Benchmarking assumes that being at least as good as the leader is a prerequisite to being competitive.
EVA (economic value added analysis) is a good start to assess the competitiveness of an enterprise in the global marketplace, but to it we must add benchmarking. Benchmarking is a tool that helps a firm tell whether or not it is globally competitive. Benchmarking assumes, correctly, that what one company does another company can always d as well. “Best performers” are often found in identical services or functions inside an organization, in competitor organizations, but also in organizations outside the industry. Together, EVA and benchmarking provide the diagnostic tools needed to measure total-factor productivity and to manage it. They are examples of the new tools executives should understand to measure and manage what goes on inside the enterprise. Combined, they are the best measures we have so far available.
ACTION POINT: Instigate a benchmarking study by gathering data on a product, service, or process from a comparable organization, even from one outside your industry. Set performance measures to ensure that you are competitive with the best performers.
Management Challenges for the 21st Century
From Data to Information Literacy (Corpedia Online Program)
* Source: The Daily Drucker by Peter F. Drucker