best practice
The term "best practice" refers to those practices that have produced outstanding results in another situation and that could be adapted for our situation.
Last updated: September 26, 2004.
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The term "best practice" refers to those practices that have produced outstanding results in another situation and that could be adapted for our situation.
Last updated: September 26, 2004.
|
6350 Quadrangle Dr., Ste. 200 Chapel Hill, NC 27517 NC Tel. 919-403-0251 Fax 919-403-0144 |
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http://www3.best-in-class.com
Employees:
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Best Practices lets its clients know how they stack up against the very best. The management consulting firm specializes in best practices benchmarking, in which companies can see how their own business processes compare to the "best practices" of industry-leading companies. The company provides customized research and consulting services; it also sells access to its business intelligence databases and has other membership-based services. Best Practices was founded in 1992 by CEO Christopher Bogan and serves companies in the financial services, manufacturing, pharmaceuticals, technology, and telecommunications industries. Its clients include GlaxoSmithKline, PSEG, and AstraZeneca.
Key numbers for fiscal year ending 2007:
Sales: $5.0M
Officers:
President and CEO: Christopher (Chris) Bogan
Competitors:
A.T. Kearney
Corporate Executive Board
Towers Perrin
Formulas and procedures that have proven successful in practice. In the IT world, best practices often refers to software development methodologies. See XP, RUP and Scrum.
Successful standard operating procedures for a given business type. Consultants observe and evaluate various firms and gather information on what works. They then offer their conclusions on the best practices for the given industry to another client.
The process of searching for new and better procedures by comparing your own procedures to that of the very best. The objective is to measure the key outputs of a business process or function against the best and to analyze the reasons for the performance difference. Benchmarking applies to services and practices as well as to products and is an ongoing systematic process. It entails both quantitative and qualitative measurements that allow both an internal and an external assessment. Process benchmarking is the process of assessing the quality of key internal processes by comparing them with those of other firms. In results benchmarking, a firm examines the end product or service of another company, focusing on product/service specifications and performance results.
Service and manufacturing firms often evaluate their performance in relation to the performance of industry competitors. The term "benchmarking" is often used to describe this process of comparing practices or strategies to other companies. The benchmarking process sometimes helps a firm find documented strategies and tactics employed by highly admired companies. Such practices are often referred to as "best practices."
According to the consulting firm Best Practices LLC, companies exhibiting a best practice may not be best-in-class in every area. But due to industry forces or the firm's goal of excellence, practices have been implemented and developed that have brought the firm recognition in a certain area. Typically the best practices result in a higher profit for the firm, and these more competitive business practices ensure a firm's survival or limit entry by new competitors.
Identifying Best Practices
Some firms are so well known for best practices in certain areas that it is not necessary to consult books, magazines, libraries, or the Internet to find the information. For example, Federal Express is often cited as having best practices among competitors in the expedited small package industry for their on-time delivery and package tracking services. Microsoft, the computer software developer, is cited as being innovative and creative, while the L.L. Bean outdoor products and clothing company is frequently lauded for their customer service practices and return policy guarantees.
When a firm is benchmarking to learn about the best practices of others, often these superior methods are found in companies outside the firm's key industry segment. Thus it is important to research and observe companies in a wide variety of settings, countries, industries, and even in the not-for-profit arena to learn better ways to continuously improve.
Information on best practices and innovative technologies can also be found on the Best Manufacturing Practices (BMP) web site. This site has as its goal to increase the quality, reliability, and maintainability of goods produced by American firms. One way BMP accomplishes this goal is to identify best practices, document them, and share the information across industry segments. They believe that by sharing best practices, they allow companies to learn from others'attempts and to avoid costly and time-consuming duplication of efforts. Companies profiled have submitted abstracts of what their organization does well and they include previous practices, changes to new processes, and information on implementation as well as quantitative details and lessons learned.
Learning from Award Winners
Other ways to identify best practices include observing businesses as a consumer or a mystery shopper. It is also possible to identify best practices by examining professional journals and business periodicals. Companies that win various awards often exhibit best practices to emulate. The Malcolm Baldrige National Quality Award winners are a good group of companies to benchmark for best practices. They have met the rigorous award criteria and have had success that allowed them to win this prestigious award. The Malcolm Baldrige National Quality Award is given to U.S. organizations that have shown achievements and improvements in seven areas: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and business results.
Winners of this national quality award have documented practices in the areas of quality and productivity as well as increased profits. The award highlights best practices by recognizing the achievements of those companies that improve the quality of their goods and services. Whether companies apply for the award or not, the criteria can be used by business, industrial, governmental, and other organizations in evaluating their own quality improvement efforts.
Industry Week, a publication aimed at manufacturers, has since 1990 set out to find and share stories of America's best plants. They later extended their coverage to include Europe's best plants. They have set out to define the best practices of world-class competition and highlight quality approaches, lean manufacturing, and employee empowerment. The publication stresses the fact that these practices can be implemented in a wide range of industries to improve competitiveness and productivity.
Learning about the best practices of others is a valuable way for firms to gather fresh insights into possible methods of improving a myriad of aspects of their operations. It should be an important part of an organization's strategic planning activities.
Further Reading:
Panchak, Patricia. "The Never-Ending Search for Excellence." Industry Week. October 16, 2000.
