I’ve never been a big fan of the term “best practices.” It suggests that there is a single best and standardized way for each organization to run its operations, which is clearly not the case. It also suggests that there is a magical Best Practices Board in the sky defining and approving those that qualify as best practices and those that do not. In short, we see the buzzword for exactly what it is: marketing hype.
Don’t get me wrong. There are cases where you want to leverage ERP software to avoid reinventing the wheel. Vanilla and non-differentiating business functions that don’t provide a distinct advantage between you and your competitors are good candidates for utilizing best practices. Think: accounts payable or general ledger. These are examples of areas where creating business processes from scratch may not make a lot of sense, and quite frankly, modern ERP software probably handles better than you can. (For more information on this topic, read our recent blog on the pyramid of ERP best practices).
On the other hand, competitive differentiators are much harder to generically categorize as best practices or not. After all, if competitors in a given industry are handling their customers, innovation, and profitability in the same fashion, then is it really a best practice? In addition, why do different ERP systems have different definitions of best practices for the exact same functions?
The secret is that ERP vendors define best practices according to what is best practices to their software, not necessarily to your business. For example, several years ago I worked with a client that implemented a Tier I ERP solution. Over the years, this client had found that the most efficient and cost-effective pick, pack, and ship process for them was to print labels for the customer orders, pick according to the labels, and load shipments directly on to the truck. However, the software they chose did not handle the pick, pack, and ship process in this way. Instead, the software’s “best practice” was to print a pick list, pick the products, store in a staging area that didn’t exist and they didn’t have room for, print the labels, then load the truck. In the case of this client, this was a significant step backward and was far from best practice. So the client had a choice: 1) invest over $1M reconfiguring the warehouse to account for this new process, or 2) spend considerable time and money customizing the software to accommodate the client’s best practices. This isn’t an easy decision.
So the lesson is that best practices is one of those terms with a lot of flash but with very little substance. It is important to understand how your business works, define those processes and requirements, identify opportunities for improvement, then engage in the ERP software selection process. Otherwise, you may be paying dearly for those “best practices” that we all hear about.
Learn more about ERP best practices, ERP software selection, and other informative topics in our weekly ERP webinar series.