Notions on Knowledge from Networks:

Benchmarking in Public Sector

Pasi Hellsten

, Annamaija Paunu and Hannele Väyrynen

Unit for Knowledge Management, Tampere University, PO Box 541, FI-33014 Tampere, Finland

Keywords: Knowledge Management, Knowledge Sharing, Benchmarking, Public Sector, Process Development.

Abstract: Today many organizations have come to value knowledge as a production factor. Thus, there is a constant

need for getting the information in and sorted. The knowledge is based on the own operation and the

knowledge from external sources. Organizations are no islands but rather a part of their ecosystem. This means

they need data and information from within but also from outside. One way to acquire this is benchmarking,

done in networks, national and international. Organizations are advised to have a process for systematic

acquiring, analysing, and disseminating data and information from various sources to gain understanding

about their environment. This is needed to support decision-making to achieve organization’s objectives.

However, as environments and technologies evolve in a rapid pace, newer ways emerge and not all of these

are possible to be tried out. Benchmarking is a way to gather experiences from various directions so that the

own decision-making is able to make informed decisions. Benchmarking should be embedded in business

processes, so that the full effects thereof may benefit the operation. The paper is based on two studies

investigating development schemes in a city operation where benchmarking is a part of the development tools.

This paper brings up notions of the city’s way of approaching the organizational development and especially

benchmarking, but there are still questions to be answered. Literature on different approaches and findings of

these studies are to be combined to form a vision to better match with reality. Various issues like users’ active

involvement, and further analysis are needed to fully grasp the big picture. Practitioners can use the approach

to assess their current state of activities or planning the organization of benchmarking program.

1 INTRODUCTION

Public sector is about providing services (De Vries et

al., 2016; Higgins, 2017). This raises questions like

by and to whom, how, and for what price? This

scrutinizing manifests itself in having multiple angles

to the phenomena under scrutiny. The individuals

performing the tasks, knowledge workers, need

constantly reinvent themselves, innovate, to meet the

requirements set by various stakeholders (Shujahat et

al., 2018). A group of ‘customers’, i. e. taxpayers as

well as other funding sources form only one of these

angles and stakeholders; what do they get for the

money they pay. Other factors, such as reducing

resources, citizens’ expectations, and public pressure

result in the development need of operations

(Gunasekaran, 2005; Hellsten and Pekkola, 2019). To

operationalize all previous, not to mention measure

https://orcid.org/ 0000-0001-7602-1690

https://orcid.org/ 0000-0002-3636-280X

them, may prove to be difficult. One is advised to

optimize the use of existing knowledge in order to

make the best of it. Knowledge management (KM) is

about utilizing the knowledge assets and enable

rethinking the existing organizational structure in

order to do better (Alavi and Leidner, 2001; Ferreira

et al., 2018). KM is a recognized approach and tool

for public sector organizations and its importance is

growing constantly (Massaro et al., 2015).

Keeping in mind that as ‘one tends to get what one

measures’ and ‘one can develop what one can

measure’, it is advisable to scrutinize critically the

proceedings and their connection to the bigger picture

(Bouwers et al., 2012; Ward, 1996). In order to

accomplish this, various networks have emerged

(Carlsson, 2003; Loukis et al., 2016; Popp et al.,

2014). Public sector organizations, such as the city in

question, belong to various networks. The city we

198

Hellsten, P., Paunu, A. and Väyrynen, H.

Notions on Knowledge from Networks: Benchmarking in Public Sector.

DOI: 10.5220/0010690000003064

In Proceedings of the 13th International Joint Conference on Knowledge Discovery, Knowledge Engineering and Knowledge Management (IC3K 2021) - Volume 3: KMIS, pages 198-203

ISBN: 978-989-758-533-3; ISSN: 2184-3228

observe confers with its immediate neighbours: cities,

towns and municipalities. The city, being one of the

largest in the country, belongs to a so-called Group of

Six, i.e. the six biggest cities in the country that are

thought to share some of the issues they each

confront. As a Finnish city it has a connection to the

Nordic network of cities and then there is also a larger

community, European community of cities in which

the city is a part of.

