Internal Benchmarking: Take a Look in the Mirror
July, 2017
Parking organizations of all types, private and public, often seek to benchmark their Key Performance Indicators (KPIs) against similar organizations, competitors, or institutions considered to be top performers. KPIs may cover topics such as the variety of customer programs offered, parking rates, staffing levels, internal cost ratios and a host of other variables.
But benchmarking against other organizations can be difficult and lengthy, since a basic need is to define similar entities against which to benchmark. Deciding which similarities are most important gets tricky when considering, for instance, the population of a city or university, the number of parking spaces managed, relative debt, rate setting processes, financially self-supporting requirements, size of staff, sources of revenue, and operating expenses. Indeed, the number of variables and reasons for them are daunting when a fair comparison is needed.
Maybe, instead of seeking comparisons with other organizations similar to yours, it’s time to look in the mirror. How about considering Internal Benchmarking?
Why Benchmark Internally?
Juran Benchmarking, part of Juran Global (www.juran.com), a specialized management consulting firm, has been benchmarking in the oil and gas industry for decades. But their methods and expertise in benchmarking for performance improvement are just as applicable to the parking industry.
One of Juran’s experts describes benchmarking in this way:
Benchmarking is the process of improving performance by continuously identifying, understanding, and adapting outstanding practices found inside and outside the organization www.slideshare.net/AMARAYYA/benchmarking-ppt?next_slideshow=1.
So using internal benchmarking can help your organization understand how it is performing, find areas where performance is good and use lessons from those areas, find poorly performing functions and determine how to improve them, and use the information to create part of your strategic plan to significantly improve performance.
Here is a quick example.
Decide that you want to benchmark this year’s KPIs versus last year’s, or several past years. The purpose is to see if your current performance is better or worse than the benchmarked years.
Determine the KPIs you want to examine, and why. Sample KPIs could include the following types of data:
Key Performance Areas | Indicators |
Off-Street Parking | Operating cost per space, surface and garage Operating hours generating revenue in each facility (paid hours as a fraction of total operating hours) Revenue generated per space per facility Revenue generated by different kinds of parking (monthly, visitor, special event, etc.) |
On-Street Parking | Paid hours at parking meters, perhaps by area Violation rate Turnover rate Enforcement officer hours actually on-street Payment by method (cash, credit card, smartphone app, valet) |
Customer Service | Complaints received per month (written, by telephone, referred from someone else) Complaints resolved successfully per month Web-site inquiries Brochures or other material handed out, picked up, or sent |
Stakeholder Interaction | Pro-active meetings held with stakeholder groups Public meetings held with stakeholders as requested Information provided to meet inquiries by stakeholders |
INTERNAL BENCHMARKING (from page 40)
Three Key Benefits of Internal Benchmarking
First, the process of selecting KPIs is a good one in and of itself, as it forces the organization’s management team to decide which variables are worth measuring and are of most importance. Sometimes measuring these variables brings surprises if they are not being examined at regular intervals. Significant changes from year to year should prompt an examination of why the changes occurred, what they indicate about performance, or how the changes should be dealt with going forward.
External benchmarking is certainly valuable, for it helps an organization compare itself with its peers, other high performing operations, or those with best practices.
Second, internal benchmarking should lead to setting standards and beginning a continuous improvement process. The results of the benchmarking should become the base of a strategic plan with concrete activities to improve efficiency, reduce costs, improve revenues, communicate more effectively with customers and stakeholders, and manage functions in better ways.
Third, the internal benchmarking process may identify some functions that are performing very well. Those functions, their processes and their management can become models to emulate within the organization.
Remember: Process is Paramount
The process for internal benchmarking needs to include planning for and identifying the KPIs to measure, collecting and analyzing data, and generating reports that are useful and offer insight on what has occurred and why. Then the process moves to obtaining consensus on the actions that need to be improved, and establishing measurable objectives in a strategic plan for making improvements – with responsibilities and a schedule for making the plan effective.
The Payoff
External benchmarking is certainly valuable, for it helps an organization compare itself with its peers, other high performing operations, or those with best practices. But internal benchmarking can set up an organization to make the most of external benchmarking by determining the important KPIs, how well they are being measured and met now, and which functions of the organization the management team really needs to improve.
Before launching into a complex external benchmarking effort, step back and take a look in the mirror at how your organization has been performing recently. It is guaranteed to improve your ability to be a continuously improving organization.
Barbara J. Chance, Ph.D. is President and CEO of CHANCE Management Advisors, Inc. You can reach her at barbara.chance@chancemanagement.com
www.chancemanagement.com
