One definition of Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries.
Dimensions typically measured are quality, time and cost. In the process of benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compare the results and processes of those studied (the "targets") to one's own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.
We first introduced benchmarking to the corporate treasury universe in 2009 and the reactions have been very positive.
In 2010 we launched our first European Study and in 2011 we expanded the studies into the Middle East, Asia Pacific and Latin America regions. We have attracted responses from almost 1,200 companies spanning a broad universe in terms of industry sector and size. The seniority of respondent is also impressive with the majority being Group Treasurer, CFO or Finance Director level.
We have addressed a wide range of areas from internal reporting and benchmarking, cash and liquidity management, risk and supply chain to technology and bank relationships with some interesting findings which have been published as hard copy reports.
Our second study in Europe during 2011 incorporated a specific section on the Key Performance Indicators (KPIs) being deployed by companies against eight key areas within the treasury function. This section will be extended to other regions in our 2012 programme as will our geographic coverage as North America will be added to the suite of studies this year.
Presentations on the findings have been made to corporate audiences at industry conferences in:
- Geneva
- Singapore
- Abu Dhabi
- Miami
- Rome
- Sao Paulo
Responding to the challenge
As Eileen Zicchino, Chief Marketing Officer for Treasury Services at J.P. Morgan (pictured) states: “We are delighted to be supporting the Benchmarking Programme. The separate studies to date in Europe, Middle East, Asia Pacific and Latin America have provided useful insight into the treasury environment and the contrasting challenges that multi-national companies are contending with in each region.
"With a study in North America to come in 2012, we believe this initiative will become the catalyst for promoting best practice among treasury operations around the world. Corporate treasury continues to undergo immense change in responding to increasing complexities of managing cash efficiently and effectively. The benchmarking programme goes some way to providing a barometer of how companies are responding to the challenge.
This programme offers an ideal opportunity to better understand the key issues faced by CFOs, Group and Regional Treasurers now and over the next 12 months. I believe there is much to learn from these findings and strongly encourage participation from all corners of the world.”
John Gibbons, Europe, Middle East & Africa (EMEA) Regional Executive at J.P. Morgan Treasury Services gives his perspective on some of the latest Benchmarking Study findings in the February 2012 edition of Treasury Today, saying that, "Every business unit needs the opportunity to understand how they are performing, versus a best-in-class benchmark. This helps to make sure that their aspirations are market-leading and that they know where they are headed going forward. That is simply a question of best practice."