Performance Measures - Benchmarking.

Essay by tkniUniversity, Master'sA-, June 2003

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Benchmarking is one of the various tools available to reengineering teams. "Essentially, benchmarking means looking for the companies that are doing something best and learning how they do it in order to emulate them" (Hammer & Champy 137). However, there is one problem with benchmarking. It can restrict a reengineering team's thinking to the framework of what is already being done in the same industry. Benchmarking when used this way is just a tool for catching up not jumping ahead.

Benchmarking's roots lie in the land surveyor's term, where a benchmark was a distinctive mark made on a rock, wall or building. In this perspective, a benchmark served as a reference point in determining one's current position or altitude in topographical surveys and tidal observations.

In the 1970s, the concept of a benchmark evolved beyond a technical term signifying a reference point. The word migrated into the lexicon of business, where it came to signify the measurement process by which to conduct comparisons.

During the Eighties, the definition of benchmarking grew in scope and focus, becoming the outreach activity of comparing yourself against others.

Benchmarking gained tremendous influence and currency in the Nineties. Correspondingly, front-line employees and operating managers have applied basic benchmarking skills in scores of different business situations. Among these applications, three distinct types of benchmarking have proliferated. They include process benchmarking, performance benchmarking, and strategic benchmarking.

Process benchmarking focuses on discrete work processes and operating systems, such as the customer complaint process, the billing process, the order-and-fulfillment process, or the strategic planning process. This form of benchmarking seeks to identify the most effective operating practices from many companies that perform similar work functions. In recent years, process benchmarking has grown in stature in the United States. Many of the American benchmarking success stories refer to process...