Utilizing technology to maximize your dental practice’s performance

Technology surrounds us and constantly provides analyses from every angle. How to interpret and use that data for the benefit of your practice can be overwhelming, but is essential to meeting your business goals and objectives. If you own your practice, you have probably spent countless hours looking at numbers trying to determine what you can do to increase profits, free up some of your time or get the most out of your hygienist. Your practice management software holds a tremendous amount of data, and when applied effectively, this data can provide valuable insight into your practice.

Dashboards – key performance indicators (KPIs) and benchmarking

In the past decade, we’ve seen major advancements in practice management software technology and it’s now easier than ever to extract meaningful data to use for key performance indicators (KPIs). Used primarily to measure and improve performance, KPIs are essential to driving your strategy and achieving your operational and financial goals.

When your practice’s data is accurately analyzed, organized and summarized, benchmarking and the use of KPIs can help identify areas of improvement and allow you to make adjustments that increase efficiency. Using KPIs ultimately allows you to focus your time on activities that improve your operations and increase profits. Making decisions without using KPIs as a benchmark can produce unnecessary trial and error and can sometimes take years to identify the actual culprit of an underperforming practice.

Real life examples

Below is an example how dental practices can use data to identify improvement areas and how pairing that data with industry benchmarks can help hone in on specific actions to take.

Example part 1: Practices using financial statements as a main source of information to make operational decisions can produce ineffective results.

Scenario A: A practice learned that advertising costs should be around 1% of production. Using this data as a benchmark, they discovered their advertising costs are at 3% and determine this as a potential area for savings.

Scenario B: Knowing the hygiene production to compensation ratio should be at least 3 to 1, a practice establishes that their hygiene department has room for improvement.

The numbers in the above scenarios provide useful information and point to some potential areas for improvement, however they only tell part of the story. Without additional data to apply in the context of their specific practice and its objectives, they’re left making educated guesses and applying process improvements through trial and error until results improve. Digging deeper into data and comparison against industry benchmarks can help direct process improvements and eliminate guesswork, as is illustrated in part 2 of this example.