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Decision Making Technique Benchmarking Benchmarking is a tool that provides goals for realistic process improvement and helps you understand the changes required to improve performance. You may use benchmarking to identify and rectify problem areas, implement strategic change initiative, or for continuous process improvement. Benchmarking is the practice of being humble enough to admit that someone else is better at something, and being wise enough to learn how to be as good or even better than them. (McCall, Jr. & Kaplan, 2003) Companies benefit from benchmarking through improved performance and productivity levels. Benchmarking helps, organizations understand their industry better, which leads to innovative thinking. Innovative thinking helps you to achieve the desired performance level more rapidly. Other benefits include the identification of the best practice to use in a particular process. Savings are generated using benchmarking because it allows you to continuously improve performance and productivity, therefore eliminating costly errors. Benchmarking also enables competitors to talk to each other through structured studies and shared findings, which can raise the standard of excellence industry-wide. Since global competition is increasing, the need for competitive advantage is necessary. Benchmarking can help your business gain that competitive edge through improved performance and productivity. (Evans, 2002) People often mistake benchmarking for competitive analysis. Competitive analysis typically looks at intelligence data: facts and figures, product breakdown and strategic goals. It is a guessing game as to how to achieve the competitive advantage. (Evans, 2002) Types Of Benchmarking There are four types of benchmarking used, process, performance, strategic and internal.
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