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Business, Agencies To Standardize Their Benchmarks

The Wall Street Journal: Business, Agencies To Standardize Their Benchmarks

By WILLIAM M. BULKELEY

Staff Reporter of THE WALL STREET JOURNAL

May 19, 2004; Page A2

In an effort to boost productivity, 14 corporations, government organizations and consultants have agreed to share and standardize performance benchmarks, in the same way that open-source software programmers share code.

The Open Standards Benchmarking Collaborative, which is scheduled to be unveiled today includes International Business Machines Corp., Procter & Gamble Co.; Shell Oil Co., a unit of Royal Dutch/Shell Group; the U.S. Navy and the World Bank.

Working with American Productivity & Quality Center, a Houston nonprofit, the group plans to create a standard set of thousands of measures of business processes such as purchasing and managing a supply chain.

The kinds of measurements the group aims to standardize are technical, but closely watched, by many companies and public-sector organizations, such as how to measure the wastage on a factory floor, or the cost of processing a purchase order. With common definitions, the partners believe they can create standards that can be used to tighten business practices and promote efficiency.

Companies can go to the center’s Web site and fill out a questionnaire to put their information into the database. Then they get access to the measures and see how their own performance compares with industry leaders.

IBM and the other companies decided to push the standard measures because companies need “consistent performance metrics to assess and track their competitive position,” said Ginni Rometty, IBM’s vice president in charge of consulting services, who will be a member of the group’s advisory council.

Write to William M. Bulkeley at [email protected]

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