Benchmarking is a technique that uses specific industry standards to make comparisons between different organizations or different segments of the organizations, with the intent of improving a product or service.
Benchmarking compares your organization’s operations and processes to other organizations within your industry. The intent of benchmarking is to identify gaps in your organization’s processes and performance in order to identify areas of improvement.
There are different types of benchmarking, including internal benchmarking which is used to examine and share best practices across an organization, competitive benchmarking (also known as strategic benchmarking), which is used to evaluate a business’s position within an industry, and performance benchmarking, which involved gathering and comparing quantitative data.
Benchmarking data is usually the first step organizations take to identify performance gaps, before making continuous improvements to processes and performance. Organizations that leverage benchmarks successfully should note improved performance.