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Introduction to strategic management accounting

Benchmarking performance

Benchmarking aims to understand and evaluate the current position
of the organisation in relation to best practice (products, services
or processes) and to identify areas and means of performance
improvement.

 Performance measures should be established for the areas benchmarked.

5.1 Types of benchmarking

Process/
Type Internal Competitor
activity

A direct A process
An internal competitor in in a non-
function/
competitor
the same
What is it? department is industry is organisation is
used as the used as the used as the
benchmark
benchmark benchmark

Highlights Can be easier
Straight-
forward but relative to obtain
information
competitive
Evaluation may lack advantage but and can still
innovative hard to obtain find innovative
solutions
information solutions

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