Companies look at different aspects to fight the competition in the field. The market is full of competition and very tough to tackle them. As all the players are working hard on different strategies to beat the competition. Hence the companies are working on different tools to manage the things internally and externally. From earlier days also there are few methods used to measure the performance of the organization. Hence from those "Benchmarking" is one of the tools to measure performance.
The process of benchmarking is to find the best practices within and outside of the Industry .By this one can match their own performance by putting a benchmark or standard for their performance. By making a perfect analysis of the things the company can surpass the mistakes and problems also. They can easily find the solutions for those problems. Hence this is an important thing that the companies should look into.
Hence Benchmarking can be classified into three ways such as Performance, Process and strategic. To be clearer about this Performance Benchmarking is to compare one's performance with other player so as to measure the performance level. And in process benchmarking the companies compare the methods and practices so as to check the performance measure on processes. Where as in Strategic Benchmarking companies check with the competitor's strategy that is being used for long term success in the market.
Apart from this there are few more types of Benchmarking which gives the company a clear outlook of the processes. Those can be
1. Functional Benchmarking: This is to compare the process and function of the organization with the other player in the same sector.
2. Generic Benchmarking: It is a comparison of one's own practices with the best practices of other anywhere in the organization.
Hence the aim of Benchmarking is to find out the best practices so that the organization can perform in a better way. This shows about the firm's performance. Here the company can find out where they stand or lagging behind. This helps the company to check on their strengths and weakness so as to perform better in future. And by this the company can check the capabilities of it. In layman terms it is a standard which gives the company the results of their performance. Hence depending upon the market and situation the company modifies it and makes a sense to work with. Therefore this works as a better tool for the organization to measure it's performance.
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