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GETTING STARTED
Two important actions are required to begin customer-driven
benchmarking. The first is to establish the internal benchmarking
team. The second is to explore related management processes
within the agency that affect performance measurement.
Internal Team
To begin, establish the internal team that will be responsible for
implementing customer-driven benchmarking. This team will do
all that is necessary to establish the agreements, processes, and
procedures for customer-driven benchmarking and to inform
and support the line organization regarding what is going on.
This team may be a task force that will operate under the
direction and management of the senior maintenance leader or
may consist of several people who already report to the senior
maintenance leader. In either case, recognize that this team will
be functioning as long as the agency is involved in customer-
driven benchmarking.
This team must include the most senior maintenance leadership,
other maintenance and systems staff, and, if necessary,
consultants. Collectively this team requires background and
experience in the following:
Defining maintenance practices and managing
maintenance work (i.e., the team requires an expert who
has credibility with field managers);
Designing, administering, and interpreting costumer
surveys and related consumer research;
Collecting and utilizing data for performance
measurement;
Inputting, manipulating, and extracting data from the
maintenance and related asset management systems;
Inputting, manipulating, and extracting data from the
financial management system;
Setting performance targets, budgeting, and allocating
resources to field organizations; and
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Chapter 1: Introduction to Benchmarking
Training superintendents, crew leaders, and equipment
operators.
One person may provide several of these capabilities. This team
will work across internal maintenance suborganizations such as
districts, counties, areas, and garages. The team will also be the
primary coordinating body with partner agencies.
Related Management Processes
A typical organization, whether public or private, has many
related management processes and systems that seek to achieve
some of the same goals as customer-driven benchmarking. It is
important to be aware of these related management processes, to
use relevant data and performance measures from these
processes, and to coordinate with them.
The following management processes related to benchmarking
are found in many organizations:
Asset management,
Outsourcing,
Performance-based planning, and
Public reporting in conformance with the Governmental
Accounting Standards Board (GASB).
Asset Management
With the completion of the Interstate Highway System and the
enactment of the Intermodal Surface Transportation Efficiency
Act in the early 1990s, national policy regarding roads turned
decisively in the direction of preserving the existing investment
and making the best use of existing highway capacity. By the end
of the 1990s, the thrust to preserve existing investment was
folded into the idea of "asset management." Asset management
is a systematic process of maintaining, upgrading, and operating
physical assets cost-effectively, although in the broadest sense it
can apply also to materials, equipment, and financial resources.2
According to the proceedings of an executive seminar on asset
management conducted in 1996, attributes, key components,
2
Center for Infrastructure and Transportation Studies at Rensselaer Polytechnic
Institute, 21st Century Asset Management, Executive Summary, Proceedings of a
workshop sponsored by the American Association of State Highway and
Transportation Officials and the Federal Highway Administration, October 1997.
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procedures, and outputs of an of asset management system
include the following:
A common understanding of performance measures and
criteria;
Understandable results in a user-friendly environment;
Customer focus;
A mission-driven orientation (i.e., asset management
strives to help the organization achieve its mission);
Accessibility at many levels within the organization;
Linkages to technical analysis, decision making, and
budgetary processes;
Inventory information and condition databases;
Life-cycle cost analysis; and
Optimization (i.e., allocates limited funds in order to
maximize net benefits or minimize total costs).3
These attributes are strikingly similar to key elements of a
customer-driven benchmarking process. Because of the
similarity, the likelihood of succeeding in a benchmarking effort
can be substantially strengthened by properly coordinating with
the asset management program of an agency and by thoroughly
understanding the asset management systems that are in place,
under development, or being planned.
Therefore, at the start of undertaking a benchmarking effort, it
is desirable to take an inventory of your agency's asset
management efforts. By doing so, you will be able to identify
procedures, performance measures, sources of data and
information, and other resources that can help in benchmarking.
You are also likely to find increased support for your
benchmarking efforts. Those charged with asset management
will usually recognize that customer-driven benchmarking can
benefit asset management, and vice versa.
3
Asset Management, Advancing the State of the Art into the 21st Century Through
Public-Private Dialogue, Proceedings of an executive seminar sponsored by the
American Association of State Highway and Transportation Officials and the
Federal Highway Administration, Washington, DC, October 1997.
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Chapter 1: Introduction to Benchmarking
There may also be shared recognition of the desirability of
integrating benchmarking into the overall asset management
program.
Outsourcing
Nearly all agencies outsource at least some of their maintenance
operations. A critical issue in outsourcing is determining which
activities to outsource, developing performance specifications for
contracting these activities, and evaluating the performance of
contractors. In addition, contractors themselves have a
compelling need to evaluate their own performance in order to
serve their clients effectively and to remain competitive.
Doing each of these tasks well depends on having appropriate
performance measures. Many of these performance measures are
similar to those that might be used for benchmarking.
When getting started on benchmarking, it is desirable to
determine what type of performance measurement, if any, is
being used in conjunction with outsourcing. You should
coordinate with those responsible for performance-based
outsourcing and, if possible, arrange to share data and results.
It is also desirable to contact contractors who must work under
performance-based specifications. Contractors may have
insights regarding how to establish an effective benchmarking
process. Also, contractors may wish to become benchmarking
partners.
Performance-Based Planning
The reinvention of government to make it more responsive to
customer needs and more accountable has been going on for a
long time and accelerated in the late 1980s. Gradually, and then
with increasing speed, public officials and managers in
government recognized that establishing customer-oriented
performance measures and targets for accomplishments is one of
the most effective ways to improve government efficiency and
effectiveness.
With the enactment of the Government Performance and Results
Act, all federal agencies were required to develop a performance-
based strategic plan by identifying appropriate input, outcome,
and output measures; setting targets; striving to meet the targets;
and reporting on their progress. Many states have enacted similar
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legislation, as have cities and counties. An excellent example of
performance reporting is Oregon Benchmarks, which received
national recognition.
The private sector has also been using performance-based
planning. In order to avoid the dangers of relying upon an overly
narrow set of performance measures, many private firms (and
government agencies) have been developing "balanced
scorecards." The balanced scorecard approach involves
performance measurement, goal setting, reporting, and
monitoring in four areas:
1. Customer perspective,
2. Internal perspective,
3. Innovative and learning perspective, and
4. Financial perspective.
When beginning a benchmarking process, you should
determine what types of performance-based planning are
occurring in your agency and identify opportunities to
cooperate and share information and results.
Accountability and the GASB
The GASB has played a major role in fostering performance
assessment, mainly to foster increased accountability of agencies
to their customers and the people who finance and pay for
government services. To this end, the GASB carried out a major
research program entitled "Service Efforts and Accomplishments
Reporting: Its Time Has Come," which produced a series of
reports on performance measurement and reporting, including
one on road maintenance.4
An outgrowth of this effort has been Ruling 34 of the GASB, with
calls for government transportation agencies to depreciate their
assets or report on the condition of assets by using data in an
asset management system when they prepare their annual
financial reports to the public. Virtually every government
agency prepares its financial reports in conformity with GASB
4
Hyman, W., R. M. Alfelor and J.A. Allen, Service Efforts and Accomplishment Reporting:
Its Time Has Come, Road Maintenance, Governmental Accounting Standards
Board, February 1993.
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