BENCHMARKING

is the process of improving performance by continuously identifying,
understanding, and adapting outstanding practices and processes found inside and outside
an organization (company, public organization, University, College, etc.).
It was pioneered by Xerox Corporation in the 1979s, as part of their response to
international competition in the photocopier market, and originated from reverse
engineering of competitors' products. Its scope was then enlarged to include business
services and processes. Xerox now benchmarks nearly 240 performance elements
although, when they started benchmarking several years ago, considerably fewer
elements were benchmarked.
Benchmarking of business processes is usually done with top performing companies in
other industry sectors. This is feasible because many business processes are essentially
the same from sector to sector.
Benchmarking focuses on the improvement of any given business process by exploiting
"best practices" rather than merely measuring the best performance. Best practices are the
cause of best performance. Companies studying best practices have the greatest
opportunity for gaining a strategic, operational, and financial advantage.
The systematic discipline of benchmarking is focused on identifying, studying, analysing,
and adapting best practices and implementing the results. To consistently get the most
value from the benchmarking process, senior management may discover the need for a
significant culture change. That change, however, unleashes benchmarking’s full
potential to generate large paybacks and strategic advantage.
The benchmarking process involves comparing one’s firm performance on a set of
measurable parameters of strategic importance against that of firms’ known to have
achieved best performance on those indicators. Development of benchmarks is an
iterative and ongoing process that is likely to involve sharing information with other
organizations working with them towards an agreeable metrology.
Benchmarking should be looked upon as a tool for improvement within a wider scope of
customer focused improvement activities and should be driven by customer and internal
organization needs. Benchmarking is the practice of being humble enough to admit that
someone else is better at something and wise enough to learn how to match and even
surpass them at it.
1.2 Objectives of the Technique
Benchmarking entails gathering information from one organization to beneficially apply
it to another organization. The scope is to improve the processes performed at the
recipient organization by applying efficient work processes (work done by people,
equipment and information systems). It is a valuable Business Engineering Technique
and its application not only identifies innovative work processes but also involves
discovering the thinking behind innovation.