Benchmarking and Best Practices

Benchmarking is a management tool that helps companies remain competitive and become more efficient. To benchmark effectively, both performance measurements and best practices must be applied. Performance measurements must be developed on an "apples to apples" basis to ensure comparability. However, performance measurements alone are an insufficient tool for improving performance. Business philosophies and practices must also be considered so that the appropriate best practices can be employed. Together, performance measurements and best practices are a powerful combination. What Is a Best Practice? A best practice is a business practice or philosophy that leads to superior performance in terms of financial, quality and service improvements. Financial performance can be improved by increasing revenue, reducing costs or a combination of the two.