There are several ways to benchmark. The two most common benchmarking tools are performance benchmarking and best-practice benchmarking. Consider a nationwide bank that has contracted with a seller to assess its current staffing and facility locations. The goal of the contract is for the seller to produce a strategic plan that creates cost efficiencies for the bank by recommending (and implementing) areas to consolidate among staff and facilities. (One recommendation may be to close down a bank branch that is located within three miles of another bank branch.) This is a long-term contract stretched out over five years. If you were the project manager in the bank, to what benchmarks would you compare your seller? Are they performance benchmarks or best-practice benchmarks?
Benchmarking is a term that has often been used to represent "the best of the class" performance. Your text implies a slightly less "perfectionist" performance threshold, whereby you assess the performance measures for other similar vendors or services relative to your BPO services, and use these samplings to define performance measures for your project/contract. Which of these two inferences do you feel is more appropriate for supporting the development of performance measures? State your arguments in support of your selection.
Is it realistic to use a "perfectionistic" metric for benchmarking? Is there a human factor involved in project implementation there?
Here is a different way to view the discussions we are undertaking here: Do you want to benchmark using a perfectionistic metric that may not be achievable, or do you want to work with a best in the class metric that, by definition, will be continuously changing (in other words, the bar will always be subject to be raised)?