Bench Marking

February 14, 2011


This is a systematic process of critically evaluating the best performance in the market in order to improve the organizational performance.

The objective is to generate a competitive advantage by improving by exiting process.

The benchmarking can be divided into 2

  1. Internal Benchmarking
  2. External Benchmarking

Internal Benchmarking

The internal benchmarking can be divided further into 2

        I.            Functional benchmarking

This is where to identifying the best function within the organization and improving the other function in order to the higher level of performance


Comparing the marketing department performance with financial department performance this will help to developed performance.

      II.            Activity Benchmarking

This is to identifying very successful activity and improving the other activities to in order to achieve higher level of performance.

These are commonly used in a project comparison

External benchmarking

The external Benchmarking also can be divided into 2

        I.            Competitive benchmarking

This is where to identifying the best organization in the business and evaluating the process to developed the company’s performance into a higher level.

This will help the organizations to learning from the competitor performance.

      II.            Strategic benchmarking

This is systematic process of identifying the best practices irrespective of the industry in order to improve the exiting process.

This will help the company to learn good things from the other best practices companies to develop.

Process of Benchmarking

  1. Top management support and strategies
  2. Identifying the specific activity or process to benchmarks
  3. Identifies the types of benchmarking
  4. Identifies the specific best practices
  5. Identifies the gaps between the best practices and the company
  6. Developed strategies to reach the highest level
  7. Allocate the responsibility to implement best practices
  8. Evaluate the performance
  9. Monitoring and control the performance

Advantages of Benchmarking

  1. This will help the organization to identifies the current position in markets
  2. Help to developed a future strategies and objectives
  3. Provide a direction for decision making
  4. Improve the overall standards within the organizations
  5. Help to identifies the customer needs
  6. Improve the new practices

Limitations of Benchmarking

  1. Fully emphasis on the past success
  2. He data’s may be manipulated
  3. The benchmarking activity is an uncertainty
  4. Will take time to identifies the best practices in market
  5. May lead to ignore the customers requirements
  6. Limits the innovations and creativities
  7. Will take long time to implement.

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