Extensive use of benchmarking was a key element of the process adopted by OFWAT to derive cost estimates for future capital expenditure such as that for sewer overflows. Each water company was asked to provide a cost estimate for a standardised range of capital projects. A benchmark was then derived for each standardised project based on the third lowest cost estimate reported. Where a water company's costs are significantly above the benchmark they will be expected to reduce the gap between their cost estimate and the bench mark by 50%.

Benchmarking is just as valuable in improving the service you provide your customers. Do you know how you compare to the best competitor? Are you ahead or behind the competition?