How Do You Run a Better Business
How Do You Run a Better Business?
Rather than “guesstimate” key data, consider a proven software solution.
Scot Morris, O.D., F.A.A.O.
CEOs use various tools to see where their enterprises can become more profitable or where they are potentially hemorrhaging cash. One of these tools, business intelligence (BI) software, also offers benefits to optometric practices.
BI software analyzes data to create a hierarchy of performance metrics (benchmarks) that inform the user of progress toward specific business goals or standardized benchmarks such as frames turnover. The software often analyzes performance data or processes so you can make decisions or create strategies. BI software programs can work from a variety of platforms to share, extract or transfer data. The software also typically allows the user to query, search or analyze specific details.
BI in practice
Put in optometric terms, think about the power of knowing exactly what your true profitability is in one frame line vs. another. What if you could determine within two clicks that one of your opticians was selling more anti-glare coatings to VSP patients and had a higher new frame sell percentage in your managed care patients than another? Would that change how you trained your opticians? Would it change which optician you designate to help a specific type of patient?
Think about it. Your practice creates a huge amount of information in the form of e-mails, memos, notes, exam records, reports, image files, video files, and marketing material and news. How are you using this information? Or, are you using it at all?
Because of the difficulty of properly searching, finding and accessing profitability data, many organizations choose to “guesstimate” or “eyeball” it. Though critical data can be challenging to obtain, guesswork can ultimately lead to poorly informed decisions.
Investigating all solutions
Admittedly, even with electronic health records (EHR) and a sophisticated spreadsheet, data input was burdensome. And while my information was accurate, at times I struggled with decisions: Was I buying the right products, given price sensitivity and growing shopping diversity? What was the right frame board mix? I searched for a BI solution that would give me the answers. Thankfully, a number of vendors (EHR companies, businesses associates with EHR companies or stand-alone vendors) now offer BI solutions.
I investigated each of the solutions. While each had its benefits, I selected one that provided the detail of my spreadsheet without the data input requirements. It revolutionized how I think as a businessman. It showed me that I was leaving a lot of money on the table and overpricing and overcharging in other areas. Not only does it simplify business reporting, it looks at traditional benchmarks and trend analysis for optical COGS, sales, practice efficiency and staff and doctor efficiency.
BI solutions allow you to track the two areas of your business (services and product sales) individually and drill down to the specifics of a single transaction. For example, if you found that one of your opticians was selling twice as many polarized lenses as the other, you would be able use the sales techniques of the more successful optician to train other staff.
With tools like this at our disposal, we are finally becoming more adequately equipped to treat our practices as the businesses that they are. OM
DR. MORRIS IS THE DIRECTOR OF EYE CONSULTANTS OF COLORADO, LLC, AND MORRIS EDUCATION & CONSULTING ASSOCIATES. E-MAIL HIM AT SMORRIS@EYECONSULTANTSOFCO.COM.
Optometric Management, Issue: September 2011