Benefits of Benchmarking
Making smart comparisons of your organization’s operating ratios and other metrics to those of similar organizations can create a baseline for performance improvement. That’s why OPIE Software and the OPIE Choice Network are investing in a web-based benchmarking initiative called the “Choice Dashboards.”
Moving the organizational performance needle—or, to begin with, making the decisions that lead to better results—depends on good data input. It is vitally important that your practice is consistent in the way it inputs data into your system and that the information is accurate, too. Moving the needle, so to speak, is driven at a fundamental level by some notion of where you want to go. If you want to be the best, how will you know when you are?
To achieve that kind of understanding, measuring your own organization’s performance is essential, but meaningful comparison to other organizations can lead to additional insights. Those comparable data points are benchmarks, and they are an invaluable source of information for business professionals. With that in mind, the Choice Network has developed a web-based Dashboard tool, designed to visually represent key business operations, such as the number of revenue producing visits, referral source activity, A/R Aging and much more.
In its 1993 Benchmarking Management Guide, the American Productivity and Quality Center, a benchmarking authority, created this definition of benchmarking: “Benchmarking is the process of continuously comparing and measuring an organization with business leaders anywhere in the world to gain information which will help the organization take action to improve its performance.”
Simply put, benchmarking tells you where your organization stands within the profession—and more specifically, how you compare to peer organizations—so important decisions are sure to be fully informed.
Benchmarking provides you with a reliable basis for comparative analysis and facilitating strategic decision making. Knowing how your organization compares with others in terms of operational performance gives you practical insight into where your organization excels and where it may be lagging
When you identify an area where your organization differs from its peers, the deviation provides an entry point for inquiry. A difference in performance measures does not necessarily mean there is an issue to be addressed, but looking at the variations helps you explore important questions. Using data in decision making supports good stewardship, whether in the ongoing management of the organization or in fulfilling fiduciary duties.
“Benchmarking isn’t just an add-on; it is a necessary tool, empowering and enabling financial administrators, advisers, and owners to answer the question ‘How do I compare?’,” says Nat Bartholomew, CPA, principal-in-charge of associations and membership organizations for CliftonLarsonAllen.
Financial teams regularly use key performance ratio statistics such as liquidity and net profitability. As businesses continue in their quest to “do more with less,” measurements of key metrics and the ability to understand how your company compares to others can help inform strategic operational decisions.
Actionable data starts with good data, and a good performance benchmarking relies heavily on the willingness of the profession to share. Of course, everything you share is de-identified and treated in accordance with HIPAA and Privacy guidelines. Data quality and accuracy improve as participation increases. A low response rate to data-collection efforts results in samples so small that the benchmarks have little real-world meaning. By participating in the benchmarking and sharing your data, you are increasing the value of the dashboards for the entire community.
O&P Care Professionals are famous for their dedication to and passion for their patients and the community we serve. Participating in the Choice Dashboards is one way to give back, contributing to the accumulation of better, more accurate data that strengthens the entire profession.