Benchmarking is normally used to judge your business against competitors to see if you can learn from them to make improvements to your own business to try to become equal to or to surpass your competitor.
In recent years it has been used not only to judge the competitors but also to find the best practice in other industries and apply it to your own. This can be seen in the number of companies that have taken on the Toyota Production System (Lean Manufacturing) and have adopted it to produce lean offices, IT systems, Accounting etc. By doing this you can effectivley distrupt your own industry as your competitors will be using the same traditional methods.
Some of the advantages of benchmarking are that you can use it to develop a business strategy, keep abreast of good practices from various industries, develop meaningful metrics, check for your own business vulnerability and develop good models and methods for improvement.
The main disadvantage when benchmarking a competitor is trying to obtain information about them. After all, they are rivals in the same market, and therefore they are not going to help you. Benchmarking also takes time as you need to find a benchmark and then gather and analyse the information to be able to apply it to your business.
We have used some of the best practices from other industries and applied them successfully to our customer's businesses.