|
Home |
Software Providers |
Consultants |
Articles |
Columns |
Reviews |
Headlines
|
|
|
- |
| - |
|
- |
Entire contents Copyright © 1999 Business Insurance "Measuring performance; Tools for gauging efficiency of
internal, external services"
|
|
BENCHMARKING. Performance standards. Compliance audits. These are becoming familiar words and terms to risk managers. Much of Corporate America is undergoing significant changes to become more efficient and is using these tools, as well as strategies like downsizing, process re-engineering, outsourcing and others, to accomplish this goal. This search to improve efficiency of operations encompasses all business activities: management, sales and marketing, customer service, administration, product development, research and development, information systems, etc. This drive for greater efficiency applies not only to internal operations but to external relationships with vendors, as well. How does this apply to the user of risk management services? With the risk management department undergoing the same level of scrutiny by ``corporate re-engineers,'' why not apply these same tools and techniques to evaluating the department's external vendors? The efficiency of brokers, insurers, third-party administrators, risk management information system vendors and a host of ancillary groups (such as medical and vocational rehabilitation providers, defense attorneys, safety engineers, etc.) all can be assessed. In short, the bottom line today is ``compare and evaluate.'' To decide what is the best or most efficient method to do this, clients want answers to the following questions:
Given that this is Business Insurance's Spotlight Report on Risk Management Systems & Analysis, I thought this would be a particularly germane topic, since organizations are constantly looking for some methodology of evaluating their systems and vendors. Furthermore, since I will be coordinating and speaking at next spring's Risk & Insurance Management Society conference on the topic of ``Measuring the Value of Vendor Services,'' it makes sense for me to discuss some of the more common techniques and tools available for use by risk managers. These same tools and techniques are applicable to the various types of service providers used by risk managers. The three major methods of evaluating efficiency are performance assessment reviews, benchmarking studies and outsourcing analyses. Lack of time and space prevent me from going into great detail to explain the usefulness of these three techniques. However, in my experience, these three are among the most valuable that can be employed. Performance assessment reviews. This is one of the best methods of determining the efficiency of an operation, service or department, whether internal or external. For a service, such as claims administration, the operation is evaluated and compared against:
At Deloitte & Touche, we call this method measuring the ``PAR value'' of a service. Of course, to do this requires that we know what the standards are. In the claims industry, for example, there are no published standards. Yet most claims professionals would generally agree on standards based on principles of claims handling, case loads per adjuster, timeliness of claimant contact and the like. Therefore, we have gathered generally acceptable performance standards to facilitate the review process. The RMIS is a particularly useful tool for analysis. With the right system and data, one can perform a PAR analysis 36. Copyright© 1993 Business Insurance |