A majority of marketing around business and technology refers to the concept of “Best Practices.” Software vendors such as SAP, Oracle, and Microsoft have also adopted use of this term almost to the point of exhaustion, claiming there is no need to worry about business processes during a software implementation since they bring “best in class” functionality to the table. Sounds good in theory, but many companies still don’t truly understand what this means to their business.
Merriam-Webster defines best practice as“a procedure that has been shown by research and experience to produce optimal results and that is established or proposed as a standard suitable for widespread adoption.”Again, at face value this sounds like something that every business should adopt, but let’s consider a few things first:
“Software best practices” and “Industry best practices” are not the same thing: When your software vendor touts “best practices”, ask them more specifically what they are referring to. In many cases they are referring to ways their software has been standardized for use in certain industries. This is not necessarily the same as general industry best practice as they can be restricted by software functional limitations. Even the top ERP systems in the market are not necessarily able to deliver what’s best for your industry.
Best practices must be specific: If you run a distribution company, you need more than “distribution”software or best practices. There are many ways to run a distribution company based on product, geography, order volume and variety, supply chain and numerous other factors. Best practices that pertain to your organization will vary depending on each of these factors. There could essentially be thousands of combinations of processes and assumptions that determine your company’s state of best practice. A software vendor, therefore, who claims to bring “distribution” best practices may not necessarily offer what you need.
Best practices can change: Not too long ago it was considered best practice to use carbon paper to execute contracts. Clearly this is no longer best practice as technology as evolved to allow for a better way of doing things. Technology, regulations and other forms of innovation make the concept of “best practice” ever changing. In this case, software vendors and ERP system integrators may be bringing stale or genericized functionality to the table and still call it “best practice.”
Best practices do not createcompetitive advantage: Finally, general best practices standardize, they do not differentiate. Consider the fact that your business may in fact be in possession of processes that are actually better than the standard “best practice”. This is more common than most people think and nearly every company we have ever visited has had some unique processes where bringing in industry “best practice” would actually dilute their competitive advantage.
Before jumping on the “best practice” bandwagon, be sure to define where you want and need standardization and where you may already have an internal competitive advantage. If you are not certain on how to differentiate or define these differences a consultant can help. Be sure to hire a firm that not only understands the concept of business process but who can also help navigate the impact of software in managing these processes.