Excerpts from an exclusive e-mail interview with Manjari Raman:
How do you define benchmarking?
Benchmarking is finding and implementing best practices. The Japanese word dantotsu-striving to be the best of the best-captures the essence of benchmarking. Benchmarking is a positive, proactive process to change operations in a structured fashion to achieve superior performance. The purpose of benchmarking is to gain a competitive edge. Today, benchmarking is an essential ingredient for strategic planning and operational improvement.

How can Indian companies benefit from benchmarking?
After opening up of the economy, Indian companies have to catch up with their global competitors-in the least possible time. They have to improve their critical processes by adapting best practices, to either meet customer requirements or become world class. Benchmarking is a tool that can help them achieve this objective. By benchmarking they can "leap frog" over competition.

How exactly would benchmarking help in gaining a competitive edge?
There are several basic obstacles that organisations face. First, no one is best at everything they do. Second, there is a need to constantly search for good, if not best, practices. Lastly, once found, the best practice knowledge needs to be compared, transferred, and adopted throughout the organisation. These basics are why benchmarking exists - to overcome these obstacles in a disciplined way.

However, there are other reasons why benchmarking is increasingly being pursued as the preferred method to prove performance. Among them are bringing rigor to the approach in setting goals, overcoming disbelief, assigning accountability, and speeding culture change. It is the careful pursuit of best practices, and understanding these key reasons why benchmarking improves business performance, that may be the only way to create a sustainable competitive advantage.

Are there any success stories on how benchmarking has helped Indian companies?
I have conducted workshops and master classes for Tata Steel and critiqued a number of significant processes while visiting Jamshedpur. They have completed more than 150 projects since 1997. Management started recognising successfully completed projects through annual functions at different levels depending on the audited savings and rigour of implementation of the project. Each department was asked to select at least two benchmarking projects at the beginning of the financial year. Conducting internal benchmarking in 1997-1998 garnered good results. Now other Tata Group companies are visiting Tisco to study the approach supported and promoted by the executive director (operations). This critical support for the expansion of benchmarking is highly commendable.Another Indian company that has successfully used benchmarking for process improvement is NIIT.

How popular is benchmarking globally?
Benchmarking continues to be a highly preferred improvement tool. A major consultancy surveys organisations around the world in their use and popularity of management tools. They now have seven years data from 5,200 respondents. The three most popular tools, mentioned by over three quarters of the respondents, shows strategic planning as the most popular tool (81 per cent); mission and vision statements second (79 per cent); and benchmarking third (77 per cent).

What are the pitfalls of benchmarking that a company should be aware of?
The concept is easy to understand and many organisations have proven that it adds value. Yet some have failed in their attempt to implement this straight-forward concept. Avoiding these miscues can help ensure success; mission goals, unconnected objectives, relevance to other initiatives, lack of sponsorship, unengaged process owner, undocumented process, overemphasised measures, tackling too much, unacceptance of findings, assuming a site visit is needed, time and resources overlooked, failure to inspect, assess, and status.

Has the New Economy made an impact?
The focus for the future is not only on becoming the most efficient operation but also seeing how best practice knowledge can be embedded in products, services, and processes that serve customers to drive growth. Today, competition is between processes-processes that serve customers. The incorporation of best practice knowledge will be the fundamental way organisations achieve excellence. In a future date this will only be heightened through best practice sharing, innovation and leveraging intellectual assets through organisational learning conducted electronically. The basic benchmarking process will remain the same in the evolving digital network-connected environment.

How will benchmarking evolve in the future?
The World Wide Web will bring a set of tools and approaches to the basic benchmarking process which, if used innovatively and creatively, should make the process more efficient and effective. There are a myriad of tools and information sources available over the Web. New approaches to using this power should yield better results, faster and cheaper.

Outside of the changes mentioned, the Internet itself is not a pervasive factor in the pursuit of best practices. Human sharing is. And to the extent that Internet savvy companies use the Web as forums for shared successes and failures, to shrink learning curves and share experiences to facilitate these activities, it will compress the benchmarking process.