Benchmarking is comparing business processes and performance metrics to competitors, industry bests and best practices from other companies. Benchmarking is usually measured as quality, time and cost.
Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others
Performance benchmarking involves gathering and comparing quantitative data (i.e., measures or key performance indicators). Performance benchmarking is usually the first step organizations take to identify performance gaps.
Practice benchmarking involves gathering and comparing qualitative information about how an activity is conducted through people, processes, and technology.
Internal benchmarking compares metrics (performance benchmarking) and/or practices (practice benchmarking) from different units, product lines, departments, programs, geographies, etc., within the organization.
External benchmarking compares metrics and/or practices of one organization to one or many others.