Benchmarking is when a company compares a business process and performance to another in the industry or best practice from other companies. This process can be done internally if you want to compare performance with groups or teams within the organization. It can also be done externally to compare performance with companies in specific industries or in different industries. Benchmarking is very useful for firms because it helps an organization to understand its strengths and weaknesses. It will help to meet the needs of the customers by establishing new standards and goals. It will help the organization improve their competitive advantage. It can motivate employees to reach new standards and goals for different departments or the organization as a whole. You can find companies that have similar processes and use this information to determine a best practice for your organization.
I dont feel that benchmarking is just a fad. I think it is a good plan for organizations to ensure they meet the goals and standards for that organization. It can improve productivity and be a strategic management tool to help increase the growth and potential for the organisation.
Benchmarking is best to be used by companies that are making new products, want to enhance customer service and compliance, want to ensure they are meeting industry standards and expectations such as hospitals and medical facilities. For example if you are a hospital administrator and you want to know what departments are doing best in customer satisfaction you could use this strategy. You can do surveys to determine the results. From here you can see who scored highest and look at ways to use those divisions to improve the scores in the other departments.