Tag Archives: insurance claims

Internal Vs. External Benchmarking Of Insurance Claim Data

Data-driven analysis is a critical decision-making tool for Construction Financial Managers and other industry leaders.

Decision-making is arguably the most important responsibility of company leadership.

Companies that make better decisions make fewer mistakes, and achieve a distinct competitive advantage in the marketplace.

The underlying purpose of benchmarking is to continually improve the quality of organizational decision-making.

Overview
As construction risk management consultants, we help contractors prevent accidents, mitigate claims, and reduce the total cost of risk through a continuous improvement process.

We believe companies must instill management accountability for continuous improvement by linking performance measurement to both prevention activities (leading indicators) and operational results (lagging indicators). As the adage goes:

“What gets measured is what gets done.”

In our consulting roles, we frequently help companies establish realistic performance measures by conducting various types of claim and loss analysis.

This type of data analysis is usually the starting point in a performance improvement process — and a common practice among insurance agencies, brokerages, carriers, and risk management consulting firms.

In addition, we are often asked to conduct a benchmarking analysis that compares one company's claim and loss data against peer companies or to the construction industry as a whole.

Benchmarking
The term “benchmarking” refers to the comparison of a company's performance results against those of similar peer companies. Benchmarking evolved out of the quality improvement movement in the late 1980s and early 1990s.

Its initial intent was to identify leading companies regardless of industry sector, and apply their best practices to improve one's own company. Over time, benchmarking has become synonymous with process improvement.

The traditional view of benchmarking required two separate disciplines focused on performance improvement: measures and methods. Identifying and capturing performance indicators (the measures) is only the first step; developing and implementing performance improvement (the methods) is the second and most important step for the benchmarking process to be truly effective.

The Health Club Analogy
There is limited value in benchmarking without applying new methods to address continuous performance improvement. Performance improvement requires more than the measurement of performance indicators; it requires the implementation of changes in management disciplines to attain improved operational results.

Using only performance indicators without implementing new methods to improve operations is akin to joining a health club and expecting the benefits without actually using the equipment or committing to an exercise program.

Merely jumping on the scale and gauging your weight relative to others doesn't help you achieve your own weight loss goals anymore than comparing your pulse and respiration rate to others helps you attain your aerobic or cardiovascular fitness goals. What matters most is that a person embarking on a weight loss or fitness program stays committed to the process and monitors his or her own progress.

Similarly, we believe the ongoing monitoring of claim and loss data specific to an individual company is even more important than the initial measurement of insurance claim and loss data relative to other companies.

Baselining As Benchmarking
The term “baselining” refers to the internal benchmarking process that occurs when a company compares its performance against its own results year after year. Ongoing, internal monitoring allows a contractor to determine if the company's claim and loss trends are improving or deteriorating, and to make the critical performance improvement decisions necessary to facilitate a change in results.

Referring back to the health club analogy, baselining does not compare an individual's weight and aerobic fitness to that of the other health club members. Instead, individual fitness goals and measures are established, monitored, and tracked to verify continuous personal improvement.

Similarly, a construction company can develop a baseline analysis of its loss cost performance by reviewing loss and claim data for a minimum of 3-5 years. Company results are compared from year to year, and ideally are broken down by operating entity, division, project, manager, or even crew levels.

Exhibit 1 provides a sample of a baseline analysis that compares one company's relative claim and loss performance within all of its operating divisions.

2001-2006 Total Claim Cost per Man-Hours Worked by Division

 

This analysis reviews the historical loss cost data for the entire company and breaks it down into meaningful data relative to each operating division. The total workers' comp, Comprehensive General Liability, and auto liability incurred claim costs (sum of paid and reserves) for each company division over a five-year period were compared to the total man-hours for each division, producing a cost per man-hour figure.

The results illustrate dramatic differences in total claim costs per man-hour for each division. This baseline analysis was the first step in raising awareness of the predominant loss leaders within the company. This increased awareness led to a detailed analysis that established plans of action and realistic cost targets by company division for the upcoming year.

