Hagan School of Business

Benchmarking Benefits

Broadly, benchmarking is defined as "a continuous, systematic process for evaluating the products, services, and work processes of organizations that are recognized as representing best practices for the purpose of organizational improvement" (Spendolini, 1992, p. 9). The process in this definition involves conducting research on competing and noncompeting organizations which are leaders in certain areas. Many of the research techniques used here are familiar to students in graduate business programs -- primary and secondary research, mail-out surveys, interviews, and others -- are used for data collection and analyses. In addition, benchmarking does not rely on purely subjective opinions, but on data collection and analysis, which are difficult to dispute. Many practitioners have learned that even before comparing the data between the institutions being benchmarked, the very practice of compiling the benchmarking information and making it available within their own institutions helps create an environment that encourages organizations to reexamine their operations (Blumenstyk, 1995; Detrick & Pica, 1995).

Another reason benchmarking has great appeal is that it is viewed as a positive process that helps in institutional cultures develop learning and improving as goals. Robert Camp (1992) states that the Japanese have a word dantatsu, which means "striving to be the best of the best . . . captures the essence of benchmarking that is a positive, proactive process designed to change operations in a structural fashion to achieve superior performance" (Camp, 1992, p. 3). Camp adds that institutional leaders in the United States have no such word because they always assumed that they were the best. The Xerox Corporation learned this lesson more than 15 years ago. Robert Camp is the author of the landmark 1989 book, Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance. This book reports on benchmarking efforts in the United States at Xerox Corporation, which institutionalized the practice in its organization, and fully describes the ten-step benchmarking process used. Benchmarking led to fundamental changes in how Xerox manages suppliers and develops products, and continually forces the company to look at itself externally.

Benchmarking offers the opportunity for practitioners to think "out of the box," as Michael Spendolini describes it, and to discover new ideas (Spendolini, 1992). Leaders and managers tend to work in their own boxes most of the time, where they have been successful and are comfortable. On occasion, they may look outside this box and see what the direct competition is doing, especially if there is financial or enrollment difficulties. Benchmarking, however, takes a much more systematic approach at examining competitors and looking at processes externally. The four types of benchmarking described later (internal, competitive, functional, and generic) offer the opportunity to break out of the internal box we operate in and discover what process leaders in other industries and world leaders are doing to achieve greatness in a particular area.

Blumenstyk, G. (1995, September 1, 1993). Measuring Productivity and Efficiency:

Project Aims to Come Up With Comparative Costs for Operations, From Parking To Purchasing. The Chronicle of Higher Education, pp. A41.

Camp, R. C. (1989). Benchmarking: The Search for Industry Best Practices That Lead to Superior Performance. Milwaukee: ASQC Quality Press.

Camp, R. C. (1992). Learning From The Best Leads To Superior Performance. Journal of Business Strategy, 13(3), 3-6.

Detrick, G., & Pica, J. A. (1995, April 10-12, 1995). Benchmarking Business School Performance: Lessons Learned. Paper presented at the American Association of Collegiate Schools of Business, Minneapolis, MN.

Spendolini, M. J. (1992). The Benchmarking Book. New York: AMACOM.