Benchmarking involves an outward look at how others achieve their performance levels together with an understanding of processes that they use.

Lessons learnt from benchmarking exercises, when used properly, can lead to improved performance.

To be effective, benchmarking should be an ongoing process, using regular comparisons to identify areas for improvement. The technique can be used at all levels of industry, but in this exercise the relevant levels are enterprise and sector.

At the enterprise level, benchmarking can support management strategies to improve performance and competitiveness. The data arising from this project can be used to compare the performance of individual companies with industry performance, enabling the identification of areas of relative strength and weakness.

Companies may then work with one or more benchmarking partners to seek to identify how specific processes can be improved through understanding of how superior performance is achieved. This can help companies to find innovative solutions in a culture where knowledge is shared and greater understanding of processes is achieved.

At the sector level, the techniques used in enterprise benchmarking are applied to the whole industry in which similar types of best practice are essential for competitiveness or compliance. The techniques provide a means of monitoring key performance indicators that impact on the ability of the sector to respond to changes in standards, and to identify best practice in relation to those factors.

Benchmarking exercises should never be one-offs; they should be part of an ongoing strategy for improvement, at whichever level they are carried out. It is also imperative that individual enterprises commit to benchmarking at all levels of the business, and be prepared to accept criticism of performance and provide the means to bring about improvement.