External Benchmarking
We acknowledge that there are numerous benefits to measuring the frequency, type, and cost of insurance claims compared to peer groups and/or the entire construction industry. Such analyses provide the ability to:

  • Identify leading types and sources of claims
  • Establish strategic objectives to prevent the occurrence of common industry claims
  • Increase knowledge of industry best practices
  • Determine operational performance improvement priorities
  • Create awareness among managers and employees about the costs of claims and the impact on profitability
  • Post positive results on company websites and for use in other marketing materials

The Bureau of Labor Statistics provides safety-related data so that companies can externally benchmark injury and illness data against specific industry groups. (Check out the Web Resources section at the end of this article for more information.)

In addition, Bureau of Labor Statistics data is used to calculate and compare OSHA Recordable Incident Rates and Lost Workday Incident Rates, both of which are common construction industry benchmarks. This data is useful when making high-level comparisons within construction industry segments relative to injury and illness rates.

We also use external benchmarking analyses to establish risk reduction, loss prevention, or cost containment goals. In “Risk Performance Metrics” by Calvin E. Beyer in the September/October 2007 issue of Building Profits, a sample benchmarking comparison shows a representative contractor's duration of lost workdays workers' comp cases in median number of days compared against the median duration for the industry. Results such as these can highlight the importance of an increased focus on injury management and return-to-work programs.

The benchmarking analysis in Exhibits 2A and 2B compares a contractor's workers' comp claim and loss performance to an established group of peer contractors in the same specialty trade. (These companies engaged in similar work, and performed in states with similar insurance laws and legal climates.)

WC Claims Per $1 Million WC Payroll by Company

The analysis was based on total incurred workers' comp costs and total number of workers' comp claims as compared to payroll for each entity. Overall, Company D had worse results than the other three companies.

This prompted an in-depth review of Company D's workers' comp losses by division and occupation. As shown in Exhibit 3, the company experienced significant claim frequency and severity issues within the first six months of employment.

WC Claim Count & Cost by Length of Service

These findings triggered the development and implementation of specific activities designed for Company D's new employees.

Below are some of the activities that were incorporated into the formal improvement plan:

  • hiring processes
  • new hire skills assessments
  • orientations
  • daily planning meetings
  • formal training

Other Sources Of Benchmarking Data
Professional associations and industry trade/peer groups also provide comparative data for benchmarking purposes.

The Construction Financial Management Association's Construction Industry Annual Financial Survey is an excellent source for understanding the key drivers of contractor profitability. We use the survey data to determine comparative profit margins for different types and classes of contractors when we calculate a revenue replacement analysis to show the additional sales volume needed to offset the cost of insurance claims. (This technique was highlighted in the “Risk Performance Metrics” article previously mentioned.)

Similarly, the Risk and Insurance Management Society (RIMS) conducts an annual benchmarking survey that reviews insurance rates, program coverages, and measures of total cost of risk.

An example of a peer group data source for benchmarking is the Construction Industry Institute (CII). The Construction Industry Institute is a voluntary “consortium of more than 100 leading owner, engineering-contractor, and supplier firms from both the public and private arenas” (www.construction-institute.org). It develops industry best practices and maintains a benchmarking and metrics database for its participating members.

Another peer group example involves members of captive insurance companies sharing and comparing claim and loss data for the group as a whole. There is a major advantage when a true peer group shares benchmarking data: Such data sharing often leads to peer pressure in the form of increased ownership and accountability for improvement by the companies shown to be the poorest performing members.

We continue to search for more new sources of industry best practices and comparator data. A possible emerging source for the construction industry is the National Business Group on Health. This organization has developed standardized metrics known as Employer Measures of Productivity, Absence and Quality™ (EMPAQ®).

