Benchmarking is a process for improving some activity within an organization. We will illustrate benchmarking with the following example.
Company Q has identified one of its activities that needs improvement. The company conducts a search to find another organization that is considered to have mastered the activity. Perhaps it is Corporation J that is recognized as having the best practice for this activity. Corporation J’s performance is viewed as the benchmark or standard or best practice.
Company Q will study Corporation J’s performance and procedures in depth and will identify the differences between the organizations. Company Q will likely modify its procedures in order to bring its performance of the activity up to the level attained by Corporation J.
About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.
He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.
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