Benchmarking

Benchmarking is defined as a technique for identifying best practice in a specified key business process, in order to improve performance. It involves selection of key processes critical to success, measurement of performance in those processes, and comparison of performance against other organisations in order to discover the comparative level of performance (CEM, 2007).

In the context of asset management, the purpose of such comparison is in finding and implementing better practice and performance wherever it is found. Due to the uniqueness of every local authority organisation, it is important that local authorities should not copy asset management approaches. A local authority should, instead, seek to understand what makes asset management arrangements in other organisations ‚better‛ than it in terms of service delivery impact or in carrying out specific asset management activities. Such an approach enables the local authority organisation to assess how to improve its own asset management performance so that it could also provide best practice service.

In order for a local authority to be able to assess improvement of its own asset management performance it requires that benchmarking does not operate as a once and for all activity. Instead, it should form part of the programme of continuous improvement with the aim of increasing efficiency and effectiveness. A programme of continuous improvement involves comparing and challenging existing asset management performance levels, practices and methods of carrying out activities and their impact on service delivery (Accounts

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Commission for Scotland, 1999). According to Accounts Commission for Scotland (1999) practices and processes of activities, such as asset management, are commonly benchmarked through data benchmarking and process benchmarking respectively.

5.3.3.1 Data / Metrics (KPIs) Benchmarking

Data benchmarking involves numerical comparison of performance in key areas such as

cost, quality, office space per employee, and service user satisfaction against some benchmark (CIPFA, 2014). The benchmark is a standard target or a key performance indicator (KPI). In the local authority, data benchmarking is often based on published performance indicators prepared by a benchmarking body or club. This could be a group of local authorities for instance or a professional body.

While a number of benchmarking schemes exist, in practice, numerical comparison of performance for English and Scottish local authorities are based on two sets of indicators. The indicators are those prepared by Audit Scotland / FPS Scotland Performance and ones by National Property Performance Management Initiative (NAPPMI) (CIPFA, 2014). The National Property Performance Management Initiative (NaPPMI) is made up of representatives from Association of Chief Estates Surveyors (ACES) in local authorities, Consortium of Local Authorities in Wales (CLAW), Core Cities, Association of Chief Corporate Property Officers (COPROP) in local authorities, Chartered Institute of Public Finance and Accounts (CIPFA), Federation of Property Services (FPS). NaPPMI indicators were first published in 2005/06 and these were endorsed by all the participating organisations and Central Government in the form of Department for Education and Science (DfES) and Department for Communities and Local Government (DCLG) (formerly Office of Deputy Prime Minister abbreviated ODPM). The developed numerical indicators cover the areas of: Condition; Environmental; Suitability; Accessibility; Sufficiency; Spend; and Time and Cost. The National Property Performance Management Initiative (NaPPMI) Performance Indicators are now accepted as 'industry standard' for Asset Management in both England and Wales.

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The Federation of Property Societies (FPS) Scotland / Audit Scotland indicators were developed as the basis of benchmarking property performance in Scotland. The indicators cover the areas of: Suitability; Sufficiency; Spend; Sustainability (environmental, accessibility); and Stock (condition; cost; time). The Federation of Property Societies (FPS) Scotland comprises property representatives of 28 of the 32 Scottish councils.

Apart from terminology, both sets of indicators, NAPPMI and FPS/Audit Scotland indicators, are for all practical purposes the same. The only difference is how the indicators are described. For instance FPS/Audit Scotland indicators have environmental and accessibility grouped under Sustainability while NAPPMI indicators show these separately. Similarly NAPPMI show property condition separately from Time and Cost. On the other hand, FPS/Audit Scotland indicators group these under Stock. For the purposes of this study both the NAPPMI indicators and those by FPS/Audit Scotland measures along with those others suggested by literature were distilled to come up with numerical measures. The adopted numerical indicators included maintenance, operating cost, sufficiency, suitability, and accessibility. Numerical indicators, however, only deal with asset performance outcomes and not asset management processes nor asset management capability shortfalls. As stated by Audit Commission for Scotland (1999), data benchmarking is useful in comparing performance with other local authorities. It can be particularly helpful as a diagnostic tool to highlight areas where the organisation appears to do better or worse than others. Data benchmarks are just the start of benchmarking for performance improvement. While the data will help to identify performance gaps, they do not in themselves help identify the causes of differences in performance or indicate how to improve performance.

5.3.3.2 Process Benchmarking (CSFs)

Process benchmarking involves the comparison and measurement of a specific asset management process against a similar process in another local authority organisation. The purpose behind this is to help decide how a particular local authority’s asset management processes might be improved. Process benchmarking involves developing a detailed

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understanding of how a particular, specified process is completed and comparing what is done, how it is done, and what performance levels are achieved in that process with another local authority. Again, the purpose of process benchmarking is to see, by learning from others, how a particular local authority can improve their own processes (Audit Commission for Scotland, 1999).

The identified and defined asset management processes and how these are expected to be executed was highlighted in Table 4.2. Process benchmarking for this study, therefore, involved comparing how local authorities carried out asset management processes associated with strategic planning and asset management planning and the extent to which they were successfully undertaken. There was therefore inter-local authority comparison of asset management processes as well as comparison with the ideal as suggested by literature review.

5.4 DESCRIPTION OF THE DEVELOPED CONCEPTUAL