EMPAQ® helps member companies gauge the effectiveness of their injury and absence management and return-to-work programs. The founder and principal of HDM Solutions, Maria Henderson, served as a project sponsor for EMPAQ® from 2003-2007, and co-presented with Calvin E. Beyer on “Return to Work as a Workforce Development Strategy” at CFMA's 2008 Annual Conference & Exhibition in Orlando, Florida.

Limitations Of External Benchmarking
We fear that the increasing popularity of external benchmarking analyses may indicate that it has become a “quick fix” solution or a management fad. When asked to conduct an external benchmarking analysis, we always ask the following questions:

  • What is your purpose in seeking these comparisons with other companies?
  • Who are you trying to convince and what are you trying to convince them to do?
  • What specific peer companies should be used for comparative purposes?
  • Are these companies (and their operations and exposures) truly similar enough for a fair comparison?

Beware Of Pitfalls
There are many hurdles to surmount in locating suitable companies for external benchmarking comparisons. Generally, when benchmarking comparisons can be made, more often than not the greatest value lies in the workers' comp line of insurance coverage.

Here are some key factors to consider when choosing contractors for external benchmarking comparisons:

  • Percent of self-performed work vs. subcontracted work
  • Payroll class codes and hazard groupings of selfperformed work
  • Differential geographic labor wage rates
  • Payroll rate variances between union and merit shop operations
  • Size of insurance deductibles
  • Claim reporting practices

For example, claim reporting practices must be similar in order to minimize distorting the frequency or average cost of a claim. If one or more comparison companies self-administers minor claims or does not report all claims to their carrier, using carrier loss reports for the comparison is an invalid method.

We also find that comparing the frequency of claims and total loss dollars divided by thousands or millions of dollars of payroll (exposure basis) is a helpful workers' comp benchmark between companies of similar operations in similar states.

Likewise, a suitable benchmark for auto liability performance compares the frequency of claims and total loss dollars per one hundred vehicles.

When benchmarking fleet-related claims, ensure that the number and size of fleet vehicles — as well as the type of driving (urban vs. rural) and the total number of miles driven annually — are similar among the contractors whose claims are being compared.

Benchmarking comparisons of Comprehensive General Liability insurance results are especially challenging due to delays in reporting third-party bodily injury and property damage claims, in addition to the expected long tail of loss development for these claims.

All of these factors are compounded by vastly different litigation trends and liability settlements in various states and regions of the country.

Common Limitations Of Data Sources
Whether or not you intend to develop a baseline of your company's claim data or to benchmark your company's performance against a peer company, there are several issues that must be successfully resolved regarding the data's quality and integrity.

Based on our experience, we classify the key challenges associated with exposure and claim/loss data into the categories shown in Exhibit 4: availability, accuracy, accessibility, standardization, reliability, comparability, and date-related problems.

Seven Data Challenges

Value Of Multiple Measures
Evaluating data from various sources and different angles is also valuable. Why? Because it's possible to gain a better understanding of the whole by dissecting the parts. This practice illustrates the principle of multiple measures.

This approach is substantiated by 2006 research, which concluded that the “simultaneous consideration” of frequency and severity provides a more comprehensive result than performing analysis based solely on one factor.1

This is similar to our approach when we conduct a “Claim to Exposure Analysis” and review historical frequency and severity vs. the relative bases of exposure for each line of casualty insurance coverage.

Returning to the health club analogy, when starting a formal exercise program, you often begin with such general baseline measurements as height and weight; this is usually followed by additional measurements, such as BMI, body fat content, and the girth of arms, legs, and chest (the baseline).

As we all know, weight alone is not always the best indicator of success in fitness efforts. In fact, since muscle weighs more than fat, an increase in total body weight may actually occur after beginning and maintaining a fitness program.

Although you might not experience a dramatic weight drop, you could see a reduction in waist size and BMI — positive changes that would not be evident unless multiple measures were being used and reviewed.

