The Role of Benchmarking in Comparing and Improving Organisation Performance

---

1. What is BENCHMARKING?

Benchmarking is the act of comparing how basic functions and processes in the organisation's value chain are carried out in comparison to those in other organisations, in order to ascertain how well (or otherwise) the company performs in relation to its rivals. Comparisons may be made on both cost and effectiveness. For example: an organisation might choose to compare:

• the costs of performing a certain processes or procedures
• how items are purchased or sold
• how inventories are managed
• lead times between orders and delivery
• how recruitment and training is carried out

The aim is to identify the best practices in carrying out activities and to learn how other companies have achieved the results they have, in order to improve the organisation's own competitiveness. For example: two organisations have established a code of practice for all individuals and organisations involved in benchmarking, in an attempt to reduce improper practices in this area. The code of practice suggests that practitioners should adhere to the following Dos and Do Not’s, shown in Figure 15:

2. What is the purpose of BENCHMARKING?

Benchmarking is the act of comparing how basic functions and processes in the organization's value chain are carried out in comparison to those in other organizations, in order to ascertain how well (or otherwise) the company performs in relation to its rivals. The aim also is to identify the best practices in carrying out activities and to learn how other companies have achieved the results they have, in order to improve the organization's own competitiveness.

3. What other sources can be used in benchmarking, if the competitor is unwilling to enter into a BENCHMARKING exercise?

Information may be obtained from a variety of sources:

• published reports
• information published on the Internet
• trade groups
• industry analysts
• research groups
• customers
• suppliers
• etc

---

Reference(s)
	Book		Chaffey, D. & Wood, S. (2004) Business Information Management: Improving Performance Using Information Systems. Financial Times Prentice Hall: United Kingdom (UK), England, Essex, Harlow. [ISBN: 9780273686552]. [Available on: Amazon: https://amzn.to/3yZ6vdF].
	Book		Laudon, K. C. & Laudon, J. P. (2007) Management Information Systems: Managing the Digital Firm. 10th Edition. Pearson Prentice Hall: United States of America (USA), New Jersey (NJ), Bergen, Upper Saddle River. [ISBN: 9780132415798]. [Available on: Amazon: https://amzn.to/3UhgqDH].
	Book		Porter, M. E. (1985) Competitive Strategy: Techniques for Analyzing Industries and Competitors. The Free Press: United States of America (USA), New York (NY). [ISBN: 9781416590354]. [Available on: Amazon: https://amzn.to/3DwGgxR].

---

Reference (or cite) Article
	Kahlon, R. S. (2013) The Role of Benchmarking in Comparing & Improving Organisation Performance [Online]. dkode: United Kingdom, England, London. [Published on: 2013-01-20]. [Article ID: RSK666-0000067]. [Available on: dkode | Ravi - https://ravi.dkode.co/2013/01/the-role-of-benchmarking-in-comparing.html].

---