Benchmarking- Why it’s Important

15.10.20 Theories & Concepts Time to read: 6min

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Benchmarking in an organization is considered to be one of the most efficient processes to help identify the best information practice and improve activity. The write up below analyzes the effectiveness of benchmarking for college and university students.

Benchmarking FAQs

As a tool for assessment, it is used to analyze and compare performance to improve continuous improvement. It mainly focuses on how information is shared, process outcomes, desire to change, and willingness to apply best practices.

There are four main types of benchmarking. They are as follows:
• Performance
• Internal
• External
• Practice

In a banking scenario, the response time for a complaint raised by a client may be 6 hours. It may tempt the management of the bank to think that they are offering the best customer service. But this may not be the case if other competing financial institutions have a response time of about 1 hour. These results show that it is 80% below the benchmark.

Therefore, the bank will need to assess its activities to identify the significant setbacks that lead to employees’ slow response time. The study might find out that its employees are not well-motivated, and this affects the response time. The bank may decide to train their employees on customer service to improve the response time.

Benchmarking requires planning, the collection of data, the analysis of data and then implementation. Once you’ve found benchmarking partners, you’re able to source data and analyze it to identify where your performance needs improvement. You then implement plans for improvement.

Benchmarking Definition

Benchmarking is how an organization’s operations are measured and compared with another organization’s techniques of the same type. The strategy aims to identify the best practices that improve the performance of an organization. It does stress not only the output process, but also identifying the drivers of the actions.

Benchmarking in higher learning institutions have been in use for a shorter time. It is a more recent phenomenon in the education field. It offers a variety of benefits to colleges and universities. It helps overcome the resistance to change for external testing and it facilitates information sharing between students of different universities. The evaluation improves institutional performance in terms of pricing, the quality offered, and customer experience.

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The Types of Benchmarking



Performance benchmarking makes use of quantitative research and data as key performance indicators. It is the first type of benchmarking applied by institutions to identify gaps in performance. In this category, it refers to the comparison of the institution’s performance against other higher learning institutions.

Comparison is conducted against other institutions with similar processes, but they cannot be within the same company. It allows for improvement through the analysis of high-performance processes in other institutions.


Practice benchmarking makes use of data collection. It mainly uses qualitative data to compare how people, technology, or processes conduct activities. Process mapping is vital at this stage to help during the comparison of information.

This process helps you to find how and where loopholes in higher learning occur. It also brings out the best practices used by an organization and can be emulated by others.



College students can use internal benchmarking to compare their performance against other students in different departments. This process allows for quick, easy data collection and the subject can determine areas that may require future intervention.

Internal benchmarking forms an excellent start to understanding the current performance of students. It is viable where one group may perform much better than the other but, but they are both within same institution.


External benchmarking involves the comparison of data and research on the performance of students from different universities. It consists of the collection of students’ understandings. A third party will be required to facilitate the collection of data. It has no boundary restrictions, and performances are comparable worldwide.


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The Benchmarking Process

It is essential that the specified systematic process of benchmarking is closely followed. It is also useful if well-trained practitioners carry out the process to bring out the best results. Below are the main four steps:


1. Planning Stage

Since this is the first step, it makes it the most crucial step. This phase requires minimal errors or faults to avoid future setbacks in other stages. More time is needed at this stage to reduce the possibility of mistakes, but in the long-run, it will make the entire process more efficient.

Identify and prioritize opportunities. The top management decides the most critical processes for its success—techniques are prioritized and set criteria is established. After this, identify the organization to visit. Please do not choose direct competitors since it will be challenging to get the right data. Gather data from various organizations to get detailed information.

Finally, when planning for the benchmarking, study the superior process. It is an important but challenging activity. Some of the vital information of most companies is confidential and obtaining authentic information may not be easy. The formulation of a well-planned data collection process ensures quality information.


2. Analysis Stage

At this stage, everyone involved in the process must take part. The success of this stage depends on the quality of data collected and analyzed. It involves the setting of goals and the improvement of business processes. Overstretching of the objectives will ensure better yields compared to the other organization.


3. Integration Stage

This stage connects the first two stages of planning and analysis to the last phase- the action stage. It can only progress if the early two stages are successful. It is crucial, because acceptance of the proposed processes is vital to the success of the organization.
The findings are communicated and accepted. The top management receives the proposals and approves it.


4. Action Stage

At this stage, the actual implementation of the proposals takes place. A comparison of the processes against the actual performance takes place. This stage is a continuous process. A detailed action plan should be put down after all parties have accepted the feedback.

It should consist of timelines, individuals responsible for each task, challenges faced on each action, and counter those shortfalls. It requires total commitment to finish on time. Continuous monitoring is essential. It involves coming up with more ambitious projects and benchmarking against the best approach. This process should be ongoing.

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Benchmarking Examples


A call service center can conduct performance benchmarking by asking their clients to rate their customer satisfaction. This data improves the processes and assists with boosting performance and motivating employees.


Hospitals and medical facilities can collect data about their patients. Information includes waiting times, recovery times, and the quality of care offered. This information is collected internally to improve the different departments.


In the hospitality industry, external benchmarking is essential. Information on bar consumables and the cost of food is collected. Customer satisfaction ratings are also vital to the process. The implementation of techniques from other top industries forms the primary basis when it comes to benchmarking for improvement.


Online businesses perform practice benchmarking by establishing the cost per conversion across varied categories of products. These businesses also measure and predict seasonal patterns of trades and target their potential clients using customer records and data analysis.

In a Nutshell

  • There are four types of benchmarking
  • Following the four steps of benchmarking ensures quality results
  • Benchmarking involves the analysis and comparison of information to improve processes
  • Benchmarks act as a tool for motivation to keep employees on track