Detecting intrinsic inefficiency on process level: Benchmarking of transactions in banking

Abstract

Banks are looking for ways to close their operational performance gap. This paper proposes a new approach for the detection and analysis of process inefficiency. The Benchmarking of Transactions reveals insights concerning the performance of a business process and offers new opportunities for process improvement. The article delivers an overview of the concept as well as the results of an application in a large organization. The benchmarking approach is based on Data Envelopment Analysis. The approach is applied to a prototypical banking process using actual operational data. This real life application documents the large variance in performance found on transaction level and the existence of inefficiency. Furthermore, the pattern of inefficiency differs across the three proposed views of performance. This research raises issues in relation to the process execution performance. The analysis provides deep insights that can be helpful for understanding and improving business processes. © 2009 Springer Berlin Heidelberg.