Benchmarking is the practice of a business comparing key metrics of their operations to other similar companies. Companies use benchmarking as a way to compare key metrics to other businesses in the industry. This allows companies to see how well they are performing and identify ways they can become more competitive in the industry. In the business world, companies use benchmarking as a point of reference as well. But instead of having physical benchmarks carved in stone, they use benchmark reports as a way to compare themselves to others in the industry.