Benchmarking is the process of measuring products, services, and processes against those of organizations known to be leaders in one or more aspects of their operations. Benchmarking provides necessary insights to help you understand how your organization compares with similar organizations, even if they are in a different business or have a different group of customers. Additionally, benchmarking can help you identify areas, systems, or processes for improvements—either incremental (continuous) improvements or dramatic (business process re-engineering) improvements.

According to Management Strategy Consulting firm Bain & Company, 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 Process


Improve Performance

Benchmarking identifies methods of improving operational efficiency and product design


Understand relative cost position

Benchmarking reveals a company’s relative cost position and identifies opportunities for improvement

Gain strategic advantage

Benchmarking helps companies focus on capabilities critical to building strategic advantage

Increase the rate of organizational learning

Benchmarking brings new ideas into the company and facilitates experience sharing.