New Research by APQC and IBM Institute for Business Value Estimates the Business Value of Benchmarking Could Exceed $1 Trillion Annually for Fortune 1000
Study coincides with 20 years of Open Standards Benchmarking effort
HOUSTON, Jan. 10, 2023 /PRNewswire/ -- A survey of 2,000 global C-suite executives by APQC and the IBM Institute for Business Value (IBV) finds that, over the past two decades, benchmarking has evolved from a back-office function focused largely on cost control, to a strategic imperative enabling collaboration, innovation, and value creation.
Specifically, surveyed executives attribute the equivalent of nearly 7% of revenues—or approximately $655 million per average organization size of $10 billion—in business value to benchmarking. Extrapolated across U.S. Fortune 1000 companies, the survey results indicate that the business value of benchmarking could exceed $1 trillion.
A research report on the findings can be downloaded from the websites for APQC and the IBM IBV. A recorded webinar discussing the survey results is also available.
Revolutionizing business models with open standards benchmarking
“Nearly 20 years ago, IBM and APQC joined forces, along with 12 other leading organizations, to create the Open Standards Benchmarking ® database for managing, evaluating, and improving business processes,” says Lisa Higgins, CEO of APQC.
“Our goal was to standardize the collection and sharing of frameworks, measures, and benchmarks so that organizations worldwide could evaluate their performance consistently, accurately, and objectively. These survey results indicate that benchmarking has grown in importance and become a key strategic management tool for enhancing business performance, and further, provides an essential foundation for emerging economic structures and market environments.”
In addition to the considerable amount of business value attributed to benchmarking, survey participants indicated:
- Transformation programs are gaining traction.
71% of executives say that benchmarking helps drive organizational transformation, and 68% say benchmarking helps translate more business value from transformation efforts.
- Process mining highlights opportunities to improve.
69% of executives see integrating process mining as an opportunity to enhance and create more value to existing benchmarking.
- Open standards streamline comparison and collaboration.
While 75% of executives say common definitions are essential for accurate benchmarking, 44% say their organizations lack them.
Building the world’s largest database of benchmarks and best practices
Similar to the concept of open-source software, the concept of an open standards benchmarking began 20 years ago with 14 major organizations collaborating to standardize and provide open access to benchmarks, ultimately changing the landscape for all industries.
The effort was led by APQC and an Advisory Council comprised of members from Alvarez & Marsal, Bank of America, Boehringer-Ingerlheim, Booz Allen-Hamilton, CEMEX, Fuji Xerox Co., Ltd., Gartner Inc, IBM, M.D. Anderson Medical Center, P&G Worldwide, PeopleSoft, Raytheon Company, Shell Oil Company, The World Bank, and the U.S. Navy.*
Today, APQC’s Open Standards Benchmarking database contains over 4 million data points across 1,200 standardized measures, spanning all business processes, enterprise types, and industries. It is the world’s largest database of business process practices and validated performance metrics. In the past year alone, organizations have accessed over 600,000 benchmarks on demand. The data, contributed by tens of thousands of organizations since inception, is validated, analyzed, blinded, and published by APQC.
Anthony Marshall, Global Lead for Thought Leadership Research at the IBM Institute for Business Value, shares:
“Ecosystems are increasingly becoming an engine of progress, allowing companies to focus on what they do best as well as gain access to broader ideas and innovation opportunities. APQC’s work driving open standards benchmarking, with its commonly agreed definitions, metrics, and maturity models, is a critical foundation to help ecosystems operate. At IBM, the culture of ‘open’ runs deep, and we look forward to continuing to support open standards and open ecosystems.”
Kelly Souders, Carrier Team One Program Director, U.S. Navy, shares:
“The U.S. Navy has been an advocate and active user of benchmarking for over 25 years, benchmarking works. Since launching, we have used the Open Standards to identify critical drivers in our processes and learn where we are strong and where we have gaps in our capabilities. With benchmarking, we’re able to adapt and duplicate best practices, thus providing faster, greater results and value for our customers.
Benchmarking has provided the strategic insight needed to shift plans and change processes throughout our programs to better connect with our customers. It has impacted how we prioritize and authorize work, how we message and brand our services, and how we build our knowledge repositories. Open Standards Benchmarking provides a strong foundation for the U.S. Navy to improve our business processes and better share knowledge.”
Kris Pederson, Leader of the EY Americas Center for Board Matters and a founder of the Open Standards Collaborative before joining EY, comments:
“Having helped to establish the Open Standards Benchmarking Collaborative, I am excited about the progress – this standardization of business process measures has been a game-changer, giving organizations a trustworthy set of measures against which they can benchmark operational performance. Now, businesses and government agencies have a clear view of how much further they need to move the needle to maximize the efficiency and effectiveness of their operations.”
Sharing insights and refining models
APQC and the IBM IBV surveyed 2,000 C-level executives from 13 countries in all major geographies and across 22 industries to analyze how their organizations use benchmarking and process mining tools, the benefits gained from these tools, and the anticipated uses in the future.
“Over the past twenty years, advancements in technology, from cloud computing to data analytics to artificial intelligence, have made information ever more accessible and insightful,” adds Higgins. “At the same time, business processes have continued to advance. As a result, Open Standards Benchmarking must also evolve to continue delivering value. The survey results highlight this dynamic and provide a roadmap for next-generation leaders who, rather than focusing on transactional processes, will be focused on managing value streams in highly strategics ways.”
The study research report, Boundless Benchmarking: Revolutionizing Business Models with Open Standards, can be downloaded from the websites for APQC and the IBM IBV. A recorded webinar on the survey results may be viewed here.
APQC helps organizations work smarter, faster, and with greater confidence. It is the world’s foremost authority in benchmarking, best practices, process and performance improvement, and knowledge management. APQC’s unique structure as a member-based nonprofit makes it a differentiator in the marketplace. APQC partners with more than 500 member organizations worldwide in all industries. With more than 40 years of experience, APQC remains the world’s leader in transforming organizations. Learn more at www.apqc.org.
*“Business, Agencies to Standardize Their Benchmarks,” The Wall Street Journal, May 19, 2004
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