A benchmarking method for business-process reengineering and improvement

Benchmarking assists businesses in identifying potential targets for improvement. It is the initial step a firm must undertake before planning and implementing reengineering methods to achieve higher productivity. Although several benchmarking methods have been proposed in the literature, research in this area lacks rigorous analytical tools for effective benchmarking. A benchmarking method must simultaneously analyze and integrate several key performance measures of business processes in identifying best practices. This is easier said than done because it is by no means a trivial task to blend multidimensional information in a useful and effective manner. This article proposes a benchmarking method that simultaneously considers multiple measures and aids in business process reengineering efforts of organizations. The proposed technique is based on a combination of multifactor productivity analysis, game theory, and clustering methods. These models are tested on a previously reported data set of manufacturing processes. Our results provide some very interesting insights into benchmarking practices, which when followed by firms will help in successful business process reengineering efforts.