It is measuring your performance against that of best in class companies determining how the best in class achieve these performance levels and using the information as a basis for your own company‘s targets, strategies and implementation.
The aim is to learn both, where performance needs to be improved and how it can be improved by comparison with excellent practitioners. Benchmarking can be used to analyze any aspect of organisation performance including: environmental and social sustainability or sustainability management.
Benchmarked performance targets and quality standards are likely to be (since the benchmarking organisation hasn‘t yet achieved them) At the same time benchmarking helpfully stimulates more research and feedback seeking into customers‘ needs and wants and generates new ideas & insights outside the box of the organisation accustomed ways of thinking and doing things.
Four types of benchmarks
1. Internal benchmarking: Its comparison with high performing units in the same organisation e.g. a divisional purchasing function might be benchmarked against a sustainability ―centre for excellence‖ in another division.
2. Competitor benchmarking: its comparison with high performing competitors for whom sustainability is a source of competitive advantage.
3. Functional benchmarking: comparison with another high performing organisation.
4. Generic benchmarking: comparison of business processes across functional and industry boundaries. The benchmark may be set by the example of Corporate Social Responsibility and sustainability leaders or may be formalized in sustainability standards.
- Market and organisational analysis to determine priority and success factors.
- Identify suitable supplier organisations for comparison.
- Research and assess the comparators performance and processes.
- Analyze research feedback to identify best practices and performance gaps.
- Plan new or modified processes, set targets, plan and implement change