benchmarking

Mktg

a systematic process of comparing the activities and work processes of an organization or department with those of outstanding organizations or departments in order to identify ways to improve performance. Benchmarking was first developed by the Xerox Corporation in the late 1970s in order to learn from the achievements of Japanese competitors and was described by a Xerox manager, Robert C. Camp, in his book Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance (1989).The use of benchmarking has become widespread and individual organizations have developed distinct approaches toward it. Benchmarking programs commonly include the following stages: identifying the area requiring benchmarking and the process to use, collecting and analyzing the data, implementing changes, and monitoring and reviewing improvements. Benchmarking is used in business appraisal, often as part of a total quality management or business process reengineering program.

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Types of benchmarking include: internal benchmarking, a method of comparing one operating unit or function with another within the same industry; functional benchmarking, in which internal functions are compared with those of the best external practitioners of those functions, regardless of the industry they are in; competitive benchmarking, in which information is gathered about direct competitors, through techniques such as reverse engineering; and strategic benchmarking, a type of competitive benchmarking aimed at strategic action and organizational change.