WHAT IS BENCHMARKING?

Benchmarking is the continuous process of comparing a company’s strategy, products, and processes with those of world leaders and best-in-class organizations in order to learn how they achieved excellence, and then setting out to match and even surpass it. 

Shortly, Benchmarking is:

·        Setting goals by using objective, external standards and 

·        Learning from others (not necessarily in your own industry) 

Xerox Corporation, which is the pioneer of the technique’s application in management practice, defines it as: 

“The search for industry best practices which lead to superior performance”.  

The key words are “best practice” and “superior performance”.  

"Competitor and customer benchmarks may be the most underused motivators in the management's administrative tool kit" 

(What forced the Xerox to implement the benchmarking techniques?)

—Hamel and Prahalad, Competing for the Future   

"Benchmarking is the process of identifying, understanding, and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance."

—American Productivity & Quality Center   

" Benchmarking is an on-going outreach activity; the goal of the outreach is identification of best operating practices that, when implemented, produce superior performance."

  We should ask ourselves the followings if we are going to improve: 

• "How are we doing compared to the other players in the market?” 
• "Are we using the best practices?“ 
• “How do we make our products/processes superior?” 
• “Why other companies perform better than us?” 

Benchmarking is becoming so widely practiced for two primary reasons; 

·        It is an efficient way to make improvements 

·        It helps organizations make improvements faster 

Benchmarking gives to an organization ability to outperform the competition in the market and competitive advantage

Most of the Benchmarking taking place across the world follows a very similar methodology:

·        identify the best-in-class 

·        corporate with them and study them 

·        learn from them based on the obtained information improve yourself.  

Benchmarking PROCESS FLOW that can be applied to nearly all business situations.  

This process flow chart could be modified in order to achieve a better fit; Benchmarking process flow had been applied by XEROX company can be found here. 

BENCHMARKING vs. TRADITIONAL COMPETITIVE ANALYSES