Benchmarking is comparing one’s business processes and performance metrics to the industry’s best and best practices from other companies. Factors typically measured are quality, time and cost.
Benchmarking helps organisations to identify the best firms in their industry where similar processes exist and compare the results and processes of those studied (the targets) to one’s own results and processes. This enables them to learn how well the targets perform and more importantly the business process that explains why these firms are successful.
Benchmarking is vital to organisations as it is a tool for continuous improvement against industry’s best.