Overview | Benchmarking improves performance by identifying and applying best-demonstrated practices to operations and sales.  Managers compare the performance of their products or processes externally with those of competitors and best-in-class companies, and internally with other operations that perform similar activities in their own firms. The goal of Benchmarking is to find examples of superior performance and understand the processes and practices driving that performance. Companies then improve their performance by tailoring and incorporating these best practices into their own operations—not by imitating, but by innovating.

Methodology | Benchmarking involves the following steps:
1. Select a product, service or process to benchmark;
2. Identify the key performance metrics;
3. Choose companies or internal areas for improvement;
4. Collect data on performance and practices;
5. Analyze the data and identify opportunities for improvement;
6. Adapt and implement the best practices, setting reasonable goals and ensuring company-wide acceptance.

Application | Companies use Benchmarking to:
Improve performance – identify methods of improving operational efficiency and product design.
Understand relative cost position – reveal a company’s relative cost position and opportunities for improvement.
Gain strategic advantage – help companies focus on capabilities that are critical to building a strategic advantage.
Increase capacity for organizational learning – bring new ideas into the company and facilitate knowledge sharing.