What is internal benchmarking?
Internal benchmarking is the comparison of performance metrics, processes, or outcomes across departments, sites, or time periods within the same organisation. The reference point is the organisation's own historical data — not external competitor figures or published industry averages.
In plant operations, this typically means comparing one shutdown, turnaround, or outage against a previous one at the same facility: estimate vs. actual costs, labour hours per trade, and planned vs. executed duration. Because the comparison draws on data the organisation already holds, it requires no third-party data access and produces results that are directly applicable to the organisation's own operating conditions.
Internal benchmarking definition
Internal benchmarking is defined as a structured comparison of operational performance across internal units — departments, sites, or events — using the organisation's own records as the reference dataset.
The distinction from external benchmarking: external benchmarking measures performance against competitor or industry data, which is often difficult to obtain, expensive, or based on conditions that differ from your own plant. Internal benchmarking uses data the organisation already holds and generates comparisons against known baselines — the same equipment, the same plant, the same trade mix — rather than against an industry average that may not apply.
Opting for internal benchmarking often proves more resource-efficient, both in terms of time and financial investment. Unlike external benchmarking, which demands access to often elusive or expensive competitor data and insights, internal benchmarking focusses on your organisation's own processes. This introspective approach facilitates the identification of best practices, highlights inefficiencies, and uncovers areas ripe for enhancement. With a thorough understanding of your internal workings, you can craft targeted improvement plans that are finely tuned to your company's specific challenges and opportunities. Moreover, internal benchmarking negates the need to divulge sensitive internal data or seek confidential information about competitors, thus sidestepping potential ethical or legal pitfalls.
By embracing and adeptly implementing internal benchmarking strategies, companies can not only enhance their processes but also foster a culture of continual growth and learning.
Internal benchmarking examples
Three examples from industrial operations, all drawn from shutdown, turnaround and outage (STO) planning:
Example 1: STO cost and duration tracking across consecutive events
A refinery runs a major turnaround every four years. At completion, iPlanSTO records actuals for every work order: labour hours by trade, cost vs. estimate, and final duration against the planned schedule. At the next planning cycle, planners pull those actuals as the starting baseline — not from memory or generic norms, but from the executed record of the same plant's last shutdown. Because the software retains all historical work order and work package data, the comparison is between like-for-like events on identical equipment, not against a generic industry average.
Example 2: Cross-site comparison within the same operating group
A multi-site operator runs shutdowns at two refineries. Both sites use the same work order structure and the same planning software, so comparable data exists across events. The operator benchmarks heat exchanger cleaning duration, scaffold hours per job, and cost per work order between sites. The site with lower variance between estimate and actual — the site whose planning assumptions most closely reflect what execution actually takes — becomes the planning reference for the other. The comparison mechanism is the estimate-vs-actual ratio pulled from each site's completed work packages.
Example 3: Trade performance comparison within a single STO
On one turnaround, a planner compares mechanical vs. electrical trade performance using cost variance and schedule variance data. Where one trade consistently finishes under estimate and the other consistently over, the difference indicates a planning assumption error — either in the labour norms used, or in how scope was characterised at the work order level — rather than an execution problem. The corrected norms feed the next event's planning baseline.
Understanding Internal Benchmarking:
Internal benchmarking involves comparing internal processes and performance metrics within the same organisation. Unlike external benchmarking, which looks outward to compare with other companies, internal benchmarking offers a more introspective view.
This practice is essential for identifying the 'best of the best' within an organisation and leveraging those insights to elevate overall performance. For example, during a plant(s) STO (Shutdown, Turnaround or Outage) software such as iPlanSTO can help you compare estimate vs actual, for a single activity, work order, or across an entire trade, to optimise future STO performance. iPlanSTO retains all historical Shutdown - Turnaround - Outage, work order & work package data.
