Benchmarking

Benchmarking is the systematic comparison of performance, processes, products or results with a suitable reference value. This can be another organization, an industry standard, best known practice or your own historical result. The aim is not only to find the difference but to identify opportunities for improvement.

How benchmarking works

First, the area and indicators that can be meaningfully compared are defined. This is followed by choosing a relevant benchmark, collecting data, aligning the methodology and evaluating the differences. Results must be interpreted with regard to the size of the organization, conditions, definitions and data availability.

Internal and external benchmarking

Internal benchmarking compares, for example, branches, teams or periods within one organization. External benchmarking works with data from other organizations or industry references. External comparison can be difficult because of different methodologies or limited data availability.