Page 1 of 43Benchmarking is the most effective and widely used way for companies of all sizes to improve performance and gain a critical advantage. Every organisation can learn and improve its business performance, no matter how strong its business model or end-of-year results. Even confirmed global leaders such as Xerox, Starbucks, and PepsiCo confirm the importance of benchmarking to staying one step ahead of their competition.
In This Report
The DefinitionBenchmarking is a process to identify and implement best, better or new practices, with the objective of providing greater stakeholder value and obtaining a competitive advantage. It is a way of discovering the best performance and practices of other organisations, and then learning, adapting, creating, and implementing high-performing practices to produce superior performance results.
The StageTo stay competitive, organisations are constantly on the lookout for new tools, methods, and approaches to improve their performance. Whether it is through strategy, systems, functions, processes, products or services, benchmarking is one of the most effective ways of improving performance.
Research consistently shows benchmarking to be one of the most effective and widely used management tools. It enables organisations to innovate and reduce costs without having to reinvent the wheel. Benchmarking uses a structured and systematic process; it facilitates the identification of best practices from other organisations, and serves as a vehicle for continuous improvement and breakthrough thinking. Once these best practices have been identified, organisations can adapt them to suit their needs. This significantly enhances performance levels and increases productivity.
There are many forms of benchmarking, and the sheer number of models, approaches and classifications can be confusing. Fortunately, there is now a significant body of academic papers on the subject. There can be anywhere from four to 32 steps (or stages) of benchmarking, depending on the level of detail of the methodology. However, the generic steps are similar in nature. These are covered in the main body of this report.
Make no mistake, benchmarking is here to stay. In fact, its popularity is expected to grow as information about best practices becomes more readily available, and its effectiveness in global key agendas is more widely understood. This is especially true for areas relating to innovation, cost cutting, and the reduction of complexity.
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