Join the SM Benchmark Study Why you should benchmark your business As Service Management launches the UK’s first Benchmarking Research project for small to medium-sized service enterprises, Steve Downton examines the role of benchmarking and how it can be used to improve performance and what makes this study unique Matching the right skill sets to business needs at an acceptable cost has become a major challenge. It is one that puts considerable pressure on the bottom line, as the desired double-digit growth-rates for many service providers have stalled. Without a relationship to company strategy, independent tactical decisions that influence service operations are at risk of conflicting with the goals of the company. The most effective way of achieving a link between high-level strategic objectives and operational actions is through the use of a balanced business scorecard (BBS). One key aspect of a balanced scorecard is regular benchmarking against the overall industry. Benchmarking is a tool that can help improve business processes. It is the process of identifying, understanding and adapting outstanding practices from organisations anywhere in the world to help your organisation improve its performance, and any business process can be benchmarked. Benchmarking is now a highly respected practice in the business world. It is an activity that looks outward to find best practice and high performance and then measures actual business operations against those goals. One of the biggest mistakes people make when beginning their benchmarking endeavour is that they only look to benchmark an operation within their own industry. Although this may be beneficial, you probably already know enough about your industry to know what works and what doesn't. Worse yet, some people think they must benchmark their competitor – but what if the competition is no good? Service Management has commissioned a benchmark of its readership across the UK to gain an understanding of how small and medium enterprises (SMEs) are responding to the changing environment, focused on understanding fully the drivers behind movement (up and down) of business results. Without specific knowledge of these drivers and how they affect the business, your organisation might just spend much time, money and effort and achieve very little. These drivers fall into four categories: Financial Perspective: this includes the revenue and productivity strategy and attention on growth and profit within the service operations. Customer Value Perspective: this includes acquisition costs, quality, time, functionality, service and relationships. Internal Perspective: this includes innovation processes, customer management processes and operational processes. Workforce Learning and Growth Perspective: this includes service competencies, strategic technologies, and assessment of the climate for action. This benchmark study will look at measures based on these four drivers using a balanced scorecard approach which will facilitate the relevance and use in your business and have the added benefit of tying strategy to measures and to actions, by measuring total business success or a department’s success, balancing long-term and short-term actions and different measures of success. The advantage of reviewing what other companies are doing is that it keeps the business up to date with what others are measuring and why. The balanced scorecard reflects the changing service environment by not only considering measures such as profitability, gross revenues, return on capital (ROC), etc. which are all critical bottom-line results that companies must deliver to survive, but are also considered lagging indicators. The balanced scorecard also considers a more comprehensive view, with an equal emphasis on outcome measures that will tell us how well the company is doing now customer satisfaction, growth and retention are valid current indicators of company performance. It also provides information on internal operations (efficiency, speed, reducing fire-fighting and non-value-added work), field operations (productivity, jobs per day per engineer) and human resource systems and development which are leading indicators of company performance. The study will be web-based and designed to be a brief process, targeted at determining those measures used by companies to drive their business to increase satisfaction levels without increasing costs. As outlined above, this benchmark is intended specifically for SMEs and will consider the issues that are most relevant to that environment. Most benchmarks seem to focus on larger companies and tend to provide only a partially relevant comparison, as there are many issues and challenges facing SMEs that are more relevant to them than larger companies and vice versa, such as rapid growth, shift away from bespoke systems technology and people development. Therefore, the questions and measures will consider those areas that have been proven to be the drivers in the changing SME environment – some familiar, some not. In the past, benchmarking reports have been very expensive and have not included individual information that can be rationalised against data from all participants. They have also tended to use questions that have not reflected the rapidly changing environment of the SME service environment. As a result, interpreting and reconciling the data has proven difficult. This benchmark aims to provide the participants with usable information and insight into what measures are really relevant in today’s changing environment, specifically applied to an individual SME business in the UK, which is wholly standalone or connected to a separate operation in Europe. How do I join the Service Management benchmarking research study?