Global process harmonization: Best practices vs best fit?
Anybody involved in an international ERP project has been looking into harmonizing global processes. Global process harmonization is mostly about finding the common process denominators based on your defined process value concept. If there are many common denominators, there is basis for a centrally managed ERP system, and if it is not the case, one should opt for a more decentralized and thus more flexible model.
It is an act of balance when deciding on best practices vs. best fit. Depending on the industry you work in and your company structure, one size may fit all subsidiaries. However, for many companies, one size does not fit all, and local adaptation is needed. Different local legislation, account plans, infrastructure, organizational cultures, and languages are typical trade-offs.
Overall, you need a standard platform that allows for adaptation in a way that brings most value to your company.
Global process harmonization: How to select the right processes
So which processes do you prioritize and adopt? Best practice or best fit? Many organizations fall into the best practices trap, i.e. the situation where a company adopts a given process based on the belief that it is the best way to carry out a number of concrete actions. If the qualification of the process is inadequate, best practices turn into best known practices, which are simply – yes, inadequate.
If the concept of best practices is being stretched to best global practices, there are additional factors to take into account. Some processes are more suitable for deployment across borders than others. This is why best fit processes have come into the equation.
Best practices are the best way to implement a given action, whereas a best fit process is what works best in a given situation.
Internally oriented processes, for example administrative processes, will often be able to fit in a best practices scenario, while market-driven processes often require a best fit approach, since these typically fall outside the company’s control area.
- Best practices: Internal processes, a given action
- Best fit: External processes, a given situation
Global ERP process owners vs. one global ERP partner
Best practices require global process owners, which is a major challenge for most organizations. A global process owner is accountable for defining the most suitable process to implement in the company, and it is also the global process owner who is responsible for continuously optimizing and anchoring the process.
You should consider whether your company is willing and able to delegate this responsibility and decision-making power to global process owners? And if so, which organization and processes are needed to ensure the anchoring of this responsibility? If process ownership and leadership is missing, internal fights and resistance will occur, a gap will be created between the different parts of the organization, and the benefits of the ERP system will be reduced.
As a global ERP partner, we can help you structure data and processes at corporate level as well as local level. Find inspiration in our 10 10 tips for successful ERP across borders blog.
You can also contact us if you would like to discuss your specific situation and considerations on how to implement an ERP solution across borders.