BENCHMARKING

Meaning and Definition

 Shoe cobblers originally created the term benchmarking as it refers to them measuring
people's feet for shoes. They would take the customer's foot and place it on a "bench". They
then marked / outline the foot to make a pattern for their shoes.
 Benchmark -- A standard or point of reference used in measuring and/or judging quality or
value. (What)
 Benchmarking is comparing one's business processes and performance metrics to industry
bests and best practices from other companies.
 Benchmarking is a process of measuring the performance of a company’s products,
services, or processes against those of another business considered to be the best in the
industry, aka “best in class.”
 A measurement of the quality of an organization's policies, products, programs, strategies,
etc., and their comparison with standard measurements, or similar measurements of its
peers.
 According to the Construction Industry Institute (CII) – “Benchmarking is the systematic
process of measuring one’s performance against recognized leaders for the purpose of
determining best practices that lead to superior performance when adapted and utilized”.
(CII, 1995)
 According to David T. Kearns (the CEO of Xerox Corporation), Benchmarking is the
systematic and continuous process of evaluating products, services and work practices and
comparing them with those of industry leaders.
 According to ASQ, the benchmarking definition in business 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.

Objectives of Benchmarking

 The overriding purpose in benchmarking is of course to improve the competitive position of

a company.
To determine what and where improvements are called for
 To analyze how other organizations achieve their high performance levels, and
 To use this information to improve performance.

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Benchmarking roadmap

The Benchmarking Process

In general, the benchmarking process consists of four phases, each of which requires the
completion of a number of action steps. The following provides a brief description of these phases
as well as the key questions that need to be addressed in each of these phases.
Phase One: Planning
This phase is designed to develop the plan for conducting the benchmarking investigation. The key
questions that have to be addressed are:
 What is to be benchmarked?
 Who will be the benchmark partners?
 What is the method of data collection?

This phase will form the basis for the entire benchmarking investigation and consequently, every
effort should be made to complete this phase as thoroughly as possible.

Phase Two : Analysis

In this phase, the data collected in the benchmarking study is analysed so as to provide a basis for
comparison. The key questions in this phase are:
 What is the performance of the benchmark partners?
 What is our performance compared to them?
 Why are they better?
 What can we learn from them?
 How can we apply the lessons to our organisation?

Phase Three: Integration

The objective of this phase is to develop goals and integrate them into the benchmarked process
so that significant performance improvements are made, The key questions in this phase are:
 Has management accepted the findings?
 Do our goals need to be modified based on the findings?
 Have the goals been clearly communicated to all involved parties?

Phase Four : Action

In this phase, the action plans needed to achieve the goals decided upon in phase 3 will be
developed. Recalibration of the benchmarks is also a step of this phase. The key questions that
need to be addressed are:
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 Will the plans allow the achievement of the stated goals?
 How will progress be tracked?
 What is the schedule for recalibration of the benchmarks?

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