Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice (Wikipedia 2009).

Benchmarking Levels

  1. Internal Benchmarking - Comparing a process in one function with that of another function or comparing the same function across locations.
  2. Competitive benchmarking - Comparing with direct competitors, either locally, nationally or worldwide. The organization may not be viewed as a direct competitor when comparing with other organizations outside the local market area.
  3. Functional benchmarking - Comparing processes to other organizations with similar processes in the same function, but outside the industry.
  4. Generic benchmarking - Finding organizations that have best in class processes and approaches from which one may learn and translate to improvements at one's own organization.

Steps in Benchmarking

  1. Review, refine and define existing processes to be benchmarked
  2. Determine what to benchmark
  3. Form a benchmarking team
  4. Identify benchmark partners
  5. Collect and analyze benchmarking information
  6. Evaluation organization's performance versus benchmark partner
  7. Determine how upgrading practices will impact the organizations
  8. Establish new strategic targets
  9. Implement improvements and a system to monitor progress
  10. Do it all over again