What is benchmarking?
Benchmarking is the systematic process of measuring an organisation's performance, practices, or processes and comparing them against recognised standards, industry peers, or best-in-class organisations. The aim is to identify gaps, learn from others, and drive improvements that raise performance to or beyond the benchmark level.
Benchmarking is used across many areas of business: financial performance, operational efficiency, customer satisfaction, employee engagement, product quality, and more. It provides an external reference point that challenges organisations to move beyond internal assumptions about what "good" looks like.
Types of benchmarking
There are four main types of benchmarking: internal benchmarking (comparing performance across different teams, divisions, or locations within the same organisation), competitive benchmarking (comparing directly with competitors), functional benchmarking (comparing processes with organisations in different industries that perform similar functions), and generic benchmarking (identifying world-class practices regardless of industry).
The most powerful insights often come from functional or generic benchmarking, where looking outside the immediate competitive context surfaces ideas and approaches that have not yet been adopted by industry competitors.
The benchmarking process
A structured benchmarking process typically involves: defining what to benchmark, identifying appropriate comparison organisations or standards, collecting and analysing data, identifying performance gaps, developing improvement plans, implementing changes, and reviewing the results against the benchmark over time.
The process is most effective when it is repeated regularly rather than treated as a one-time exercise. Continuous benchmarking builds organisational learning and ensures improvements are sustained.
Limitations of benchmarking
Benchmarking has limitations. Best practices from other organisations may not transfer well to a different context. Benchmarking can also encourage "catching up" thinking rather than innovative "leapfrogging" — the risk is that organisations focus on matching competitors rather than creating new forms of value.
Benchmarks also change over time as industry standards evolve. A metric that represented excellence five years ago may now represent average performance.
How Empiraa supports performance benchmarking
Empiraa enables organisations to set performance targets, track results against those targets, and review progress over time. This internal benchmarking capability helps teams understand whether their performance is improving and whether they are meeting the standards they have set for themselves.
For advisors working across multiple clients, Empiraa GPS provides the visibility to understand performance patterns and identify where a client's performance deviates from expectations.