Benchmarking is a systematic and analytical examination of a company's practices.  As the definition implies, benchmarking is not a one shot procedure.  Benchmarking involves many aspects of an organization's operation.  It is a useful tool in the assessment of processes (the "how" of a business) as well as end products and services (the "what" of a business).  By investigating both, valuable information is gained to help organizations improve.

Once the exemplary products, services and practices are analyzed, the organization then decides how to best make use of the findings.  It's important to point out that benchmarking means more than copying the best .  It's an active process of integrating best practices within the organization's operating context.

Three types of benchmarking are used:

• Internal benchmarking
• Competitive benchmarking
• Functional benchmarking

Because organizations are in a state of constant change, the on-going practice of benchmarking is an absolute necessity.  A company may incorporate one or all three styles of measurement: internal, competitive or functional.   To begin, a business must ask the question, "What is right for us?" and begin with the type of benchmarking that best meets the priority needs.

"Benchmarking is the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized
as industry leaders."

David T. Kearns
CEO, Xerox Corporation