Benchmarking insurance claim and loss data performance is like comparing one person's height and weight against the ideal height and weight charts based on the entire population.

Wouldn't it be more effective to establish your baseline weight and other multiple measures initially so you can see the progress you are making?

This is similar to the baseline measurements that a company should take (as well as the multiple measures) that are necessary to meet your company's performance improvement goals for financial success, operational excellence, or risk reduction.

Web Resources:

  1. U.S. Department of Labor BLS Incidence Rate Calculator and Comparison Tool
  2. National Institute for Occupational Safety and Health Work-Related Injury Statistics Query System
  3. Risk and Insurance Management Society, Inc. Benchmark Survey
  4. Construction Industry Institute Benchmarking & Metrics
  5. National Council on Compensation Insurance, Inc. (NCCI Holdings, Inc.) Benchmarking Tools
  6. Employer Measures of Productivity, Absence and Quality EMPAQ
  7. CFMA's Construction Industry Annual Financial Survey with Benchmarking Builder CD

Authors
Cal Beyer collaborated with Greg Stefan in writing this article. Greg is Assistant Vice President, Construction Risk Control Solutions, at Arch Insurance Group. As a member of the Southeast Regional team in Atlanta, GA, Greg supports underwriting and claims in risk selection, claim mitigation, and risk improvement activities. He is also responsible for high-risk liability risk reduction initiatives including contractual risk transfer, construction defect prevention, and work zone liability management.

1 Baradan, Selim, and Usmen, Mumtaz A., “Comparative Injury and Fatality Risk Analysis of Building Trades,” Journal of Construction Engineering and Management, May 2006, pp. 533-539.

North American Property & Casualty Vendors: Partners In Claims Excellence

This article was excerpted exclusively for Insurance Thought Leadership from a 43-page research report by the author and published by Aite Group on December 12, 2012 as further described here. This new report from Aite Group reviews the many different vendors, products, and services that help Property & Casualty insurance carriers achieve claims excellence. Based on a May through August 2012 Aite Group survey of North American Property & Casualty insurance company claims executives, the report assesses the executives’ views of and reliance on various vendors, products, and services.

Introduction
The insurance industry has recently been transformed from operating in a product-centric model to operating in a customer-centric model across the entire enterprise, from sales and marketing to underwriting and from claims to billing. Today’s new consumers are better informed than ever, have a heightened sense of service entitlement, and are quick to exchange information, experiences, and opinions with one another using smartphones and social media, where their influence exceeds that of insurance company marketing. And over the past several years, in a fiercely competitive marketplace, North American insurance carriers have spent billions of advertising dollars on promoting their companies based almost entirely on the responsiveness and quality of their claims services.

It has long been understood that the claim is the “moment of truth” for property & casualty insurers with their policyholders, and it is truer today than it has ever been. When a claim is filed — by an average 10% of all personal lines insurance policyholders every year or, put differently, by the average policyholder once every 10 years — the claim is more often than not triggered by a traumatic or at least unpleasant event. Consider as well that the typical claimant has been dutifully paying his or her insurance premiums for years with nothing tangible to show for it and now, at this time of high anxiety, needs and expects prompt and attentive assistance.

Vendors play a crucial role in enabling carriers to achieve the elusive goal of claims excellence. Supporting the entire insurance claims process (though mostly transparent to claimants) is a large, well-coordinated, mostly virtual team of claims professionals with diverse skills and responsibilities. These professionals are supported by tens of thousands of claims software, services, and solutions vendors. Further, these third-party service providers frequently interact in-person with claimants earlier in the process and more frequently than do insurance claims representatives and as such become the face of the insurance company.

The extent to which all of these many different resources work together on behalf of the claimant and provide excellent customer service can dictate the claimants’ level of satisfaction and, in many cases, their intent to renew their insurance with that carrier as well as the opinions they will share and post about their claims experience. Because the challenges facing today’s property & casualty claims executives, including ongoing resource constraints and the many other factors described above, are unprecedented in terms of their number and complexity, claims vendors that best help them solve these challenges are the most highly valued and rewarded.

