DEFINITION

 “The continuous process of

measuring products, services, and
practices against the company’s
toughest competitors or those
renowned as industry leaders “
 BENCHMARKING THOUGHTS

“Benchmarking is the practice of being

humble enough to admit that someone
else is better at something and wise
enough to try and learn how to match and
even surpass them at it.”
- APQC, 1998
Why Benchmark
 Identify opportunities to improve
performance
 Learn from others’ experiences
 Set realistic but ambitious targets
 Uncover strengths in one’s own
organization
 Better prioritize and allocate resources
Types of Benchmarking

 Internal benchmarking

 External benchmarking

 Functional benchmarking:
Internal benchmarking
ADVANTAGES:

sharing opinions  Easier to implement

between  Easier to access data
departments
within the same
organisation DISADVANTAGES:

 External ideas blocked

External Benchmarking
Advantages
– Comparison with  Helps to measure
external organisations one’s own
to discover new ideas, performance
methods, products and
services.  Helps to search for
– The gap between best practices
internal and external Disadvantages
practices displays the  Takes time
way where to change
and if there is any  Requires support
need to change.  Legal/ethical isssues
 Industrial espionage
Functional Benchmarking:

Comparative Advantages:
research to seek
world-class  Discovering innovative
excellence by practices
comparing business
performance not Disadvantage:
only against
competitors but also  Not suitable for every
against the best organisation
businesses operating
in different industry
Other Types of Benchmarking

 Product Benchmarking
 Process Benchmarking
 Strategic Benchmarking

How companies compete, identify the winning

strategies that have enable high-performing
companies to be successful in their marketplaces.
 Parameter Benchmarking
When not to Benchmark

 Target is not critical to the core business

functions
 Customer’s requirement is not clear
 Key stakeholders are not involved
 Inadequate resources to carry through
 No plan for implementing findings
 Fear of sharing information with other
organizations
Advantages
 Product and process improvement
 Time and cost reduction
 Competetive strategy
Disadvantages
 What is best for someone else may not
suit you
 Poorly defined benchmarks may lead to
wasted efforts and meaningless results
 Incorrect comparisons