What is the difference between internal and external benchmarking?

Internal benchmarking involves comparing business processes, strategies, or performance within the same organization. It's typically used to identify best practices within the organization, improve performance, and ensure consistency across departments. On the other hand, external benchmarking involves comparing your organization's processes, strategies, or performance with other organizations, typically industry leaders or competitors. This type of benchmarking can provide insights into industry standards, reveal areas where the organization is lagging behind, and inspire innovative ideas for improvement.

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There are different types of benchmarking you can undertake. The common ones involve business processes, products, strategies, and/or performance. To benchmark performance, use quantitative data like metrics and KPIs. To benchmark strategy and processes, use qualitative data on people and resources. Another way to break down benchmarking types is by internal vs. external. Here, we've listed some examples for each. Internal benchmarking typically looks within the organization, whereas external benchmarking examines the organization's position on a more macro level (Slide 6)

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Business Benchmarking

Comparisons to a top performer or industry leader not only examine the current business performance of your organization, but could also inspire new p...

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