Benchmarking is defined as the comparison between vendor performance and designated benchmark organizations or indexes. An index is a publicly available indicator for a factor that is associated with a pricing element.
- Internal benchmarking is the continuous process of measuring a company’s products, services and practices to determine whether the best possible job is performed with the resources at hand. This can include comparing similar functions of different operating units in an organization or comparing the operations of a specific division from one year to the next.
- External benchmarking is the continuous process of measuring a company’s products, services and practices and comparing them with those of another company. This can include comparisons with industry peers, functional leaders, or best-in-class performers.
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