Submitted By:
Shoeb Munshi
Prashant Trivedi

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INTRODUCTION OF THE PROJECT:
What is benchmarking?
Benchmarking is the continuous search for and adaptation of significantly better practices that leads to superior performance by investigating the performance and practices of other organizations (benchmark partners). In addition, it can create a crisis to facilitate the change process.
Benchmarking is a management tool whose time has come in banking. It is the process of learning, emulating, and exceeding the world's best practices to dramatically improve product and service quality. Benchmarking is a competitive strategy to win market shares and a survival strategy for threatened corporations and industries.
As the banking industry becomes globalized and liberalized, clients anywhere in the offering the same products. A bank which does not benchmark may lull itself into dangerous complacency and deceive itself that it is doing its best or is at its best, while its customers may think otherwise. As customers seek better and better service, those banks which do not do continuous improvement through benchmarking are bound to lose customers and sales rapidly and irreversibly.
Alan Flower (1997) lists 5 main stages in effective benchmarking:
• Selecting aspects of performance that can be improved and defining them in a way that enables relevant comparative data to be obtained - in effect, producing performance indicators that will make sense to other organizations;
• Choosing relevant organizations from which to obtain raw or headline data;
• Studying the data to identify possible opportunities for improvement;
• Examining the procedures of the best-performing organizations to pick up ideas that can be adopted or adapted to achieve performance improvements; and
• Implementing new processes.
Organizations usually benchmark performance indicators e.g. profit margins, return on investment (ROI), cycle times, percentage defects, sales per employee, cost per unit or business processes e.g. how it develops a product or service, how it meets customer orders or responds to enquiries, how it produces a product or service.
Benchmarking goes beyond comparisons with competitors to understanding the practices that lie behind the performance gaps. It is not a method for 'copying' the practices of competitors, but a way of seeking superior process performance by looking outside the industry. Benchmarking makes it possible to gain competitive superiority rather than competitive parity. The term benchmark refers to the reference point by which performance is measured against. It is the indicator of what can and is being achieved. The term benchmarking refers to the actual activity of establishing benchmarks and 'best' practices.
It must be noted, however, that there will undoubtedly be difficulties encountered when benchmarking. Many of them are detailed in the corresponding document "Guide to Benchmarking" under "factors to be aware of". Significant effort and attention to detail is required to ensure that problems are minimized.
Why do you need to benchmark?
There are many benefits of benchmarking. The following list summarizes the main benefits:
• provides realistic and achievable targets
• prevents companies from being industry led
• challenges operational complacency
• creates an atmosphere conducive to continuous improvement
• allows employees to visualize the improvement which can be a strong motivator for change
• creates a sense of urgency for improvement
• confirms the belief that there is a need for change
• Helps to identify weak areas and indicates what needs to be done to improve.
Thus, benchmarking is the only real way to assess industrial competitiveness and to determine how one company's process performance compares to other companies'.
WHAT TO BENCHMARK?
 Product & Services
• Finished Goods
• Product & Services Features
 Work Processes
• Manufacturing
• Supplying
• Ordering
• Maintenance
 Support Functions
• Human Resource Department
• Financial Management
• Marketing
 Organizational Performance
• Sales
• Profitability
• Cost
• Quality
• Manpower
 Strategies
• Cost Leadership
• Differentiation