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ACCA Strategic Professional · Advanced Performance Management · Performance improvement models and techniques

Marlow Telecom benchmarked its customer call centre against a leading competitor and found its cost per call was 20% higher. Management immediately cut call-centre headcount to match the competitor's cost per call. Six months later, customer churn had risen sharply. Which flaw in the benchmarking exercise best explains this outcome?

The exercise looked at one cost measure and copied the result without understanding the process, quality and contextual differences behind it. Effective benchmarking examines why performance differs and uses balanced measures, so cutting headcount to match cost harmed service and drove customers away.

  1. ABenchmarking was performed against a competitor rather than internally
  2. BThe exercise focused on a single cost metric and ignored differences in process, service quality and context that drive the resultCorrect
  3. CThe data were not audited by an external party
  4. DBenchmarking was carried out before a budget had been set

Explanation

Benchmarking should identify why performance differs, using several measures including quality, and consider context and strategy. Copying a cost figure without understanding the process and service differences led to damaged service and churn. The choice of a competitor partner and audit status are not the root cause.

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