Managing overhead in public sector organizations through benchmarking

Abstract

Many public sector organizations struggle with the size of their overhead. The current crisis has forced them to cut costs, but how drastic can these cuts be without losing too much value? In 2001, we started an overhead benchmarking project in the Netherlands and by 2012, 1,500 public sector organizations had participated in the study. This paper shows how benchmarking of overhead costs helps organizations to understand and properly balance the costs and benefits of their overhead functions.

Keywords:

• Benchmark
• overhead
• overhead benchmark
• overhead value analysis (OVA)