What is bench-marking? definition and meaning

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 within their own firms that perform similar activities.

The objective of Benchmarking is to find examples of superior performance and to 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.

Benchmarking is a process in which an organization compares and assess its performance with its competitors.Three different kinds of benchmarking exist

1)Historic Benchmarking:In this process compares current results with past results quantitative or qualititative

2)Industrial Benchmarking: In this process business compares its results or data with its competitors in Industry

3)Best Inclass Benchmarking:In this process business compares its with top performing organization not necessarily same industry.A department function is compared to other top performing organization serving same function