Meaning of Benchmarking

Benchmarking is a concept that is not part of the dictionary of the DigoPaul. It is a notion that is used in the fields of finance and computer science for a technique to make comparisons and measure returns.

Benchmarking is a process that is developed in a systematic way for the evaluation of work mechanisms, services and products through comparisons. Its purpose is to provide data of interest for decision making, allowing companies to identify which are the success stories and thus be in a position to perfect their strategies.

It can be said that benchmarking consists of obtaining useful information that is then used to improve processes. The practice begins with measuring the results of other successful companies. Then the path followed to achieve these results is analyzed and finally the information is used for the firm itself to establish its strategies and objectives.

It is important to note that benchmarking does not imply copying, but is based on learning. It is about improving one’s efficiency from the study of the experience of successful actors. Benchmarking can be based on the study of competitors (direct or indirect) or of companies from other sectors. Even in the largest corporations, internal benchmarking can be developed, studying their different departments or areas.

Specifically, based on this term, we can establish that there are clearly three types of benchmarking:
-The internal one, which we have already mentioned and which is defined by being the one carried out within the company itself. As a general rule, it is undertaken in large companies composed of different types of departments.
-The competitive one. This is defined because the objective is established to be able to measure what are the products, services, functions and even the processes of competitors. In this way, the results obtained will be compared with the company that carries out the benchmarking work and thus it will be possible to know what improvements it has to make. It is perhaps the most complex type of all.
-The functional one, whose objective is to proceed to identify what are the best practices carried out by a company that has become excellent within the area to be improved. In this way, the company that does not have to belong to the same sector as the one who performs the benchmarking will serve as a benchmark and that also has to be a competitor.

In addition to all the above, we cannot ignore the fact that the process or the implementation of the benchmarking tool involves undertaking each and every one of the stages that shape it. Specifically, we are referring to the following: planning, data collection, analysis, action, monitoring and improvement.

There are numerous internationally known companies that, at some point, have carried out a benchmarking process. This would be the case, for example, of Starbucks.

In the field of computer science, benchmarking consists of comparing the result after the execution of one or more computer programs on a computer, analyzing the performance of specific elements in order to make the comparison on other similar computers.