Claims Software
Carriers rely heavily upon a large and diverse variety of proprietary and third-party claims software systems and databases to manage every aspect of claims operations, from first notice of loss (FNOL) through claims payment. There are several hundred discrete operational processes across property & casualty claims, including auto, property, and workers' compensation lines of business. These processes include the claims management system (CMS) — the “core” or main operating system supporting the entire claims operation — and many other vendor software solutions — of which our report looked at vendor management software, automobile repair and property loss estimating software, and casualty management software.

Example: Claims Management System Software
Underpinning and supporting the entire claims operation is the carrier's claims management system, defined as the “core system” and the system of record for all activities and interactions for all claims. The extent to which internal and external applications, including vendor products and services, are integrated with the claims management system determines the overall efficiency and effectiveness of the claims process and, in turn, the policyholder satisfaction with the process.

Claims Services
Property & casualty insurance claims departments rely more heavily upon third-party claim service providers than one might imagine. Using the services, software, and solutions of about 250,000 claim service providers, U.S. property & casualty insurers spend approximately US$300 billion in the course of resolving 100 million claims. As discussed in this report's introduction, third-party service providers frequently interact in-person with claimants and are often the face of an insurance company. Moreover, the extent to which all of these many different resources successfully work together on behalf of claimants can dictate claimants' satisfaction with their insurance company.

For all of these reasons, successful carriers value these relationships and spend a great deal of time and effort selecting, managing, and working closely with vendors to ensure claims are handled quickly, courteously, and professionally, no matter how complex the process may be “behind the curtain.” While there are many others, the services and solutions included in our report include First Notice of Loss, claims analytics, insurance replacement rental cars, total loss vehicle valuation, salvage management, collision repair networks, national independent appraisal and adjusting services and litigation management solutions.

Example: Insurance Replacement Rental Cars
Insurance replacement rental cars are used extensively by insurance companies to provide temporary transportation to claimants whose automobiles are being repaired after an accident (most auto insurance companies include or offer temporary rental car coverage for a small additional premium). Of all the claims vendor services used by carriers, this category may be the most critical in terms of ability to influence the customer claims experience, policyholder satisfaction, and retention. In addition, it represents a significant overall claims cost for insurance companies and a major challenge for claims adjusters in terms of logistics, the many associated claims process touchpoints, and overall time consumed in managing the process.

Enterprise has come to dominate the insurance replacement rental car segment for a few simple but not-so-obvious reasons. Primarily, it focused on and perfected solving the unique needs of this very different segment of the rental car market. Its competitors treated insurance replacement rentals as just another small portion of their second-largest segment (the local market), choosing instead to focus on their larger and still-growing airport markets.

Enterprise quickly identified the many major pain points of insurance claims adjusters who were tasked with managing temporary rentals as part of the auto accident and repair claim process, and it ultimately simply assumed all of those responsibilities in exchange for the carriers' rental car business at competitive prices. Enterprise also understood the critical value of developing working relationships with local insurance agents and body shops, and it tasked their branch managers with doing both aggressively. Finally, Enterprise's family-owned and -run business philosophies have informed its business operations, including its college graduate-focused recruiting practices, its internal career-promotion policy, and its fierce focus on customer service.

Enterprise's impressive success may well be the insurance industry's best example of the rewards available to vendors who learn how to execute and manage insurance claims process outsourcing to the highest possible level of customer satisfaction.

The graph below illustrates respondent perception of the listed insurance replacement rental car vendor solutions' performance, regardless of whether respondents currently use them. As might be expected given the explanation above, perception of Enterprise performance is almost completely positive.

Perception of Insurance Rental Car Replacement Services

About This Report
This article is excerpted from a 43-page research report by the author and published by Aite Group on December 13, 2012 as further described here.

