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What is benchmarking?

Benchmarking is a strategic and analytical process of continuously measuring an organization's products, services and practices against a recognized leader in the studied area for the purpose of improving business performance.

Benchmarking and Best Practices

OQM will identify and publish best practices in public and private sector services that are relevant to ORS divisions and branches. We will also identify and publicize ORS "best practices" through our web page. Through sharing with other organizations we will seek to identify and incorporate practices that will contribute to better performance. OQM can also facilitate benchmarking studies for ORS divisions pursuing their goal of providing excellent services to their customers. These studies will be characterized by objective comparisons of performance. In other words, OQM will make sure that the variables under study are comparable in nature and scope

Why should we use benchmarking?

Benchmarking can greatly enhance an organization's performance.

Reasons why organizations benchmark:

  • To forecast industry trends - Because it requires the study of industry leaders, benchmarking can provide numerous indicators on where a particular business might be headed, which ultimately may pave the way for the organization to take a leadership position
  • To discover emerging technologies - The benchmarking process can help leaders uncover technologies that are changing rapidly, newly developed, or state-of-the-art.
  • To stimulate strategic planning - The type of information gathered during a benchmarking effort can assist an organization in clarifying and shaping its vision of the future
  • To enhance goal setting - Knowing the best practices in your business can dramatically improve your ability to know what goals are realistic and attainable.
  • To maximize award-winning potential - Many prestigious award programs, such as the Malcolm Baldridge National Quality Award Program, the federal government's President's Quality Award Program, and numerous state and local awards recognize the importance of benchmarking and allocate a significant percentage of points to organizations that practice it.
  • To comply with Executive Order #12862, "Setting Customer Service Standards" - Benchmarking the customer service performance of federal government agencies against the best in business is one of the eight action areas of this Executive Order.

What part of my organization should I select for benchmarking?

To identify where in your organization you can start benchmarking:

  • Review goals and objectives of your organization's strategic plan
  • Identify your organization's significant processes
  • Identify new customer needs

Types of Benchmarking:

  • Internal benchmarking is a comparison of a business process to a similar process inside the organization.
  • Competitive benchmarking is a direct competitor-to-competitor comparison of a product, service, process or method.
  • Functional benchmarking is a comparison to similar or identical practices within the same or similar functions outside the immediate industry.
  • Generic benchmarking broadly conceptualizes unrelated business processes or functions that can be practiced in the same or similar ways regardless of industry.

(The Benchmarking web page was adapted from the Department of the Navy Benchmarking Handbook)