Benchmarking is a way of discovering what is the best performance being achieved.
When we compare our performance or processes with other entities including competitors, other organisation or industry best practices, it’s called benchmarking.
Thus, a benchmark is a reference point that allows you to compare your own levels of performance with the performance levels of others.
Benchmarking is a process for obtaining a measure that is the benchmark.
Benchmarks are the “what,” and benchmarking is the “how.”
Benchmarking can take many forms. It essentially involves gathering and analysing data that allows you to compare performance between one function or organisation with another.
The key feature of benchmarking is its integration within a comprehensive and participatory policy of continuous quality improvement.
Conditions for successful benchmarking focus essentially on careful preparation of the process, monitoring of the relevant indicators, staff involvement and inter-organizational visits.
Implementing a strong benchmarking process means adhering to a simple set of principles.
Developing a full understanding of performance is crucial in any function. Benchmarking is an integral part of this process.
Through comprehensive and effective data analysis, it enables credit management teams to spot their own strengths and weaknesses and use that information to implement better processes and policies.
In turn, that can improve efficiency and save valuable time and resources for the team. Thus cutting unnecessary or duplicate work and enabling more informed decision-making.
Benchmarking has also been used as a means of reducing the perceived gap between the performance of public sector organisations and their private sector counterparts, with the aim of improving the quality of service, and ultimately saving the taxpayer’s money.
Benchmarking of public services matters because it is critical for governments and communities who need to know whether services are effective and efficient, who is accountable for service delivery, and whether the outcomes of service delivery are in the interests of the citizenry. It is an important framework for policy decision-making as well improving delivery.
Benchmarking over time can be useful to see how a service or one aspect of a service has changed.
