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Successful construction teams consistently work toward getting better at what they do — producing better quality projects, reducing waste and delivering work on time and on budget. Construction benchmarking provides baseline metrics that teams can use to measure their own activities against past performance or industry standards, allowing them to identify areas for improvement.

Benchmarking in construction is like giving your company a health check-up. It involves comparing your company’s performance against standard levels to evaluate how individual projects stack up. The contrast may indicate areas for improvement, leading contractors to adopt best practices, enhance performance, reduce risk and gain a competitive edge.

Exploring the Different Types of Construction Benchmarking

There are a few different types of benchmarking. The two main categories are internal and external, but there are other methods that are valuable for identifying opportunities to improve.

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  Internal Benchmarking

  Internal benchmarking looks at performance within a single company.

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  External Benchmarking

  External benchmarking compares how one company to others in the industry.

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  Strategic Benchmarking

  Strategic benchmarking is a type of external benchmarking that compares metrics with those of industry leaders or best-in-class companies to identify areas for strategic improvement.

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  Competitive Benchmarking

  Competitive benchmarking is the process of directly comparing performance with that of competitors to gain insights that can lead to improved performance and a stronger market position.

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  Functional Benchmarking

  Functional benchmarking involves comparing specific business functions or processes across different industries or sectors, rather than focusing solely on direct competitors. This approach aims to identify best practices and innovative ideas that can be adapted to improve similar functions within an organization.

What are the key benefits of benchmarking?

Every company is on its own unique journey, so why bother comparing its performance against industry standards? There are several benefits contractors can derive from collecting, analyzing and using data to change processes and procedures.

Cost Control

Benchmarking can help control costs at even the earliest stages of the construction process. Project stakeholders can use industry data to establish realistic target costs, and then use those metrics through the design phase to keep costs low.

Contractors can use benchmarking to see where they may be underperforming, and create healthy targets for improvement.

Performance Improvement

Construction faces a lot of challenges, including cost unpredictability, workforce shortages, and even the possibility of falling in the coming years. Benchmarking can help companies improve their efficiency and productivity within constraints, which may  be incredibly important for the industry and individual companies into the future.

Risk Mitigation

Benchmarking can reveal operational deficiencies, helping contractors prevent delays and the subsequent financial losses. Take, for example, a company that used benchmarking to uncover frequent delays in its supply chain. Identifying where they were falling behind, the company streamlined their processes and avoided costly setbacks.

Client Satisfaction and Competitive Edge

Benchmarking can enhance project performance, outcomes and transparency, benefiting contractor-client relationships which can bolster business in a competitive industry.

How to Use Construction Benchmarking

Benchmarking requires data. Using a single metric isn’t likely to be effective, because it won’t provide enough of a picture of current practices to lead the way to better ones. To accurately assess performance against industry standards, contractors collect and organize amounts of information from their daily operations.

1. Get specific.

   Trying to improve everything all at once is often overwhelming and ineffective. Instead, pick an area or process that seems to be weighing the process down, and work to improve it. Establish key performance indicators (KPIs) that will be used to compare each area, like quality, safety, time to completion or cost.

2. Collect data.

   Here’s where the rubber meets the road: Data needs to be collected consistently across the studied metrics and organized into a standard format. Field teams can use mobile devices to fill out pre-set forms so that data sets are complete and current.

3. Analyze the data.

   Use the collected data to see the company's performance against the benchmarks in the indicated areas. Where is the company underachieving and where is it doing well? What are industry leaders doing better?

4. Set improvement goals.

   Based on the findings, define clear, achievable goals. Develop and roll out strategies for improvement. Continuously monitor progress and adjust as needed.

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Benchmarking as a Strategic Process

Benchmarking can lead to introspection, improved processes, and ultimately, more success in construction. Construction professionals who embrace benchmarking gain insights into improving efficiency, risk reduction, and greater project performance.

Successful benchmarking requires collecting complete, accurate, timely and relevant data. Technology can help project teams collect all the information in a systematic and organized way to lead to better insights that in turn lead to better progress.

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