Bench-marking--the process of establishing a standard of excellence and comparing a business function or activity, a product, or an enterprise as a whole with that standard--will be used increasingly by healthcare institutions to reduce expenses and simultaneously improve product and service quality.

As a component of total quality management, benchmarking is a continuous process by which an organization can measure and compare its own processes with those of organizations that are leaders in a particular area. Benchmarking should be viewed as a part of quality management programs, not as a replacement. There are four kinds of benchmarking: internal, competitive, functional and generic. With internal benchmarking, functions within an organization are compared with each other.

Competitive benchmarking partners do business in the same market and provide a direct comparison of products or services. Functional and generic benchmarking are performed with organizations which may have a specific similar function, such as payroll or purchasing, but which otherwise are in a different business. Benchmarking must be a team process because the outcome will involve changing current practices, with effects felt throughout the organization.

The team should include members who have subject knowledge; communications and computer proficiency; skills as facilitators and outside contacts; and sponsorship of senior management. Benchmarking requires quantitative measurement of the subject. The process or activity that you are attempting to benchmark will determine the types of measurements used. Benchmarking metrics usually can be classified in one of four categories: productivity, quality, time and cost-related.

Who uses Benchmarking?

In the West most large and highly successful organizations use best practice benchmarking as a tool to continually learn and improve. The resources needed to carry out repeated best practice benchmarking projects properly and in a way that maximizes the learning to be gained from the experiences can be considerable; hence it is used more frequently within large organizations.