Patton, Susannah. "By the Numbers." CIO. October 1, 2000.
See also: Benchmarking
Best Practice is a management idea which asserts that there is a technique, method, process, activity, incentive or reward that is more effective at delivering a particular outcome than any other technique, method, process, etc. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.
The notion of a best practice is not new. Frederick Taylor (1911)[1] said as much nearly 100 years ago: “among the various methods and implements used in each element of each trade there is always one method and one implement which is quicker and better than any of the rest”. This viewpoint came to be known as the "one best way" (Kanigel, 1997)[2].
History, however, is filled with examples of people who were unwilling to accept the industry standard as the best way to do anything. The enormous technological changes since the Industrial Revolutions in England and the United States bear witness to this fact. For example, at one time horses were considered the 'best' form of transportation, even after 'horse-less carriages' were invented. Today, most people drive a gasoline, diesel, or bio-fuel vehicle—itself an improvement on the horse-less carriage.
A more recent example can be found in the 1968 Summer Olympics where a young man named Dick Fosbury revolutionized high-jumping technique. Using an approach that became known as the Fosbury Flop, he won the gold medal (in a new Olympic record height of 2.24m or 7 ft 4 1/4 in), by going over the bar back-first instead of head-first. Had he relied on 'best practice,' as did all of his fellow competitors, he probably would not have won the event. Instead, by ignoring 'Best Practice', he raised the performance bar—literally—for everyone. At the same time, however, he inadvertently created the new 'Best Practice', which has become the only high jump technique ever since. The purpose of any standard is to provide a kind of plumb line, and therefore that standard must be, "What is possible?" and not, "what is somebody else doing?" (Hoag & Cooper, 2006[3]).
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In real-world application, Best Practice is a very useful concept. Despite the need to improve on processes as times change and things evolve, Best Practice is considered by some as a business buzzword used to describe the process of developing and following a standard way of doing things that multiple organizations can use for management, policy, and especially software systems.
Best Practices are commonly used in many Enterprise Resource Planning (ERP) and Marketing Operations Management (MOM) systems. A Best Practice can be selected (generally from several competing options) and defined within a computer system. Then, any organization performing similar tasks can draw from the same procedure, and theoretically improve their operations.
Human Resources is one example of Best Practices as implemented in MOM systems. There are numerous standard procedures defined when managing an organisation's employees, volunteers, and contractors. By choosing a "Best Practice" or standard way of organizing and performing processes, the makers of MOM systems or Human Resource Management (HRM) system software are able to produce systems that can be used by multiple organisations.
Because such systems are restrictive by nature, implementing Best Practices by using such software may force organizations who have less formally defined procedures to conform to a single standard. Deviation from this standard may require a change to the software. Avoiding these related costs may be a motivating factor in choosing to conform.
Newly discovered Best Practices and changing industry standards often heavily influence ERP/MOM/HRM system design. Recent pressures on companies to change quickly in emerging global marketplaces have forced many vendors to be more flexible in how Best Practices are defined and implemented
The notion of 'best practices' does not commit people or companies to one inflexible, unchanging practice. Instead, Best Practices is a philosophical approach based around continuous learning and continual improvement.
For example, the American Productivity and Quality Centre (APQC) [1] suggests that three themes resonate through successful benchmarking and best-practice transfer efforts:
Best practices do not have one template or form for everyone to follow. In the context of business management, Best Practice is the concept that a good process, and planning, is being followed in the execution management of a project plan, and that changes to the initial plan, dependencies, and goals are being tracked and documented.
Best practices in a particular industry or other professional field can be exchanged, just like any instructional capital, by any means, though Internet-related information is most commonly exchanged this way:
There are numerous such efforts now in government especially in the English speaking world:
An emerging trend looms that many international organizations like to use 'best practice" methodology to promote the good systems, procedures of one country among its members.
The Japanese word kaizen has been imported into Western organizational language and stresses the importance of efforts to improve constantly. This ethos is antithetical to the commonly accepted notions of best practice. Some organizations consider their Best Practices to be a badge of honor, believing that having adopted this technique, method or process that further at the core of the concept, the defining of methods used to get things done. Benefits often include the assurance of quality results and consistency when the process is followed.
Domains where Best Practices have been applied include:
Best Practices are used in technology development, such as new software, but also in construction, transportation, business management,sustainable development, and various aspects of Project Management.
Best Practices are used within any business type including, but not limited to: sales, manufacturing, teaching, programming software, road construction, health care, insurance, and accounting.
Documenting and charting these procedures and practices is a complicated and time-consuming process often skipped by companies, even though they may practice the proper processes consistently.
Some consulting firms specialize in the area of Best Practice. Often "Best Practice" consulting firms offer pre-made 'templates' to standardize business process documentation. A key strategic talent is required to provide good "Best Practice" consulting to organisations: the ability to balance the uniqueness of an organisation with practices it has in common with other organisations.
In many cases the cost of making modifications to a system or process which comes standard in a template or with a delivered computer application forces an organisation into using "Best Practice". Often it is to the benefit of the organisation. Sometimes a "Best Practice" will hurt an organisation. Good "Best Practice" consulting firms can assist organisations in making decisions appropriate for the organisation.
Good Operating Practice is a strategic management term, usually capitalized. More specific uses of the term include
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