Benchmarking Role in Business

Benchmarking is business tool to compare the owns company or organization, business, production, operation, process against the other organization or competitors. Benchmarking can be applied against any product, process, function or approach in business.
Benchmarking can be internal and external.
Internal benchmarking comparing performance (Cost, production, Marketing, efficiency effectiveness) between different department, groups or teams within an organization
External Benchmarking comparing (Cost, production, Marketing, efficiency effectiveness) performance with companies in a specific industry or across industries/
Benchmarking software can be used to organize large and complex amounts of information. Software packages can extend the concept of benchmarking and competitive analysis by allowing individuals to handle such large and complex amounts or strategies. Such tools support different types of benchmarking (see above) and can reduce the above costs significantly.
The emerging technology of benchmarking engines automates the stage of going from data to noteworthy comparative insights, sometimes even expressing the insights in English sentences.
Why should your strong Benchmark?
The benchmarking hints for a special process in your firm can be strengthened. Some Corporation or company benchmark as a means of can do both improving the areas of business and review the competitor's strategies. The most benchmarking approach from the internal Benchmarking that a process can be enhanced. Organizations will collect data on the basis of performance at different situation and different event that cannot control to identify missing part or problem that down the business strategies for strengthening. The most common organizations or company, business compare them to competitors in strive to recognize and removing the missing part in service or production and gain a competitive edge. The collecting data in a competitive benchmarking initiative offers specific insights into the competitor's processes and thinking.
Three Primary Classifications of Benchmarking
Benchmarking can be classified into three categories internal, competitive and strategic.
Procedure
The 12 stage methodology consists of:

Choose a Topic
Sketch the process
Recognize the capable partners
Identify data sources
Collect data and select partners
Determine the gap
Establish process differences
Target future performance
Communicate
Adjust goal
Implement
Review and recalibrate

Benchmarking Examples:
A firm interested in improving their customer service practices might compare their own processes and metrics against those of their most successful competitor.
If they identify negative discrepancies or differences in measures, they may embark upon process improvement to strengthen their performance. The firm will observe and measure the competitor's operations, and in some industries, they will send in employees as customers to gain direct experience.
A quick service restaurant chain dependent upon speedy, accurate service in the drive-thru to maximize efficiency, cut costs and increase profits will study the drive-thru practices of key competitors. Every second gained without sacrificing customer quality allows the firm to increase profits. Over the years, competitors have consistently innovated in their drive-thru operations with configuration, number of windows, menu and speaker boards and ordering approaches in an attempt to improve in this area. They are constantly watching and benchmarking against each other.
One firm, Pal's Sudden Service, a small hamburger and hot dog chain and a Baldrige Quality Award winner, is so successful at achieving best-in-class performance for drive-thru and overall restaurant operations, that it opened an educational institute to train other organizations. Many companies in the fast food market use Pal's as a best-in-class benchmark for their own firms.