The objective of belonging to these networks is to

share experiences, learn from others, get new ideas

and even share forces in mutually beneficial

initiatives. Optimally to gain experiences from this

knowledge acquired from the networks means not

having always to make the same mistakes oneself and

to share one’s own experiences one has gathered

means the same for the other parties. Benchmarking

may be seen as a way to cover these activities

(Gunasekaran, 2005). Benchmarking is also a tool in

a larger repertoire of KM toolset.

We offer answers to the question: “How is

benchmarking perceived in Finnish public sector?”

by studying a large city in Finland and its decision

makers in relation to their networks. The aim is to

learn how and for what the city officials utilize the

networks in which the city is a part of. We point out

possible targets where there may still be room for

improvement. One contribution of this paper is that

the further discussion may find initiatives to start the

developments based on the notions we point out. We

collected spearhead-like issues where one might want

to start the improvements. The results of a qualitative

study show impacts, with a need for explicitly

articulated goals. Section 2 presents our theoretical

background. Sections 3 and 4 present the research

setting and methods, and our findings. Section 5

discusses the results.

2 THEORETICAL

BACKGROUND

Knowledge management is understood to mean a

process or a set of activities to collect, process,

organize, store, share and utilize knowledge in a way

that supports the decision-making in the best possible

way. That means activities on the individual and the

organizational level (Jääskeläinen et al., 2020). With

knowledge management the tacit knowledge in the

organization may be identified and later combined

with explicit knowledge. This may or may not include

also knowledge from external sources. The overall

objective is to support the organizational problem

solving, decision making and strategic development.

Thus, it may be stated that knowledge management is

a systematic and a holistic process that integrates and

combines technology and human aspects (Valkokari

and Helander, 2007). In today’s public sector

operation, in addition to mere improving the

operation, knowledge management aims to provide

means to better understanding of the needs of the

people and also to provide the people of the city with

better and more inclusive services in the most

resource-efficient and sustainable way. This is rather

often related to introducing newer ways of working.

The newer ways of working may refer to using

modern tools e.g. digitalization or merely to the

feature not having to do all on their own, being a part

of a network instead of being alone and operating in

complete isolation. Digital transformation refers to

rethinking the business models (Hellsten and Paunu,

2020). This covers executing daily practices,

processes, routines, and tasks. Digital transformation

affects resource allocation and operational execution

and may also prove to be an invaluable tool also in

utilizing organizations external networks (Agutter et

al., 2017). The use these tools with a network-related

activities and indeed operating as a part of a network

may translate to sharing information, experiences, but

also giving back from one’s own experiences, thus

keeping up a steady knowledge flow back and forth.

Benchmarking has established its place and

justification in organizations tool set when the

development activities are concerned (Kyrö, 2003).

Benchmarking is there to help the organization to

improve its performance and consists of phases

(Figure 1).

Figure 1: Benchmarking (Anand and Kodali, 2008).

As depicted in Figure 1. the phases include an

organized approach to the actions, e. g. various

validations and internal information gatherings, and

internal planning. The actual comparisons are only a

part in the process. There are numerous prerequisites

Notions on Knowledge from Networks: Benchmarking in Public Sector

199

for these actions laying the foundations. In practise

the full use of the model may prove to be challenging

due to other organizational issues, such as the primary

task and its demand of resources. (Bhutta and Huq,

1999).

Benchmarking may be applied to organizations

whether they are large or small in size, and either in

public or private sector. Benchmarking means

originally simply to compare one’s development

scheme to that of good, well-chosen counter-parts

(Gunasekaran, 2005). These comparisons may be

made with competitors, peers or similar from the

same or from a neighbouring branch, and in public

sector especially, organizations of the same size and

form.

3 RESEARCH SETTING

The case organization, city of Tampere, is the third

largest city in Finland. Tampere is situated in middle

Finland and is the largest inland centre in the Nordic

countries. Tampere and its neighbouring

municipalities together called Tampere Region are

home to close to half a million inhabitants. Tampere

mentions in its city website that “Tampere is one of

the three most rapidly developing regions in Finland.

It is a centre of leading-edge technology, research,

education, culture, sports and business.” (tampere.fi).

