This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance.
In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.
The introduction of gunpowder arms replaced the bow and arrow from the archer, who now had to learn to handle a gun.
The rifled weapon was fixed in a bench, making it possible to fire several identical shots at a target to measure the spread.
[6] The first book on benchmarking, written and published by Kaiser Associates,[7] is a practical guide and offers a seven-step approach.
[9] The technique initially used to compare existing corporate strategies with a view to achieving the best possible performance in new situations (see above), has recently been extended to the comparison of technical products.
Software packages can extend the concept of benchmarking and competitive analysis by allowing individuals to handle such large and complex amounts or strategies.
Another approach to making comparisons involves using more aggregative cost or production information to identify strong and weak performing units.
In infrastructure regulation, DEA сan be used to reward companies/operators whose costs are near the efficient frontier with additional profits.
Such benchmarking studies are used to create yardstick comparisons, allowing outsiders to evaluate the performance of operators in an industry.
Advanced statistical techniques, including stochastic frontier analysis, have been used to identify high and weak performers in industries, including applications to schools, hospitals, water utilities, and electric utilities.