Benchmarking and its use for SAIs´ international cooperation
There are many definitions of benchmarking as well as there are many types of it. Let´s try to elicit the meaning which applies mainly to the evolution and usage of this method:
“Benchmarking is a procedure during which we are so modest to admit that someone else is better at something than we are, and after which we are so clever that we found out the way how to match with them or even outrun them.”
When we considered the project which we call “BIEP” (The Benchmarking Information Exchange Project), we were aware of the fact that all developed countries support various methods of comparison within public administration, and thus providing a valuable feedback to the top management. One of the most advanced methods of comparison is so-called “benchmarking”.
Benchmarking is classified into types according to the applied approach:
- Strategy comparison
- Performance comparison
- Process comparison
- Functional benchmarking
- Internal, external and international benchmarking
The experience from the Czech public administration and from abroad shows that benchmarking provides invaluable and irreplaceable information which cannot be obtained in any other way. Therefore, the SAIs should focus on this method which can help them to bring topical and complex information to the administrators of public funds. The information is also viewed from a broader perspective, and the data obtained assist the audited entities in improving their performance and output quality.
Various platforms for SAIs´ cooperation provide for possibilities to apply international benchmarking. This type of benchmarking can bring examples of best practice, and show the differences between best practice and actual procedures in individual countries. To fulfil such objectives, we need to share correct and comparable data.
Nevertheless, international benchmarking is not a quick or simple process. Before undertaking such benchmarking, it is important to have a thorough understanding of the public administration on the national level. Some countries have strict guidelines as to what information can be gathered, and whom auditors and other stakeholders can contact to get that information from a government´s data storage, particular information systems or from an agenda processing. Depending on the size of the agenda in charge of different government departments, auditors may be surprised with what is readily available in-house.
The BIEP based its structure on a well-established benchmarking cycle which has been applied by OMBI (Ontario Municipal Benchmarking Initiative) since 2000:
- Activity/area selection
- Services profile description
- Performance data collection and analyses
- Determination of performance scale
- Identification of best practices
- Comparison strategy development
- Evaluation of processes and results.
The Supreme Audit Office introduced the BIEP project proposal at the meeting of presidents of the SAIs of V4+2 countries (the Czech Republic, Hungary, Poland, Slovakia, Austria and Slovenia) in September in 2016 in Lednice. The objective of the activity was to introduce a project which would result in long and systemic cooperation. The cooperation would be first tested in a smaller group of SAIs. The SAO therefore worked out materials (product papers and project template) which outline the topics, possible approaches, and reasoning behind the proposed international comparison. This was intended as an inspiration, and could be the basis for future cooperation.
What should a supreme audit institution consider before joining the benchmarking project, and what questions it should be able to answer:
- What is the reason for us behind performing the comparison?
- Is the SAI ready to share its findings with other participants of the project?
- Is the SAI aware that benchmarking is time-consuming and HR resources demanding activity?
- Will the auditees accept the obligation to improve their performance with respect to the outcomes of the benchmarking?
We recommend to all SAIs to join a benchmarking activity such as BIEP only when it can answer all the previous questions with YES. The activities to be carried out should also have the full support of the SAI´s management.
The SAO has been currently working together with the SAO Slovakia on the topic of efficiency of the immovable property use. The SAO has been working on a set of indicators (within currently carried out audit No. 16/26), which it shares with SAIs of V4+2, and it consolidates the data for the future analysis. These can be helpful in setting up internationally usable performance indicators (or within strategic benchmarking) within the area of immovable property, more specifically in the use of government´s administration buildings. The SAO will introduce the results of the cooperation, and the setup and tested methodology at the next meeting of the presidents of the V4+2 countries in autumn 2017.