The case study concentrates on how the

knowledge and data acquired from benchmarking is

gathered, processed and utilized across the city’s

decision-making processes. The paper deals with the

usage of benchmarking, its benefits, challenges and

process in a city’s organization. The studies behind

this paper contain interviewees who are

representatives of different service areas of the city

but also contact persons to various national and

international networks. The interviewees’ positions in

the organization’s hierarchy vary from coordinators

on the operational level to the upper management

formulating the strategic decisions including both

‘corporate executives’ and political position holders.

The city has expressed the explicit wish of making

its network activities properly. The work and learning

in and from the (inter)national networks should be of

high standard. Equally this should be integrated to

city’s organizational processes. The aim is to more

effectively use learning from peers, national and

international, to support the city’s development

schemes be it on strategic or tactical level. The

university was engaged to study the related programs

and initiatives to clarify the present state and to

formulate possible operation re-directing actions.

The interviews were semi-structured and thematic

both face to face and electronically executed (MS

Teams -tool) interviews. The interviews were

conducted during the two research initiatives, first

during the spring 2018 and the second between

December 2020 and January 2021. First batch of

interviews entailed 20 interviews each lasting about

60 min. and the second one entailed 30 interviews of

similar duration. The interview material was analysed

with content analysis by multiple researchers and

discussed through to see whether the message and

answers as a whole were understood unanimously.

Before and during the interview period the relevant

documented materials were studied to provide the

researchers with the background information but also

to clarify the basic settings more thoroughly.

Additionally, a virtual seminar with the above-

mentioned Group of Six was conducted. The aim of

the workshop was to discuss and gather experiences

from various cities concerning benchmarking; how

cities benchmark, how new knowledge is

disseminated, how well new ideas and experience

take root in different cities.

4 FINDINGS

The possible benefits of benchmarking are widely

acknowledged in the city of Tampere as are the

positive outcomes of networking activities. The

interviewees brought up many concrete ideas on how

to improve operation on multiple levels. The level

here refers to the individual tasks, activities in an

office but also the operation on even larger scale,

sometimes they may concern the whole service area,

depending on which level the network and the

discussions there are concentrated on.

Very important feature regarding the

benchmarking is the support and a mandate from the

highest level. The similar notion is known from the

change management literature, to offer the true

justification to the activities (Kotter, 2007). This

gives a backrest for the individuals taking part in the

network activities but also for presenting the emerged

thoughts and ideas to the ‘home office’. The

interviewees reported this being the case. They felt

that the organizational support was there. Having said

that, the interviews tell us that the activity is not

managed to perfection. This applies similarly to the

reporting of the experiences gathered in the network

events. All the activities are roughly based on the city

strategy but the implementation varies and clear

guidelines are missing. In addition, the various

service areas and their managers have a slightly

KMIS 2021 - 13th International Conference on Knowledge Management and Information Systems

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different view on how to make benchmarking happen

and how to make the full use of it. Similarly, the

reporting varies; should an individual be a more

organized person perhaps s/he makes the paperwork

after an international meeting more thoroughly and

may even report to the supervisor whereas the person

not quite so, may just give an oral report of the

proceedings at an opportune moment. The

discrepancy causes uneven realization of the activity.

To summarize, it may be stated that the early parts of

the Benchmarking cycle (Figure 1.) the following

conclusion may be drawn: in team formation, subject

identification, and validation the recognized benefits

include coming up with new ideas, piloting, clarifying

the big picture of the proceedings. However, there are

also recognized challenges in these early phases:

scarcity of resources, the actions are more likely to be

random and not systematic. Also, the tacit knowledge

which resides in individuals is not easily exploited for

the organizational objectives. Language and cultural

issues may also cause additional challenges.

The resources are one obvious factor affecting the

benchmarking in all phases of the cycle. The

resources here mean financial, temporal, and personal

issues. The service areas all have their budgets which

may or may not limit the activities and their width.

Similarly, the time each person has for networks and

benchmarking there in addition to her/his other

routines, varies. Thirdly, the attitude towards this

kind of networking activity and the mere personality

of the individual in question seems to affect the

outcome of the benchmarking activities too.

This gives the feeling that even if the persons are

the representatives of the city in a network,

benchmarking is not always seen as a valuable part of

the actual tasks one’s job description entails but rather

an add-on to the multitude of other tasks that one has

to execute.

