What Is Benchmarking?
Benchmarking is when one company compares itself to other companies in an effort to identify areas that need improvement.
In general, it is defined as a process of identifying the best possible practice and executing this knowledge.
The company will analyze certain factors in its own operations and compare these factors to those of top-ranking companies as a means of improving its own productivity and success.
Many companies will look into their own field when benchmarking, but it does not have to occur within the same niche.
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As long as two companies use similar processes, benchmarking can occur.
Collaborative benchmarking will occasionally take place, which involves more than one company working together to analyze the practices of others.
What Are the Objectives of Benchmarking?
1. To determine where the company can improve. By doing an in-depth analysis of the company’s daily operations and productivity, areas which are not operating at peak performance are singled out.
2. To improve performance by taking cues from companies that are functioning at a higher level. An invaluable benefit to benchmarking is the ability to look into the practices of other similar businesses that are more successful in the areas where the initial company is lacking.
3. Another objective to benchmarking is the learning experience. Not only does the company reap the benefits of analyzing other business practices, but executives within the company receive information that can be used in future ventures.
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