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Benchmarking is the practice of a business comparing key metrics of their operations to other similar companies.
There are two primary types of benchmarking:
Internal benchmarking: comparison of practices and performance between teams, individuals or groups within an organization
External benchmarking: comparison of organizational performance to industry peers or across industries
Companies use benchmarking as a way to help become more competitive. By looking at how other companies are doing, they can identify areas where they are underperforming. Companies are also able to identify ways that can improve their own operations without having to recreate the wheel. They are able to accelerate the process of change because they have models from other companies in their industry to help guide their changes.
