In Layman’s terms, the word Benchmark is often used to describe a reference point or baseline for any given metric. Within the finance industry, the performance of any portfolio or asset class is often assessed using the benchmark.
In computer science, the same term is used to assess the relative performance of a certain product or service while deploying several computer processes. In fact, there are several benchmarking tools commercially available for such evaluation tasks.
Business analysis also uses benchmarks to understand company behavior and compare performance against one another. Regardless of the sector and mode of application, each benchmarking process comes with its own set of evaluation metrics for better assessment.