BNET Business Dictionary
Business Definition for: Benchmarking
- a systematic process of comparing the activities and work processes of an organization or department with those of outstanding organizations or departments in order to identify ways to improve performance. Benchmarking was first developed by the Xerox Corporation in the late 1970s in order to learn from the achievements of Japanese competitors and was described by a Xerox manager, Robert C. Camp, in his book Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance (1989). The use of benchmarking has become widespread and individual organizations have developed distinct approaches toward it. Benchmarking programs commonly include the following stages: identifying the area requiring benchmarking and the process to use, collecting and analyzing the data, implementing changes, and monitoring and reviewing improvements. Benchmarking is used in business appraisal, often as part of a total quality management or business process reengineering program.
Types of benchmarking include internal benchmarking, a method of comparing one operating unit or function with another within the same industry; functional benchmarking, in which internal functions are compared with those of the best external practitioners of those functions, regardless of the industry they are in; competitive benchmarking, in which information is gathered about direct competitors, through techniques such as reverse engineering; and strategic benchmarking, a type of competitive benchmarking aimed at strategic action and organizational change.
- the establishment, through data gathering, of targets and comparators, through whose use relative levels of performance (and particularly areas of underperformance) can be identified. By the adoption of identified best practices it is hoped that performance will improve.
There are various types of benchmarking. Internal benchmarking is a method of comparing one operating unit or function with another within the same industry. Functional benchmarking compares internal functions with those of the best external practitioners of those functions, regardless of the industry they are in (also known as operational benchmarking or generic benchmarking). Competitive benchmarking gathers information about direct competitors, through techniques such as reverse engineering. Strategic benchmarking is a type of competitive benchmarking aimed at strategic action and organizational change.
Additional Resources
- Benchmarking bolsters quality at Texas Instruments. (includes information on benchmarking books and the International Benchmarking Clearinghouse)
- "Benchmarking is a quality tool, not a buzzword for the 90s," states Texas Instruments' benchmarking champion, Laura Longmire. Exemplifying the power of benchmarking as a quality tool, Texas Instruments' Defense Systems & Electron "Benchmarking is a quality tool, ...
- Research articles 1993-03-01
- Benchmarking: Understanding the Basics
- It is often stated that those who benchmark do not have to reinvent the wheel (Parker, 1996). By following others one can make improvements and not focus on stale ideas. Benchmarking at first glance may be mistaken for a copycat form of developing strategic plans and for making improvements within...
- White papers 2001-11-21
- The Continuing Value of Benchmarking
- The frequent use of terms such as benchmarking in business circles have led to the development of ineffectual buzzwords. Like total quality management TQM and reengineering, benchmarking has become a too-familiar term. Yet, for any organization concerned with cutting costs, increasing productivity, inspiring innovation, or generally achieving new heights of...
- White papers 2003-01-01
- "Benchmarking - Uncovering Best Practices and Learning from Others
- The article discusses on different statements provided by experts, one of them is "Competitor and customer benchmarks may be the most underused motivators in the management's administrative tool kit". Benchmarks and benchmarking provide you with data to show you what can be achieved. Perhaps more important, benchmarking can tell you...
- White papers 2003-01-01
- Impact Of The New Economy On Benchmarking
- From the executive summary: ‘As businesses, markets, and business processes change, benchmarking continues to be a valuable and beneficial tool for organizations to ensure success. A few of benefits benchmarking can afford an organization include more efficient and effective processes, better and faster decision making, better products, more efficient and...
- White papers 2001-01-01
- Benchmarking Your Medical Practice
- Benchmarking comes in two forms: internal and external. Internal benchmarking is the process of comparing the current state of one's practice against historical performance. Internal benchmarking can also help create progressive goals towards longer term objectives as bottlenecks, unnecessary expenses, etc., are defined. External benchmarking compares one's practice against the...
- White papers 2006-02-20
- Company Benchmarking for Competitive Advantage
- Before undertaking a benchmarking study a company must be aware of the different types of benchmarking that exist. One of the major reasons for misunderstanding is the tendency to call a wide variety of different activities benchmarking. The most simplistic form of benchmarking could be one person talking to another...
