Benchmarking is the process of identifying "best practice" in relation to both products (including) and the
processes by which those products are created and delivered. The search for "best practice" can take place
both inside a particular industry, and in other industries (for example - are there lessons to be learned from
The objective of benchmarking is to understand and evaluate the current position of a business or
organisation in relation to "best practice" and to identify areas and means of performance improvement.
The Benchmarking Process
Benchmarking involves looking outward (outside a particular business, organisation, industry, region or
country) to examine how others achieve their performance levels and to understand the processes they use.
In this way, benchmarking helps explain the processes behind excellent performance. When the lessons
learnt from a benchmarking exercise are applied appropriately, they facilitate improved performance in
critical functions within an organisation or in key areas of the business environment.
Application of benchmarking involves four key steps:
(1) Understand in detail existing business processes
(2) Analyse the business processes of others
(3) Compare own business performance with that of others analysed
(4) 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
Types of Benchmarking
There are a number of different types of benchmarking, as summarised below: