Benchmarking

Definition of Benchmarking
Benchmarking is the process of improving performance by: Continuously identifying, understanding, and adapting outstanding practices found inside and outsidetheorganization.
Knowing your position and operation. Adopting best practices which are the cause of best performance. Studying best practices provides the greatest opportunity opportunity for gaining astrategic, operational, and financial advantage.
Benchmarking is NOT:
* Tour visits to other competitors or organizations.
* Performance measurement, it’s part of benchmarking process. i.e.competitive analysis.
* A cost-cutting exercise.
* Imitating others’ practices or processes, it’s “How to” not “What is”.
* A public relations exercise.

Why Companies Use Benchmarking?
•Improve performance: Benchmarking identifies methods of improving operational efficiency and product design.
• Understand relative cost position: Benchmarking reveals an organization’s relative costposition and identifies opportunities for improvement.

Why Companies Use Benchmarking?
* Increase the rate of organizational learning: Benchmarking brings new ideas into the organization andfacilitates experience sharing.
* Gain strategic advantage: Benchmarking helps organizations focus on capabilities critical to building strategic advantage.
Types of Benchmarking
There are severalclassifications for benchmarking, based on partner type, adoption level and target process, following are the most used types:
* Internal
* External
* Functional
* Competitive* Generic
Internal benchmarking with another department or business unit within the same organization, i.e. searching for the best practices internally.
The main advantages of internal benchmarkingare:
* Access to sensitive data and information is easier..
* Standardised data is often readily available.
* Usually less time and resources are needed.
There may be fewer barriers to...