ERP Systems

Best Practices versus Critical Success Factors

Best practices can be compared to critical success factors (CSF) as both define and support organizational goals.  CSFs enable executives and upper management to identify methods or processes that are vital to the success of the organization.  Similarly, best practices enable executives and upper management to define operations to accomplish organizational goals.  The difference between CSFs and best practices is that best practices are incorporated with Enterprise Resource Planning systems.

Enterprise Resource Planning (ERP) software and best practices have become synonymous as ERP software has evolved and grown popular.  Best practices are built into the software.  In fact, ERP systems are based on best practices or the best ways of doing processes.  For example, let’s say that you own a manufacturing company that makes slinkies and you purchase an ERP system.  The ERP templates are usually structured based on the industry you are in.  So, you can start with a set of ERP configuration decisions that are typical for slinky manufacturers.   Best practices are applied as you continue your configuration because they are embedded in each piece of ERP software.  The ERP vendor develops the software so that it behaves this way.  They embed best practices.  But, how do they define best practices?

Best practices are selected and embedded in ERP software by ERP vendors.  Selection is based on intensive field research, studies, qualitative research projects, and interviews.  Best practices are always evolving and ERP software is always improving.   If you have an old ERP system and upgrade that system, you will have new functionality and updated and/or new best practices.

Enterprise Resource Planning systems are created to provide structure, methods, and processes that allow for organizational wide standards.  They provide a pathway for companies to follow.  Image you are Dorothy and you’ve just arrived in the land of Oz.  “Toto, where are we”, says Dorothy.  “Bark bark”, says Toto.  Then, the little people appear and sing to Dorothy.  Dorothy didn’t know what to do or where to go until the little people told her about the yellow brick road.  The yellow brick road provides structure and a path to follow.  Dorothy symbolizes a company and the yellow brick road symbolizes an ERP system.

Best practices and critical success factors may very well be the same.  But, along the yellow brick road you won’t see critical success factors.  You will in fact, see many best practices.

Written by :

kristine H