Benchmarking

Benchmarking is the process of determining who or what is the very best in a certain area. It also encapsulates who sets the standard, and what that standard is. This strategic management method aims at improving performance and practices within an organization. For example, in the 1990s, the Chicago Bulls were a benchmark for champions in the NBA. In business, it's who the best customer service organization, what company has the best training program, and how the standard is calculated.

First, you have to decide what to benchmark. Next you would begin determining how to measure the selection, and then find out how the "benchmarker" got to be the best of the best. Lastly, you would figure out how to apply the benchmarked concepts and actions to your own endeavors. Normally, there is more to just the benchmarking; there is a larger effort at hand, such as re-engineering or improvement of the quality and efficiency of an area.

Benchmarking really is an innovative concept that began taking grasp in the business world in the 1990s. This genius idea began in the manufacturing world, but has since migrated into the business and management world. Benchmarking can be applied to nearly every situation, and in every area of the world, whether it is financial advising on Wall Street in New York City, or fielding grain in a rice patty in Cambodia.

Through benchmarking, organizations are opened up to new methods, ideas, and tools to improve their efficiency and effectiveness. Benchmarking helps break down walls of resistance to change by proving other methods of problem solving because they are being used by others. Competitive benchmarking is a popular strategy in benchmarking, which involves using a standard of comparison against the competition when assessing performance.

Another form of benchmarking is collaborative benchmarking. An example of this would be the Xerox Corporation, where the individual company evaluated a group of their subsidiaries of Xerox in different countries. This allowed Xerox to see which subsidiary was running the most efficiently and effectively, and then they applied those methods to the rest of the company.

There are several things that need to be done in order to successfully complete a benchmarking project. First, an organization needs to identify their problem areas. Since benchmarking can be utilized by anyone, any organization, or any function, then a variety of research techniques must be used to determine the needs of the company (a.k.a. a needs assessment).

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