Is There Value in an Asset Management Benchmarking Study?

When it comes to improving business performance, benchmarking studies may seem like a logical starting point. After all, they offer a way to compare your organization to others (usually) in the same industry and identify areas where you may be falling behind. However, can relying solely on benchmarking studies to drive progress actually be counterproductive? To truly improve, it's more effective to focus on understanding the current state, documenting the future state, and prioritizing initiatives to achieve your goals, after all every organisation is the same - but different.

One of the main issues with benchmarking studies is that they can create a "race to the bottom" mentality. Instead of striving to be the best in your industry, you may find yourself fixated on being better than the competition. This can lead to an initiative to simply replicate what others are doing without considering whether it's the best approach for your organization. In many cases I have seen examples where the data being used to support the benchmarking and comparisons just isn’t accurate enough to create any meaningful insight, yet if “indicative” results are tabled this can gain momentum and become a false truth, while any concern on the data and analysis supporting the insight gets largely forgotten.

Naturally, benchmarking studies tend to focus on quantitative metrics such as maintenance spend and CAPEX, rather than the qualitative factors that may be driving those numbers. For example, a company with low maintenance spend may be achieving success through unsustainable practices or unsafe behavior. 

In order to truly improve, it's essential to understand the underlying factors that are driving success or failure. Its also critical to consider any comparisons over a period of time. There is or course a connection between (say) maintenance spend and asset performance (assuming sound maintenance practices), but any changes (lets say a reduction), depending on the industry and the assets might not begin having a negative effect for a few years. In these cases, where a “snapshot” is taken of cost versus performance it might look like an organisation has reduced cost and maintained performance, when the reality in a year or so it might be quite the opposite.

A better approach, particularly in mature organisations where there is no more "low hanging fruit", is to begin by thoroughly understanding your organization's current state. This means examining everything from your company culture to your existing processes and procedures. By taking a holistic view, you can identify areas that are barriers for better performance that most likely wont have appeared in a benchmarking study.

From there, you can document the future state – that is, where you want your organization to be in the long term. This provides a clear vision for what you're working towards and helps ensure that everyone in the organization is working towards the same goals.

Finally, prioritize initiatives that will move you towards your goals. This may mean making changes to your existing processes, investing in new technology, or rethinking your organizational structure. By focusing on the initiatives that will have the biggest impact, you can drive meaningful change and improve your organization's performance over the long term.

What’s critical is to structure the assessment to uncover what’s preventing you from meeting your goals, rather than applying a generic assessment framework. So before any assessment, documenting and aligning on goals is key, such that an analysis and assessment can be constrained only to elements that are working against the goals. This then ensures corrective actions address relevant challenges and moves the organisation towards meeting the asset performance targets.

In summary, while benchmarking studies may seem like a logical starting point for driving organisational improvement, they may not be the most effective approach. Instead, it's essential to be clear about the goals, understand the current state, document the future state, and prioritize the initiatives that will help you achieve your goals. By taking this approach, you can drive meaningful change and position your organization for long-term success.

By Jason Apps

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Jason Apps is an Executive Level Asset Management Consultant, providing support to organisations in pursuit of high-reliability world-class asset management practices. He is the Author of ASMx: Asset Strategy Management - A Leaders Guide to Reliability Transformation in the Digital Age, a regular presenter, workshop facilitator and trainer.

Jason has delivered significant performance improvement, cost reduction, and risk management to global, blue-chip clients, for the last 20+ years. With a proven, unique, pragmatic approach to identifying improvement initiatives, implementing and structuring for enduring success.

Email Jason at Jason.apps@exar-am.com or visit exar-am.com