Pre-benchmarking and benchmarking phases in

the middle of the cycle present as benefits the

strengthening of international networks, increased

trust in and of the cooperation amongst them. Also,

the sense of developing operation and actions

together, the change in individuals’ attitudes are

counted to be among the benefits and lessons learned.

However, there are also challenges in the realization

of these phases: cultural and system differences,

comparability, bureaucracy, resources, all of which

may dampen the eagerness to execute benchmarking

effectively.

In the latter phases of the cycle, action plans,

implementation, outcome and continuous

improvement following features emerge as

recognized benefits: new ideas, learning, trust,

networks, positioning. Similarly, some challenges are

to be acknowledged: how to ensure systematic data

collection. Also, the neglected use of applications and

executed documentation are recognized as worrisome

points. Matchmaking (regarding both knowledge and

actors) is challenging, how could it be ensured that

the right forums are found and right individuals are

participating in them.

One crucial feature in making benchmarking

successful is the courage of the network members to

present also the failed attempts on developing the

operation. If there was an experiment that went bust

or initiative that proved to be costly, or resource

demanding, and one is willing to share these

experiences really delving into the causes and

circumstances, true lessons are to be learned. One is

more prone to present success stories, which are also

good, but the lessons learned from cases how not to

do something, are always welcomed warmly. In one

instant, on the grass-root level where the activity was

well received and organized this was not a problem

even if the individuals were different. This varies

quite a bit. We, the people, are different: some are

more courageous to admit our imperfections and

some are not. Should this be written down in a manual

on how to do benchmarking it might ease the actual

process.

5 DISCUSSION

Knowledge management is an invaluable tool for

public sector organizations where the various

stakeholders present conflicting pressures for the

operation and the development thereof. The constant

competition where the financial restraints, various

increasing demands and political aspirations meet

means dire straits indeed. The possibilities to make

mistakes in the chosen way of operating under the

fluctuating circumstances is notable. Thus, it

becomes evident that the more information, and that

refined to knowledge, is available, the better.

To save the scarce resources and to learn newer,

better, ways of working, forming networks and

benchmarking, provides appropriate tools. Public

sector organizations are rarely in a directly competing

position with one another. Also, the word ‘public’

bears significance, the financials tend to be public.

This means that they may share the information and

learn from one another without having to fear the

exposing major business critical data to others.

As mentioned, the six biggest cities have similar

mode in operating, have more or less same issues, and

wrestle with similar problems. Their strategic

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objectives, their networks and methods are quite

same. Similarly, the concrete operation in these cities

proved to be much the same. There is no one

organized way of how the benchmarking is to be

conducted. From the knowledge management

practises there is the gathering of the data, sometimes

referred to as empirical material, and the organizing

thereof (Choo, 2002; Hellsten and Myllärniemi,

2019). Each area may have a different way of doing

this, even inside of one city. The systematic way, or a

model, is not there. We offer a possible approach for

the future benchmarking activities (Figure 2.).

Figure 2: Proposed approach for public sector

benchmarking.

This is a condensed version of the theoretical

models found in the literature and presents a

simplified way of organizing the actions. A notable

detail is that the outcome includes also the decision-

making based on discovered results of the inquiries.

This might offer an answer to the issues found in

the interviews where the systems and applications are

reportedly being used sporadically. In some cases

there are some form of tool sets in use, however, quite

often this is not the case. The applications are not

utilized to their full capacity to say the least. The

effective organization of the knowledge forms the

basis for the effective knowledge dissemination,

which in turn, is a starting point of well executed

knowledge-based management. Based on the

research the knowledge sharing, the results from the

benchmarking, are unevenly distributed and

sometimes in an occasional manner. Of course, there

are weekly meetings in teams, in some cases in

service areas, and a bit more seldom management

teams where these issues may come up. Or not.

As a summary, the amount of tacit knowledge is

large. This means that the knowledge indeed resides in

people. The phenomenon is recognized and only when

acknowledged it may be addressed so that the

organization may benefit from the vast knowledge base

that is the employees (Nonaka and Takeuchi, 1995).

The future step may be to define the present state of

knowledge management by e.g. employing a

questionnaire regarding this and elaborate the findings

thereof and thus formulate a road map for the future

endeavours in this area. Benchmarking is an obvious

asset of implementing KM in the city’s operation and

especially the improvement of the operation.

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