Title - Benchmarking Techniques and its Application at Organizations (A Case study of Dell India)

Title - Benchmarking Techniques and its Application at Organizations (A Case study of Dell India)

Introduction and Importance of the Study

Introduction to Benchmarking

“Benchmarking” is the continuous activity of identifying, understanding and adapting best practice and processes that will lead to superior performance. Benchmarking measures an organisation’s products, services and processes, to establish targets, priorities and improvements, leading to competitive advantage and/or cost reductions Camp, 1989.

It is important to appreciate the difference between external comparisons, where just data is collected, and benchmarking as described here, where the drivers of the performance are identified.

The benefits of conducting a benchmarking exercise can include:

•      Creating a better understanding of the current position

•      Increasing awareness of changing customer needs

•      Encouraging innovation

•      Developing realistic, stretching goals

•      Establishing realistic action plans

There are four basic types of benchmarking:

•      Internal - a comparison of internal operations and processes

•      Competitive - specific competitor to competitor comparisons for a product or function

•      Functional - comparisons of similar functions within the same broad industry, or to industry leaders

•      Generic - comparisons of business processes or functions that are very similar, irrelevant of the industry

Importance of Benchmarking for Organizations

Benchmarking is a continuous process of comparison, projection and implementation. It involves comparing your organization with others, discovering and projecting best trends in practices, and meeting and exceeding the expectations of those watching you (Robert, 1994). Done correctly, benchmarking will help you to learn from the experiences of others, and it will show you how you are performing in comparison to the best. It will identify your strengths and weaknesses, and help you to prioritize your improvement activities. If systematically applied to your operations, the data obtained from benchmarking will also provide you with a corrective action plan. In other words, the data can be used to find where your organization excels and where the problems are that need to be fixed. Benchmarking allows you to set standards, and then to continuously measure performance based on a reference point (Kaiser Associates, 1988).

Introduction of Dell

Dell is a US based computer hardware sales and service company. The company was established in the early 80's and in the last three decades, the company has developed into one of the prevalent Multi National Corporations (MNCs) functioning in more than 180 countries with around 10 manufacturing units that are spread in 7 continents. Subsequent segment implicated the sales of Dell personal computers, laptops and servers in India which were exported from their China. In 2010, the company took a big step to institute their individual manufacturing provision in India to organize and supply the increasing demand of its products in India. In 2011, the company placed itself in the first rank of the Indian market by overtaking other ruling companies like Compaq and HP (Dell, 2012).

Benchmarking Process at Dell India

Dell uses benchmarks throughout the technology assessment and systems development process to help ensure that Dell server and client systems provide the appropriate balance of performance, features, cost, quality, and reliability. Dell supports industry efforts to standardize performance benchmarks and is an active participant in all the standards bodies discussed in this article. When used appropriately, benchmarks can provide valuable information that can help administrators compare and evaluate computer systems. In addition to benchmarks, many factors should weigh heavily in the evaluation process, including features, support, and price, as well as the ability to service, upgrade, and manage the system under consideration Dell is committed to furthering industry practices that yield objective industry-standard benchmark results. Organizations can use these benchmarks to evaluate and compare Dell™ systems to competitors’ systems. Dell also uses the benchmarks when developing new products and assessing new technologies (CEN, 2011).

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The Dell benchmark philosophy is based on three tenets:

•      Benchmark HRM processes like Hr-policies, Compensation & benefits, Recruitment processes and Retention in a way that closely resembles how organizations use applications on Dell systems

•      Ensure that anyone can reproduce results with a system shipped directly from Dell, using publicly available drivers

•      Promote benchmark and run-rule changes that reflect this approach to benchmarking.

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