Benchmarking

Is about setting a standard for a business, or part of a business, based on the achievement of other businesses or part(s) of a business, with a view to judging a business’s own performance against others. Put more simply, benchmarking is about comparing how one business, or part of a business, is doing in relation to another. It can be external, involving comparisons with competitors or other industries, or internal, involving other areas of the same business, to judge and set standards of performance. It should not just be about recording and displaying measures of performance. It should involve investigating reasons for high performance and using this information to improve areas where performance is low. It is by no means a one-off exercise. It should be a continual loop-back process, with a firm constantly assessing its performance against others. It can ultimately help a business to become more profitable and more competitive.