Question Tag: Functional Benchmarking

i) Internal Benchmarking:

This involves the comparison of one business unit with another unit within the same organization, especially as part of “rolling out” process improvements or of a highly structured business model. It is less about benchmarking in the true sense (which by definition involves “trying to improve”) than about trying to replicate an existing process that is already perceived as optimal.

ii) Competitive Benchmarking:

Competitive benchmarking is the process of comparing your company metrics against competitors and the overall market. Essentially, it is a method that helps businesses evaluate their performance, pinpoint best industry practices, and initiate their adoption to keep an edge over the competition.

iii) Functional Benchmarking:

This type of benchmarking is carried out with another business partner where there are common business processes but no competition between the firms involved because of the markets they serve.