What Is Benchmarking?

Benchmarking is a tool to help you improve your business processes. Any business process can be benchmarked. It is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help your organization improve its performance.

Benchmarking will help you:

• compare your business's profits with others in the same industry
• see where you can reduce costs and improve efficiency
• forecast the impact of any changes and see how to prepare for growth.

Application of benchmarking involves four key steps:

• Understand in detail existing business processes
• Analyze the business processes of others
• Compare own business performance with that of others analyzed
• Implement the steps necessary to close the performance gap

Benchmarking should not be considered a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with the goal of keeping abreast of ever-improving best practice.