Definition:
Benchmarking is a process of measuring the performance of a company’s products, services, or processes against those of another business considered to be the simplest within the industry, aka “best in class.” the purpose of benchmarking is to spot internal opportunities for improvement. By studying companies with superior performance, breaking down what makes such superior performance possible, and then comparing those processes to how your business operates, you can implement changes that will yield significant improvements.
Further Reading:
Book: Agile Testing by Janet Gregory and Lisa Crispin.