- White papers 2004-09-22
- Generic Environment for Full Automation of Benchmarking
- Regression testing is an important part of software quality assurance. The authors work to extend regression testing to include regression benchmarking, which applies benchmarking to detect regressions in performance. Given the specific requirements of regression benchmarking, many contemporary benchmarks are not directly usable in regression benchmarking. To overcome this, the...
- White papers 2004-06-30
- The Benchmarking Code of Conduct
- "This article is mainly about benchmarking code of conduct. Benchmarking—the process of identifying and learning from best practices any where in the world—is a powerful tool in the quest for continuous improvement and breakthroughs. To guide benchmarking encounters, to advance the professionalism and effectiveness of benchmarking, and to help...
- White papers 2003-01-01
- Benchmarking
- Benchmarking is a topic of general interest in quality management. Benchmarking is a popular method for developing requirements and setting goals. In more conventional terms, benchmarking can be defined as measuring your performance against that of best-in-class companies, determining how the best-in-class achieve those performance levels, and using the information...
- White papers 2001-01-01
- High-Velocity Benchmarking
- "Benchmarking initiatives, which once took months, are now moving more quickly to keep up with the dot-com world. Web-based benchmarking data abounds, but the big hurdle remains speedy implementation of results. At a time when companies are protective of their new e-business models, benchmarking remains a remarkable tool.Adopting a benchmarking...
- White papers 2000-01-01
- Macro-Benchmarking: An Industry Perspective
- Benchmarking has been a popular management practice for almost two decades. The process was less formal than the process described in the benchmarking books and articles during the 1980s and early 1990s. However, the intent of both the formal and informal benchmarking activity was to identify and migrate best practice...
- White papers 2003-01-01
- The Search for Best Practices: An introduction to the process of benchmarking
- Benchmarking is one of a number of advanced quality improvement methodologies which may be integrated into a Total Quality Management system as it matures. It is the search for best practices that will lead to superior performance in some business activity. It can enable quality improvement efforts to reach new...
- White papers
- Industry Benchmarking : Learning from the Past to Plan for the Future
- Article talks about the industry benchmarking. Associations can avoid the mistakes and build on the success of others by comparing their members and themselves to other, often very different professions, industries and organizations. Industry benchmarking helps how one evaluate changes within the industries or markets in a timely fashion. Unlike...
- White papers 2003-01-01
- What is Benchmarking?
- Benchmarking is the process of identifying, sharing, and using knowledge and best practices. It focuses on how to improve any given business process by exploiting topnotch approaches rather than merely measuring the best performance. Finding, studying and implementing best practices provides the greatest opportunity for gaining a strategic, operational, and...
- White papers 2003-01-01
- Maturity: Boosting Returns On Benchmarking Investments
- By providing decision support based on real-world best practices, benchmarking continues to play an important role in strategic management. However, benchmarking must be conducted with thorough understandings of the benchmarking process and of the process being studied. The benchmarking process can be facilitated by promoting several underlying conditions in the...
- White papers 2003-01-01
- Benchmarking for Improving Entrepreneurship Policies: Collaborative Learning With the Best Performers
- This article is about benchmarking; the process of learning from best practice. The concept of benchmarking is mostly adapted among firms and has been an acknowledged method in this context. However, benchmarking has recently been a tool for policy advisors to use in order to create policies that supports economical...
- White papers 2004-06-24
- All Benchmarkers Now?: Benchmarking and the 'Europeanisation' of Industrial Relations
- This paper traces the origins of benchmarking as a management tool, before going on to specify the role that benchmarking is playing at the three principal levels of the EU: the Euro-company, the EU sector and the Community itself. The reasons why benchmarking has become so prominent as a 'quasi...
- White papers 2002-02-20
- A New Approach to Assessing Benchmarking Progress
- "Once an organization sets a benchmarking initiative in motion, it likely will focus activities and energy on the task at hand: to identify improvement opportunities and actualize change. However, an emphasis on benchmarking project work can over shadow the need for periodic reviews of the initiative. To understand...
- White papers 2001-05-01
- Benchmarking:Out-of-the-Box
- This article is basically about benchmarking which is also called "benchmarking outside-the-box". Benchmarking is defined as: "the process of identifying, understanding, and adapting outstanding practices and processes from organizations anywhere in the world to help organization improve its performance. It is not only competitive analysis or"number crunching," nor is...
- White papers 1994-05-01
