Comparisons play an important role in the assessment of results as well as in the assessment of work processes. In order that the mediocre is not compared with other mediocre things, the aim is to set the bar high. However, it should not be utopian but rather achievable with top performance.
A specific (and as quantitatively determinable as possible) reference value for a certain partial aspect is called a benchmark, which is regarded as the best achievable result within the comparison spectrum. Benchmarks can be set up for products, services, projects, processes and outputs. The process by which the benchmark can be achieved is called best practice. Benchmarking is a periodically recurring comparison of the services and outputs of a company with the services and outputs that are recorded in the industry (at other companies).
No ranking should be set up. The question of which company is the best overall, the second best and so on takes a back seat in benchmarking. In addition, there should be no company that is superior to the others in all disciplines. Rather, it is about finding out which practices are used by the best in a sub-discipline. The benchmarking is intended to identify best practices in sub-disciplines.
All companies or company departments that take part in such a process should have the advantage of being able to learn later which processes and organizational forms led to the best performance. Benchmarking is therefore more of a procedure for recognizing and developing best practices than a procedure for judging the management, organization and processes of a company as a whole.
A categorization is based on the breadth of the group of comparison partners included. This is how we distinguish between internal and external benchmarking. While the comparison partners are to be found within the same group in internal benchmarking, external partners are used for comparison in the latter case. External companies from the same industry, from another industry or even direct competitors can be selected.
Of course, not all companies in an industry always consent to such a project. It is beneficial if independent research institutions or university institutes assume the function of a neutral juror and collect and process the data from a large number of partner companies and make them available to all participating companies in a suitable, often anonymized manner.
Three key elements of benchmarking are important:
1. Continuous and systematic measurement and comparison of company performance with internal or external partners,
2. Evaluation of the established quantitative results using a reference value (benchmark),
3. Search, adaptation and adoption of best practices.
It has emerged as a practice to entrust an independent body, such as a management consultancy, with the benchmarking. An anonymization of the collected data is possible in some cases, but of course the companies usually know each other so well that conclusions cannot be ruled out. The comparability between different companies is increased by using the same or at least compatible information systems, for example SAP R / 3.