Benchmarking is a process in which a company compares its performance and practices against one or more organizations. The objective is to identify best practices that will help improve business performance.
It is common to compare your organization against similar companies (for example: same size, industry, geography) and against top performers in a specific business practice, regardless of industry or size (for example: ideation, new product development, portfolio management).
Benchmarking is a structured approach that involves data collection (via a questionnaire), analysis, and reporting. The questionnaire may solicit quantitative or qualitative data or a combination of both. The result of the data analysis is a point of reference against which you compare your company’s performance and target improvements.
Product Innovation is one of the most popular business functions to benchmark primarily because of its valuable purpose – it delivers top-line growth, creates new customer value and establishes a competitive advantage. For these reasons companies strive to continuously improve Product Innovation performance.