This history can be re-utilised time and again so that users can understand all historical works, estimated effort & costs, versus, actual effort & costs, & ability to capture lessons learned when completing works: improving accuracy of future planning! The benefits are clear: accurate forecasting of future labour effort, greater confidence in plant downtime windows, cost reductions, and the fostering of a performance-driven culture.
“If you never look down while you’re climbing the ladder you won’t know how far you’ve come”
Step-by-Step Guide to Effective Internal Benchmarking:
- Identifying Benchmarking Objectives: Begin with clear, measurable goals. What do you want to achieve? Is it process efficiency? cost reduction? employee productivity? or customer satisfaction? Clear objectives guide the entire benchmarking process and ensure that efforts are aligned with your organisational goals.
- Choosing Benchmarking Subjects: Once objectives are set, select key processes or performance metrics that align with your objectives and identify which departments, processes, or operations will be the focus of your benchmarking. This could range from manufacturing processes to HR practices.
- Data Collection and Analysis: Data is the cornerstone of any benchmarking process. Collect comprehensive data on the chosen subjects, focusing on metrics that directly relate to your objectives. This data must then be analysed to identify performance gaps and areas of excellence. Advanced analytics tools and software, in particular business intelligence platforms, such as PowerBI, can be particularly useful in this stage, offering deeper insights and predictive capabilities. Utilise both qualitative and quantitative methods for a holistic view.
- Learning from Best Practices: Investigate the top-performing teams, areas or functions. What are they doing differently? How can these practices be adapted and implemented in other areas of the organisation? This phase often involves cross-departmental collaboration, breaking down silos to share knowledge and strategies.
- Implementing Improvements: Develop a plan to apply the best practices identified. This should be approached systematically, with clear plans and timelines, and most importantly action owners for each improvement, making the person accountable to deliver the improvement by a mutually agreed milestone. This might involve training, process changes, or resource reallocation.
- Monitoring Progress: It's equally important to monitor the impact of these changes, adjusting strategies as necessary to ensure they deliver the desired outcomes. Establish metrics to track the impact of changes. Continuous monitoring allows for adjustments and ensures long-term success.
Common Challenges and Solutions:
Internal benchmarking is not without its challenges. Resistance to change is common, employees may be sceptical or apprehensive about adopting new practices and departments may be protective of their methods.
Overcoming this requires strong leadership and a culture that values continuous improvement and learning. Ensure transparent communication and involve teams in the process.
Data integrity can also be an issue. To mitigate this, use robust data collection and validation methods.
Lastly, navigate internal politics by fostering an environment of collaboration, not competition.
The Role of Technology:
Technology plays a pivotal role in modern benchmarking practices. From data collection tools to analytics software, technology can streamline the benchmarking process, enhance accuracy, and provide actionable insights more efficiently.
This is particularly true in the industrial sector, where we've seen the benefits of software tools like iPlanSTO for internal STO business process benchmarking, providing data to help attain the insights.
Additionally, embracing technologies such as the Internet of Things (IoT) and Artificial Intelligence (AI) offers the advantage of real-time data and predictive analytics, transforming benchmarking into a more proactive and future-focused practice.
Conclusion:
Internal benchmarking is more than a process improvement tool; it's a catalyst for organisational transformation. By embracing these practices, businesses can not only optimise their current operations but also pave the way for sustained innovation and growth.
While external benchmarking is valuable for understanding your position in the market and identifying industry best practices, starting with internal benchmarking ensures that you are making the most of your internal resources and capabilities before looking outward. It's often a strategic first step in a broader benchmarking and improvement process.
Internal benchmarking is not just a process of comparison; it's a strategy for continuous improvement. By systematically identifying and leveraging internal best practices, companies can enhance their performance in a focused, efficient manner.
Please remember, the goal of benchmarking is not to emulate but to evolve – to take what's working and adapt it in ways that drive your organisation forward. In the fast-paced industrial world, internal benchmarking is not just a tool for success; it's a necessity for survival and growth.
We invite you to share your experiences with internal benchmarking or suggest topics for future insights. Your engagement helps us all grow together.
