INDUSTRY ANALYSIS
The Truth About Best Practices

The lesser the control over a paycheck, the tougher to modify processes for your own best practices goals. But too often companies of all types -- manufacturers, service companies, distributors, dealers -- want best practices to be the panacea for all that ails their sales and execution efforts. Yet with little direct control of channels it's often easier to believe the following best practices myths than peel back and discover what's really wrong.

Best Practices Myths

The best practices myths that pervade enterprise software generally and CRM specifically include:

• "Our company can buy its way into best practices." Best practices cannot be bought. This is a huge myth and is just like saying that if you spend enough with a gym you can buy your way into better shape. Nothing valuable ever comes free, and when you consider the synchronization of people, processes and systems to attain best practices, it's clear that performance can't be bought -- it has to be a deliberate goal. No vendor, system integrator, consultant or analyst can give you best practices for a price -- you have to earn it by changing your company.

• "Best practices will win our channels back from competitors." This is an excuse used when any given manufacturer doesn't have a grasp of channel management fundamentals. Execution, higher performance goals, re-aligning, and, if necessary, replacing key staff must be considered if best practices are going to be achieved. Best practices are neither a substitute for a strong grasp of the fundamentals of a channel strategy nor for true commitment to responsiveness.
• Best practices are "one-size-fits-all" measures of performance. No two companies have identical processes, so a "one size fits all" best practices goal is impossible. Best practices for one company's channel will be completely different from another's. Instead, best practices are all about finding where your company is on its own performance levels and adjusting the most broken strategies first.

• Market leaders are best practices in action. No connection between market performance and best practices exists. Another major myth: Consider the fact that one of the world's best known PC manufacturers still takes Web-generated orders for complex products and manually re-types them into its ERP system. Or that one of the world's leading auto manufacturers today has less than a 30 percent "hit rate" or synchronization success rate between its order capture, pricing and order management systems. Orders have a 3 in 10 chance of being right -- so this manufacturer has manual systems and processes to compensate for this. Ironically both of these companies are market share leaders.

• Best practices lead entire industries to innovation. This is false; when best practices get relied on too much it enforces mediocrity. Over time best practices measures of performance become the new industry norm.

Truths About Best Practices

Keep in mind that best practices for highly volatile industries like high tech in 2005 are going to be the norm of your industry by as early as 2006, and shooting for best practices from 2004 -- still -- is reaching into the past. Thus, keep the following best practices truths in mind before bringing in an army of consultants from your advisory firm of choice:

• List all customer-facing processes first. Get a handle on all the customer-facing activities in your company first -- and include the time it takes to complete them. But most importantly, determine how many correct orders, leads, in short -- accurate customer interactions -- are happening relative to the total. No doubt you'll know which areas are broken most; those are the ones taking so much time right now to fix.
• Set a baseline of performance by process area. For lead management, channel funds management and order capture -- three critical areas of growth -- set goals for improvement. These baseline measures are your "true north" to navigating to the best practices most relevant to your company.
• Seek your channels' feedback. If you have indirect channels, involve them in the baseline measurements -- they can give you an invaluable view of your performance outside your four walls.
• Set aggressive goals for performance and assign accountability. Best practices fail when no one in an organization has accountability for results -- be sure there is someone whose compensation rests on increasing the baseline performance figures -- and give them the support they need to invoke change. If your company is allergic to accountability, best practices will be difficult to achieve.
• Trending is critical. Measure performance monthly and get a trend analysis going on how those areas causing the most pain in your company are improving. Your company needs to realize that it's competing with itself for improvement -- all the more reason to not hand this off for a third party to handle. AnswerThinkspecializes in tracking best practice values by industry, relying on their subsidiary company, The Hackett Group, for a comprehensive database of values. What's unique about AnswerThink (Nasdaq: ANSR) is the company's approach to managing best practices data -- they are definitely not selling a "one size fits all approach." Their approach is to deliver industry specifics so you can see if you're working very hard to just hit the median values for your industry or if you really are achieving best practices. It's as if you took the SATs and the firm is delivering to you your percentile ranking in your state and nationally.

Best Practices Are About Changing Behavior, Not Spending Dollars

Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research . He recently completed the book Getting Results from Your Analyst Relations Strategies, which is available on Amazon.com.