A benchmark, or standard by which something can be measured, is used to compare peers to improve results. The key steps in getting started with benchmarking are: identifying the key metrics and indicators for your benchmarking purposes; defining a peer or comparison group; and finding the data to use.
Metrics and Indicators
Any benchmarking effort should begin with a good understanding of your own institution (internal analysis) and its environment. When preparing to choose benchmarking indicators for the institution, it may be useful to consider two distinct types of metrics: operational benchmarks and strategic benchmarks.
If internal analysis and environmental review indicates that your institution may not have the operational efficiency of its peers, then the institution may decide to focus on operational benchmarks, such as the number of bills processed per FTE student. Operational benchmarks are often considered the core of a benchmarking effort. However, the risk of focusing exclusively on operational benchmarks is that they could be treated as an end unto themselves instead of part of an overall strategy of achieving a competitive advantage.
While operations focus on how we do what we do, strategy focuses on why. For example, how is the institution positioned to perform in five, ten, or twenty years? Indicators could include the quality of the applicant pool, the professional development of staff, or the technological savvy of the institution. Typically high level management is most interested in strategic benchmarks, such as rankings in national surveys and leading indicators for the industry.
Defining A Peer Group
Who should an institution compare itself to? If your institution doesn't already have a defined peer group, there are resources to help begin developing one:
The Carnegie Foundation for the Advancement of Teaching recently created multiple classification systems based on undergraduate programs, graduate programs, undergraduate profile, size and setting of the institution, and a revision of the traditional basic classification. Through the Foundation’s website, institutions in the same classification/grouping can be identified. In addition, custom classifications can be created using the online tool on the Foundation’s website.
Finding the Data
One of the great challenges of benchmarking can be knowing where and how to find the right data. There is a wealth of information available, and a good place to start finding available data that fits your needs is visiting the resources identified in the resource matrix and in more detail on our resource page.
There are many data sharing groups that exists for different types of institutions, regions, athletic conferences, etc. A few examples are the Higher Education Data Sharing consortium (HEDS), the Association of American Universities Data Exchange (AAUDE) and Southern Universities Group (SUG). Institutions may already be involved in a data exchange or may want to consider joining an appropriate data sharing group for benchmarking purposes.
NACUBO would like to recognize the efforts of Steve Kimata, University of Virginia, and the NACUBO Accounting Prinicipals Council in building these Benchmarking Resource pages.