Benchmarking is important to compare performance and review efficiency; it enables comparisons to be drawn between you and similar organisations. Using benchmarking to drill into the strengths and weaknesses of your organisation enables smarter decision making, improved efficiency and enhances lean processes by reducing anything that is not adding value.
Within the social housing sector, competitive advantage is not the key driving force; however, the intelligence gathered from benchmarking should be used to identify gaps in processes where the organisation is not performing as well as its peers (for example, comparing large, southern-based G15 organisations with small northern housing providers wouldn’t give an appropriate comparison as they wouldn’t be facing the same challenges).
To effectively benchmark, regardless of metrics, the organisations you are comparing your results with should have similar characteristics: a similar number of units, region, rent prices, and so on to ensure a fair comparison.
Before 2015, entities regulated by the HCA had to demonstrate efficiency and found their benchmarking club reports very handy for this purpose. In the absence of that requirement, these practices should not be neglected, as significant insights can be gained from these reports and efficiency should always be a key objective for housing organisations.
The key benefits from benchmarking include:
- Self-assess performance;
- Identify opportunities to develop and adopt best practice;
- Review potential reasons for differences in performance within your peer group;
- Drive investigations into new processes to improve efficiency;
- Set new standards;
- Provide evidence for implementing strategic change.
The club must compare you with similar organisations that have similar development programmes because the conclusions drawn from the comparison will be used to give insight into business intelligence.
When making your choice, consider the method of data collection and input as some clubs offer online integrated solutions to remove some of the manual tasks, saving you time and reducing the risk of human error.
There is always the challenge of getting up-to-date data; you have to enter the data to be able to create reports, and there needs to be enough of the relevant information submitted to get a valid benchmark.
To reduce anomalies, most benchmarking clubs offer some form of data validation; without this, any human errors or unusual numbers can dramatically alter the results, creating unreliable data which can’t be used to benchmark. The data would be submitted and checked by a validator for any irregularities; once these are resolved, this is marked as validated and becomes part of the benchmark. The more data submitted, the more reliable and credible the benchmark.
Finally, the delivery of all this information needs to be in a usable format. These reports often end up in the boardroom, so all data should be relevant and easily understood without any additional leg work from you.
Remember, it’s in your organisation’s best interest to be efficient, enable growth and sustainability, all of which can be maintained and improved through benchmarking.
Phil Shelton is CEO of SDS.