Benchmarking (also "best practice benchmarking" or "process benchmarking") is a process used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice, usually within their own sector. This then allows organizations to develop plans on how to adopt such best practice, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to challenge their practices.

Benchmarking can be done internally to a company and its divisions and/or externally evaluating the competition and/or other industries.

Benchmarking in simplistic terms is the process where you compare your process with that of a better process and try to improve the standard of the process you follow to improve quality of the system, product, services etc.

http://en.wikipedia.org/wiki/Benchmarking