Analytics portfolio

Benchmarking systems

The use of benchmarking systems to monitor and improve performance metrics is often hampered by a lack of real comparability due to external factors. This can be remedied by creating models for the benchmark that take into account these external factors.

Analysis of the raw metric

Performance metrics like realised prices, resources spent on a customer, revenue per sales area, can vary hugely. Possible performance issues are clouded by external factors:

  • Prices vary due to product type and added services
  • Cost of delivered services vary due to client size
  • Sales areas have varying customer structure, etc.

Determine influencing factors and model baseline

Create a list of the main product features and differentiating attributes, e.g.

  • Product quality
  • Service level agreements
  • Delivery and payment terms
  • Volume and rebate agreements
Build a model to measure the influence of each factor on the performance metric (e.g. the realised price)

Establish fixed benchmark

A fixed baseline and acceptability-corridor, based on the agreed influencing factors, is then established. Performance levels are now tracked against this new fair benchmark.

Individual performance sheets

The responsible managers are provided with regular reports about the performance of their area against the benchmarks.

Boris Vaillant - Quantitative Consulting 17

QC 17