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: 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
- 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
- Benchmarking
- Benchmarking is the process of collecting information regarding the best rated organizational practices and comparing the organizational processes and practices with the same. Benchmarking serves as an effective tool towards enhancing the quality standards within the organization. The paper examines benchmarking and discusses the steps involved in conducting the benchmarking...
- Presentations 2003-01-01
- 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 the continuous, systematic process of measuring organizational products, services, and practices against those that are rated best in the industry. Benchmarking entails collecting information, comparing the same with present organizational standards, analyzing the results, and taking suitable actions. The paper examines different issues involved in benchmarking. The process...
- Presentations 2002-03-01
- 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
- Benchmarking: Borrowed Knowledge
- This article explains about Benchmarking, which is defined, as a means of generating new ideas by learning from others - just might provide the spark you need. It also explains phases of benchmarking model. It has a action plan for implementing benchmarking in an organization. Read on to know more....
- White papers 2003-01-01
- 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
- 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
- Learning Process: Benchmarking
- This paper talks about the different types of benchmarking and the basic purposes for benchmarking. Read on this white paper that outlines briefly six guidelines for benchmarking—Defining precise and manageable process; Deciding on scope; Identifying and studying targets in depth, Creating a casual diagram to enhance performances; Identifying a set...
- Presentations 2003-03-09
- Quality Management: Benchmarking
- Benchmarking is comparing and measuring an organization’s operations or its internal processes against those of a best-in-class company. The process of benchmarking helps in allocating resources. This is a three-step approach wherein the three steps are preparation, execution and post-execution. Identification and proper documentation of strong and weak processes forms...
- Presentations 2003-01-01
- Is Your Benchmarking Doing The Right Work?
- From the executive summary: ‘Experts suggest that if executed well, benchmarking reveals the gaps between the performance of the benchmarker and that of the benchmarked. Hence, it is essential to take care of the non-benchmarked metrics. Benchmarking streamline the key processes of organizations in an efficient manner. Benchmarking can be...
- White papers 2003-09-01
- Best Practices For Benchmarking
- Benchmarking is a popular management tool. It can be defined as a structured approach for identifying the best practices from industry and comparing and adapting them to the organizational operations. Such an approach is aimed at identifying more efficient and effective processes for achieving intended results. The paper provides an...
- White papers 2003-10-27
- Maintenance Benchmarking
- Benchmarking is the continuous, systematic process of measuring organizational products, services, and practices against those that are rated best in the industry. Benchmarking forms the basis for establishing rational performance goals for the organization. The paper discusses the benchmarking process and explores the role of the same in performance management....
- Presentations 2000-05-10
- 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
- Performance Benchmarking
- Benchmarking involves evaluating organizational systems and processes and comparing them against those that are rated best in the industry. Performance benchmarking is the process of benchmarking the organizational performance under five different categories of productivity, research and development, marketing, quality, and costs. It enables the organization to gain sustainable competitive...
- Presentations 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
- Benchmarking
- Benchmarking is the continuous process of measuring products, processes, and systems of an organization against those that are rated best in the industry. It helps in uncovering weaknesses and flaws in the organizational systems, processes, and products. This way, benchmarking, helps in quality measurement and improvement. The paper discusses issues...
- Presentations 2003-01-01
- Benchmarking
- This article provides the answer to the question that how do you know how effective the changes will really be and how do you implement those changes once you figure it out? It suggests benchmarking for this purpose, which is studying the same processes of other more successful companies, and...
- White papers 2003-01-01
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