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Best Practices
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ERP software information Effectively Using Best Practices

Why Use Best Practices?
Best practices are techniques, tips, and tricks that have evolved over time through research, planning, and historical deployments. The process of yielding best practices typically involves a series of trial-and-error stages implementing a technique or methodology and then evaluating its effectiveness. If the result is positive, the technique is kept, refined, and distributed to other members of the organization. If the result is negative, the practice is thrown out and another technique is tested. This substitution repeats until a positive result is reached. In the end, the organization is left with a group of techniques and methodologies that when employed will increase the productivity and effectiveness of the implementation effort or production system as a whole. Best practices saves organizations from spending valuable time figuring out what somebody else already knows. In other words, you do not need to reinvent the wheel.

In many CRM or ERP software implementations there may be opportunities to quickly review key performance metrics against other similarly sized or like industry organizations in order to gain a comfort level or possibly provide insight for future planning. In most system implementations, there are likely to be many tasks and processes where we ask ourselves “Is this the best way to do this?” Oftentimes, that answer can be provided by comparing process benchmarks and benchmark metrics with similar organizations. Some very simple illustrative benchmarks may include the following:

  • Account Manager operational metrics (for example, the number of accounts managed, average number of touch points, frequency of touches, etc.)
  • New Hire Time To Effectiveness
  • Suspect to Lead to Prospect to Closed sale ratios and cycle times
  • Lead generation response and conversion rates
  • Sales win rates
  • Revenue per sales person by industry

Benchmarking reviews are sometimes closely aligned with best practices achievements and also provide a basis to quickly compare an organization’s own way of doing things with the methods of other like organizations. Oftentimes, the correct apples-to-apples comparisons demonstrate reference points which provide management confidence while on other occasions management can identify inefficient processes and target them for improvement. A sample benchmark table is presented below.

Sales Productivity
Revenue Per Employee By Industry
Insurance
$1,113,662
Energy
$1,040,708
Transportation
$567,802
Computers and electronics
$351,291
Food and beverage
$344,419
Telecommunications
$377,135
Construction
$332,327
Financial services
$327,564
Consumer products
$313,334
Manufacturing
$296,062
Advertising and marketing
$289,717
Defense contractors
$222,871
Software
$186,845
Education
$167,243
Environmental services
$159,579
Real estate
$136,966
Retail
$134,376
IT services
$131,780
Human resources
$126,138
Consulting
$111,999
Security
$104,765
Health
$87,139
Business Services
$52,832
Average Inc 500 Rev Per Employee
$165,049
Source: Inc 500 magazine. Results from average Inc 500 company's productivity.
 

Best Practices Best Used In Moderation

Our view that a minority of CRM added-value (contained in our Best Practices) can comprise the majority of the tangible and lasting value for our clients was substantiated by a comprehensive study. The study, by Accenture, surveyed top executives among communication companies that comprise 72 percent of the industry revenues in North America. The study evaluated the effects of the strategy, process, technology and human performance components of CRM on marketing, sales and service.

This study is one of the few known to have quantified the measurable impact of CRM capabilities on financial performance. The results of the study revealed that a small but select number of marketing, sales and customer service capabilities could have a major impact, potentially hundreds of millions of dollars, on a company's bottom line. A difference of as much as 50 percent in return on sales between average and high performing companies was attributed to CRM performance.

Examining 54 CRM specific capabilities, the study identified 11 specific areas that have the greatest impact on a company's financial performance. The study also claimed that each of these 11 capabilities had the potential to add $20 million or more to a typical $2 billion communications business unit's return on sales. These results contradict the traditional view that most CRM capabilities are equally important.