Types of Benchmarking

Q. 6 (C) Write a Short Note on -
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other industries.
There are four types of benchmarking:
1. Internal Benchmarking:
This is a process of comparing a company's performance metrics with its own historical data. It helps in identifying the areas where improvement is required.

2. Competitive Benchmarking:
This involves comparing a company's performance metrics with that of its competitors. It helps in identifying areas where the company is lagging behind and where it needs to improve to remain

competitive. 3. Functional Benchmarking:
This involves comparing a specific function of a company, such as finance or HR, with the same function of another company. It helps in identifying best practices that can be adopted to improve the function's performance.

4. Generic Benchmarking:
This involves comparing a company's performance metrics with those of companies from other industries. It helps in identifying best practices that can be adopted to improve overall performance.
Each type of benchmarking has its own advantages and disadvantages, and companies should choose the type that best suits their needs and goals.