The continuous process of measuring our products, service and business practices against the toughest competitors and those companies recognized as industry leaders.(Xerox definition of benchmarking)The process known as benchmarking is quite straightforward to explain but is extraordinarily difficult to conduct successfully in practice. The reason for including this chapter is that benchmarking or comparison lies at the heart of performance measurement.As with many approaches to improving performance, benchmarking has its enthusiasts and its detractors. There is no doubt that, conducted sensibly, a benchmarking project can be benefit to an organization, not least because it forces the participants to look closely at their own organization's processes and question them.It is worth sounding a note of caution at this stage. I benchmarking partners need to be chosen carefully because no two organizations are exactly alike. This may sound obvious but it is remarkable just how different organizations are even when they are engaged in the same business, never mind a completely different industry. This lends to lead to the participants having to examine generic areas of operations, which can dilute the power of the exercise.Another point to note is that benchmarking partners may, for their own reasons, not be strictly open and honest with others involved in the exercise. For example, competitors would fit into this category. All information derived from the process should be carefully weighed and considered in the light of corroborative evidence. Do not take everything as the absolute truth as it could send your organization off on a path that is not fruitful.It is worth pointing out that some detractors suggest that benchmarking only serves to make the organization aspire to be average rather than to lead the field. This may be true in certain areas of the business but it is also the case that organizations can learn from one another, and benchmarking is one way of facilitating this learning process.Benchmarking by definition forces an organization to change its focus from the internal to the external environment by attempting to compare its performance with that of the best — in — class companies.Why should an organization engage in benchmarking?The simple answer is to remain competitive. Institutionalized benchmarking leads to the organization having a better understanding of its competitive environment and its customers' needs. Table 25. 1 neatly sums up the main reasons for benchmarking.

name Benchmarking