For several decades successful firms in various industries have benchmarked their operations to improve quality and bottom-line results. Sixty years ago W. E. Deming transformed the auto industry with his unrelenting focus on continuous process improvements supported by frequent benchmarks to measure progress. GE serves as a role model with its six-sigma approach to creating efficiency as measured by regularly-scheduled benchmarking of key outputs. This trend toward benchmarking outcomes has been fueled by the increased availability of detailed operating data and robust tools to spot trends.

The asset management industry has been relatively late to the use of comparative data to assess performance, to measure capabilities, and to set direction. However, leading firms increasingly regard benchmarking as an essential business tool to optimize performance and reduce costs. Cutter has found that firms effectively use benchmarking information for:

• Strategic Planning – Firms develop, and then maintain, plans to guide their business, support new products, lower risk, and improve investment processing capabilities. Therefore, to reduce risk, firms are analyzing benchmarking in order to understand “best practice” and to learn how leading firms “make it work.” As an example, several firms are using the results of Cutter's survey on Derivatives Management to pace their investments in the underlying technologies.
• Management Reporting – In several firms Executive Management receives benchmarking reports as independent assessments of the progress that IT is making in attaining its annual targets. Management then targets the largest “gaps” in capabilities and develops improvement plans.
• Project Management – Global firms are adopting “Best in Class” metrics as the yardsticks against which they assess the work being done on major architecture initiatives. Management reviews the status of each activity with an eye on developing top-level capabilities. These review sessions are more effective because the participants have very specific targets to attain and extensive reference data to guide them along the way.
• Budget Preparation – Benchmarking surveys highlight efficiency (outcomes achieved from resources expended) of critical operations. Firms use these estimates to set target resource levels for the coming year and identify the process and technology changes required to sustain operations at these lower resource levels.