AUTHOR: Craig Stanley
Imagine you’re in a high-speed, endurance auto race with a heated field of competitors and the only dashboard instrument you have is your fuel gauge. You can tell how fast you’re burning up your resources, but you have no other instrumentation to tell where you are or how fast you’re going. Furthermore, all of the windows are blacked out so you can’t see anything outside your vehicle. You may have a folding map that you bought from some roadmap vendor, but without being able to locate where you are on the map, it’s not very useful. You can hear the sounds of competition around you but can you really discern if the competition is close or is it just a lot of noise from farther away?
This doesn’t sound like a very effective way to compete in a race does it? But in reality, this is how a lot of businesses operate every day. And in this article, we’ll take a look at benchmarking from an IT perspective.
Benchmarking provides the tools to help you measure and understand where you are at present and how you compare to your competition. Having this information enables the IT organization to measure internal progress, get insight into what peers are doing and where they are, compare speed of technology progress with peers and develop a baseline for comparing costs of technology and operation. Benchmarking methodologies define the KPIs (Key Performance Metrics) that matter most and give the organization the ability to compare these KPIs to their competition.
In the metaphor of an auto race, let’s look at the competitive advantage and benefits derived from benchmarking. In navigating the competitive field, you’re going to need some tools.
Effective tools for navigation:
- Plan (Roadmap) – You need a roadmap of where you’re trying to go, what you want to accomplish and how soon you want it accomplished. Benchmarking helps you measure your progress in attaining your destination as laid out in your roadmap. It provides a “You Are Here” point along the path.
- Speed (Speedometer) – How fast are we going and are we going fast enough to reach our targeted goals? Continuing the race analogy, if you go too slow, you will be passed up by your faster and more aggressive competition. But if you go too fast, you run the risk of losing control and ending up somewhere entirely unexpected. Benchmarking helps you understand how fast the field is moving and gives you insight into your position as a leader or laggard in technology.
- Perspective (Front and rear windows) – You need to be able to see where you’re headed and where you’ve been. The organization has made investments in technology improvement and it is essential in these times of limited capital to be able to look back, see what benefits have been realized and perhaps more importantly, what expected benefits were not realized and why. Benchmarking helps establish that stick in the ground to know where you are so that progress may be quantitatively measured.
- Position (Side Windows) – In order to make good tactical and strategic decisions about your plan, you need to be able to see who is around you, how fast are they moving and if they heading in the same direction that you are. If they are moving faster than you, you are either playing a losing game of catch-up or your advantage is diminishing. Maybe a competitor is heading in a different direction than the pack. Are they lost or are they changing the game? Benchmarking provides an empirical basis for comparing you to your competition, but it also reveals insight into the technology maturity and progress of the peer group itself. Often organizations find themselves scoring at the top of the peer group for a particular KPI, but when the peer group is analyzed, it may be that the group itself is not mature or underperforming. These can indicate opportunities to seize a lead.
- Performance Improvement and Agility (Acceleration) – When good drivers see an opening, they move fast and with purpose. After KPIs are measured and compared, the next steps are to identify the low hanging fruit that usually drives the greatest benefit in the least amount of time. Progress can be accomplished quickly and validates the benchmarking process.
- Direction (Steering) – The best drivers look for the inside turns to maintain position and overtake the competition. Benchmarking identifies areas where the organization is performing well against competitors, but also identifies opportunities for improvement.
- Holistic Analysis (Driver) – Drivers take all of the information available to them and use it to make tactical decisions leading to their strategy of winning the race. In the same manner, benchmarking helps IT make decisions with a holistic view of all KPIs analyzed together and in conjunction with competitive results. The simultaneous analysis of KPIs often leads to insight not visible in standalone metrics.
In the race for competitive position, the IT organization must take advantage of every opportunity to meet the corporate directives of doing even more, faster, with less. The more information IT has about the usage, innovation and maturity of technology, the better enabled it will be to move from simply providing technology on demand to becoming seen as a true business enabler.
Craig Stanley is the Benchmarking Practice Lead for the VMware Vision Team.