Governments Turn to Benchmarking for Back-Office Processes

Governments are turning to private sector techniques -- namely benchmarking -- to ensure that their back-office processes meet industry performance standards, according to a new study by Accenture. The resulting savings are, at least in theory, being applied to constituent-facing processes.

"We know of a few organizations that realized savings in the first year or two since they began benchmarking," Mark Howard, global program director for the finance and performance management service line within Accenture's government practice, told CRM Buyer.

"One individual quoted to us a savings of (US)$20 million that they could redirect to services," he noted.

For the study, "Assessment of Benchmarking Within Government," researchers surveyed more than 230 government executives in 10 countries, investigating the extent to which government organizations currently conduct benchmarking, the different models used, the results, and plans for future activity.

Their findings verified that governments are increasingly adopting benchmarking as a management tool. Fifty-seven percent of respondents said they viewed it as "very important," with another 40 percent saying it was "somewhat important." Seventy-three percent of respondents said they currently conducted benchmarking, while 69 percent of those who did not said they were "very likely" or "somewhat likely" to begin doing so.

Informally Applied

To be sure, governments have been using benchmarking as a process improvement tool for at least a few years, especially for activities that impact constituents. Most of the time, however, these benchmarking programs have been informally applied -- usually consisting of calls to nearby agencies to get comparable metrics for a particular process or division.

That is changing as government agencies start to apply benchmarking to internal processes, Howard said. In the latest survey, respondents were evenly split as to whether they used benchmarking as a formal tool or as a one-off technique on an informal basis.

"Some organizations are even forming benchmarking units that can apply a certain discipline or organizational style to the process," Howard noted.

However, those organizations appear to be in the minority.

Gaps in Application

Accenture identified gaps in performance among the agencies it surveyed. It found, for instance, that most respondents acknowledged there was room for improvement, with only 22 percent rating themselves "very effective" in their use of benchmarking.

Just 7 percent of respondents said their benchmarking efforts identified best practices, and only 4 percent said their efforts helped them to standardize procedures and systems.

Most telling -- at least for customer service advocates -- is that while more than two-thirds -- 70 percent -- of respondents said they expected to be able to use their benchmarking programs to increase customer satisfaction, a mere 5 percent said they measured improvements in that area.

At the conclusion of its report, Accenture makes several recommendations for ensuring success in a benchmarking program:

• Establish benchmarking as a formal, ongoing management 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.