Types of Benchmarking
There are a number of different types of
benchmarking, as summarized below:
Type
|
Description
|
Most Appropriate for the Following Purposes
|
Strategic Benchmarking
|
Where businesses need to improve overall
performance by examining the long-term strategies and general approaches that
have enabled high-performers to succeed.
It involves considering high level aspects such
as core competencies, developing new products and services and improving
capabilities for dealing with changes in the external environment.
Changes resulting from this type of benchmarking
may be difficult to implement and take a long time to materialize
|
Re-aligning business strategies that have become
inappropriate
|
Performance or Competitive Benchmarking
|
Businesses consider their position in relation to
performance characteristics of key products and services.
Benchmarking partners are drawn from the same
sector. This type of analysis is often undertaken through trade associations
or third parties to protect confidentiality.
|
Assessing relative level of performance in key
areas or activities in comparison with others in the same sector and finding
ways of closing gaps in performance
|
Process Benchmarking
|
Focuses on improving specific critical
processes and operations. Benchmarking partners are sought from best
practice organizations that perform similar work or deliver similar services.
Process benchmarking invariably involves
producing process maps to facilitate comparison and analysis. This type of
benchmarking often results in short term benefits.
|
Achieving improvements in key processes to obtain
quick benefits
|
Functional Benchmarking
|
Businesses look to benchmark with partners drawn
from different business sectors or areas of activity to find ways of
improving similar functions or work processes. This sort of benchmarking can
lead to innovation and dramatic improvements.
|
Improving activities or services for which
counterparts do not exist.
|
Internal Benchmarking
|
Involves benchmarking businesses or operations
from within the same organization (e.g. business units in different
countries). The main advantages of internal benchmarking are that access to
sensitive data and information is easier; standardized data is often readily
available; and, usually less time and resources are needed.
There may be fewer barriers to implementation as
practices may be relatively easy to transfer across the same organization.
However, real innovation may be lacking and best in class performance is more
likely to be found through external benchmarking.
|
Several business units within the same organization
exemplify good practice and management want to spread this expertise quickly,
throughout the organization
|
External Benchmarking
|
Involves analyzing outside organizations that are
known to be best in class. External benchmarking provides opportunities of
learning from those who are at the "leading edge".
This type of benchmarking can take up significant
time and resource to ensure the comparability of data and information, the
credibility of the findings and the development of sound recommendations.
|
Where examples of good practices can be found in
other organizations and there is a lack of good practices within internal
business units
|
International Benchmarking
|
Best practitioners are identified and analyzed
elsewhere in the world, perhaps because there are too few benchmarking
partners within the same country to produce valid results.
Globalization and advances in information
technology are increasing opportunities for international projects. However,
these can take more time and resources to set up and implement and the
results may need careful analysis due to national differences
|
Where the aim is to achieve world class status or
simply because there are insufficient “national" businesses against
which to benchmark.
|
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