What is benchmarking?
Benchmarking is the process through which a company measures its practices against its competitors, or those companies recognised as leaders in its industry. Benchmarking can be a company’s best tool for determining whether the organisation is performing efficiently and whether needs to improve.
Benchmarking enables managers to articulate what best practice is, to prioritise opportunities for improvement, to enhance performance relative to stakeholder expectations, and to leapfrog the traditional cycle of change by learning from others in the market. As a result, benchmarking is used in many companies as a tool for obtaining a competitive advantage.
How does it work?
The idea behind benchmarking is to measure performance against an external standard or agreed set of criteria. Benchmarking focuses on company-to-company comparisons of activities or performance. Among many possibilities, it may look at organisational governance, employee issues, approach to environment and sustainability, community participation, technology, reporting and communication and others where appropriate.
Benchmarking helps companies find their market niche and therefore gain competitive advantage.
ACCSR’s benchmarking was fantastic and we couldn’t have got our community grievance mechanism off the ground without it.
Colleen Farley, Commercial Services & Sustainability Officer, Sandfire Resources