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Measuring of KPI’s is essential to improving business performance and patient care. How do you know how to improve, if you don’t know what’s wrong?
“What’s measured improves” was father-of-modern-management Peter Drucker’s soundbite. Drucker wasn’t quite right. With analytical tools embedded in the most basic of spreadsheets, we can analyse and record too much. The key to improving your business and patient care is knowing what to record, what to set it against and how to analyse it – in short, creating, benchmarking and taking learnings from your key performance indicators. Not measuring data against KPIs is like driving without your headlights on – dangerous, silly, and likely to end in a mess.
Not all veterinary clinics are data-savvy. 60% of clinic owners don’t use financial concepts to run their business. A 2016 Geckoboard study noted 49% of the UK’s small to medium-sized businesses don’t monitor KPIs – although 50% admitted they should. Setting and measuring KPIs is key to understanding your business and securing profit, as a recent Society of Practicing Veterinary Surgeons study showed. Surveying 100 practices, they found over 50% of respondents scored ‘below average’ or ‘poor’ in their net profit ratings. With 18% net profit rated as ‘excellent’, the study’s bar was not that high.
How should veterinary practices track their data? By measuring the four key areas of any business – people, customers, process and financial performance – the areas that Sparkline founder and CEO Greg Robinson based Scorecard upon. Developing Sparkline’s Scorecard after 30 years in the industry, his collaboration with vet owners, IT professionals, accountants and data analysts has produced an intuitive business intelligence system that tracks over 40 KPIs – and the 300 supporting trends that spark from them. Backed by Henry Schein Veterinary Services, the world’s largest vet healthcare provider, the Scorecard is also the first system to set industry benchmarks, allowing clinics to directly compare their performance with that of competitors.
Robinson developed the Scorecard to give smaller practices a corporate’s level of reporting. Many business intelligence systems come with high installation, maintenance and staff costs, leaving smaller, struggling vet practices to forgo them altogether. “Most practice owners I talk to are candid enough to admit that they are losing revenue”, Robinson muses. “However, ask them how much and this is usually met with a shrug. They don’t know the scale of the problem and, more particularly, how to solve it”. Sparkline’s Scorecard sets out to change that. It reporting system requires no additional hardware, software or IT specialists, and is set up within 24 hours. Scorecard can be integrated into most leading practice management systems, and doesn’t require manual input. Most importantly, it’s easy to read, using a traffic light system that codes problem areas red, opportunities orange and congratulatory areas green. It’s designed to help vet clinics make the right decisions – with the right data behind them.
Dr. Chris Reardon, owner and director of Queensland’s Warwick Veterinary Clinic, is one of 1,500 clinics using Sparkline Scorecard. Installing the system in 2014, his first year’s revenue jumped by 20%, followed by 11% in 2015 and 7% in the following years. “Sparkline is the compass on my roadmap to business success,” he says. “At the start of the month it gives me a detailed management level analysis to benchmark our performance against our strategic goals and expectations. Then year-on-year, I can get a helicopter view to make sure that what I’m trying to achieve is coming to fruition and my company as a whole is meeting or exceeding industry standards.” Dr. Reardon’s improved profits allowed him to re-invest in his business, improving standards of care with better staff and equipment.
A focus on care is an oft-cited reason for not tracking KPIs – but Robinson insists you can’t have great care on a lagging business model. “I’d be the first to agree that it’s not easy running a busy vet practice and, yes, patient care is undoubtedly the number one priority”, he notes. “However, if the business is not operating to its full potential, then ultimately this will have an adverse effect on the service provided”. Dr. Reardon backs this up. “Veterinary professionals all want to provide good patient care. If you’re running a successful practice you generate more revenue, so you can afford more specialist equipment, which enables you to provide even better patient care”, he explains. Sparkline’s Scorecard was developed to identify positive and negative trends across your business, allowing you to monitor better care practices, or trial a new service, such as dentistry, over time. Processes, staff members and satellite practices can also be compared directly, with Scorecard suggesting easy areas of improvement that can help your business thrive.