — is often used by private-sector firms to help lower costs while improving the performance of administrative services such as finance, human resources, payroll, procurement/supply chain, and information technology.
One key finding of the study: Governments are increasingly adopting benchmarking as a valuable and critical management tool. More than half (57 percent) of respondents said they view benchmarking as “very important,” with another 40 percent saying it is “somewhat important.” Nearly three-fourths (73 percent) of respondents said they currently conduct benchmarking, and more than two-thirds (69 percent) of those who do not said they were “very likely” or “somewhat likely” to begin doing so.
“Governments around the world are almost uniformly under greater pressure to provide better services at lower costs,” said Mark Howard, global program director for the Finance & Performance Management service line within Accenture’s Government practice. “By integrating benchmarking activities into planning and budgeting processes, governments can often achieve better results from existing funds and resources, providing an opportunity to redirect resources to improve citizen-facing services.”
Although benchmarking is becoming more popular in government, most respondents acknowledged room for improvement, with only 22 percent rating themselves “very effective” in their use of benchmarking. In addition, just 7 percent of respondents said their benchmarking efforts identified best practices, and only 4 percent said these efforts helped them to standardize procedures and systems. In short, governments are finding where there are gaps in their performance, but they are not identifying how to improve their performance.
Further, while more than two-thirds (70 percent) of respondents said they expected to be able to use their benchmarking programs to increase customer satisfaction, only 5 percent said they measured improvements in that area.
When asked why they started benchmarking, the greatest number of respondents — 79 percent — said they did so to achieve improvements in productivity and efficiency. And, by and large, they’ve realized those benefits: 51 percent said they have seen efficiency-related improvements as a result of benchmarking.
Proven Success Factors
To gain insight into what elements of government benchmarking are most effective, Accenture separately examined responses from the 35 respondents who rated their organizations’ programs as “very effective.” Among the findings:
- Twenty-two (22) of these 35 respondents said their organizations had established formal, continuous benchmarking programs, with 15 of those using outside benchmarking contractors to collect and analyze information.
- Twenty-six (26) of the respondents said their organizations conduct external benchmarking, looking to private-sector organizations and/or governments outside their country.
- Eighteen (18) respondents said they have been conducting benchmarking for more than five years, and another seven said they have been conducting benchmarking for between three and five years.
Combining its findings from the survey of government executives with the company’s experience in helping private-sector clients with their benchmarking activities, Accenture has identified several recommendations for ensuring success in a benchmarking program:
- Establish benchmarking as a continuous, formal, ongoing management program and practice, rather than an ad-hoc tool to deal with the ‘issue of the day.’
- Give it time; organizations are resistant to uncovering and analyzing their strengths and weaknesses, so it may take a few years for the benchmark program to be widely accepted.
- Be prepared to engage external help and expertise in benchmarking and analysis of results. Using that external help will also assist with internal politics.
- The most effective benchmarking includes looking at organizations outside of government and in other countries.
As part of a global study on benchmarking in government, Kadence UK Ltd., on behalf of Accenture, conducted telephone interviews in January and February 2006 with 231 government executives in 10 countries: Australia, Canada, France, Germany, Ireland, Italy, Spain, the United Kingdom, South Africa and the United States. Respondents were functional leads/managers representing at least one of four administrative areas: finance, human resources, procurement, and information technology. Respondents also included budgeting/planning managers and general managers/administrators with an overall view of the organization’s operations and reporting frameworks.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 133,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended Aug. 31, 2005. Its home page is www.accenture.com.