Companies with products and services named in the complete report are ABRA, Accenture, Acuity Management Systems, Aderant, Allegiant Systems, Allstate Insurance, Aon eSolutions, AQS Inc., Arbitration Forums Inc., Athenium, Audatex (a Solera company), Auto Claims Direct, Auto Injury Solutions, AutoNation, Avis Budget Group, BlueWave/Cover-All, Bottomline Technologies, Brightclaims, Caliber Collision, CARSTAR, CCC Information Services, CGI, ClaimForce, ClaimHub, Claim Toolkit, CodeBlue, Collision Revision, Copart, Corvel, Cox Enterprises, Craig/is, Crawford & Co., CSC, Cunningham Lindsey, CynCast, Detica NetReveal, Eagle Adjusting, Enterprise Rent-A-Car, Exigen, EXL Services, FairHealth, FairPay, FINEOS, Fiserv, FixAuto, Gerber/Boyd, Group 1, Guidewire, The Hartford, Hertz, HSG, HyperQuest, IA Net, IBM, Ingenix, Innovation Group, Insurance Auto Auctions, ISCS, ISO, Legal Services Group (LSG), LexisNexis, Lynx Services, Maaco, Manheim, Mitchell, Mitratech, MSB, NuGen IT, PDA Appraisal, Pega Claims, Penske, Performance Gateway, PowerClaim, Premier Prizm, Procura, QCSA, Quest, Ravello, Safelite Solutions, SAP, SAS, SCA Appraisal, Service King, Simsol, Sonic, Sterling, StoneRiver, SunGard, Symbility, Systema, Total Resource Auctions, Trillium, Tropics, Trover Solutions, Trumbull Services, Tymetrix, Van Tuyl, Verisk Analytics, Vista Equity Partners, Wipro, Wolters Kleuwer, and Zywave.

Selecting, Evaluating and Building Partnerships with Subrogation Vendors

If instead of being a subrogation professional, you chose to be a carpenter or a finish woodworker or a landscaper, the question of how best to accomplish the task at-hand would be easy for you … utilize the tool, or tools, the job demands to get the best possible results. The same applies in the field you did choose to work within. The tools take a different shape or form, but they’re “tools” just the same. Instead of a hammer or a rake and shovel, your tools might just be called “vendors.” And just as with the more conventional definition of tools, selecting one begins with determining what has to be accomplished …

Identifying Your Needs
While many claims appear on the surface to be similar to the untrained eye, you know better. Each has its own unique characteristics. Consider this: two claims come to you from the same adverse party. Both involve (allegedly) the making of an illegal left turn at an intersection controlled by a light with a left-turn arrow. One claim may involve a total loss, while the other may be nothing more than the scratch-and-dent variety. Different levels of damages incurred may very well translate to differing levels of complexity, and different needs of your use of outside agencies, vendors, to successfully handle the claim and satisfy your needs.

The tools required to complete the job are most certainly different between an auto loss needing bodywork, and a home fire loss needing cleanout and restoration expertise. Even within a home loss, the devastation from a fire requires a different type of expert investigator than damage from a leaking hot water heater that may have been caused by a manufacturing defect, faulty installation, or a component failure.

An employee injured in an automobile accident during the performance of their job calls for a different set of “tools” than a passenger in one’s car needing to visit the emergency room as a precautionary measure.

The commonality of the above of course, is that the subrogation professional needs to evaluate liability apportionment first and foremost. Once responsibility for the loss can be ascertained, a thorough, accurate accounting of the damages sustained is needed as well. This is obviously not a one-size-fits-all undertaking. A cause-and-origin investigator and an independent adjuster will have dramatically different skill sets or analytical expertise knowledge bases. Knowing your circumstances will help you determine the type of person you need to hire. Remember, every day brings new claims, and new claims bring new challenges.

The optimistic reality though is that solutions exist.

What’s important to acknowledge is that these solutions may be type-of-loss specific in some instances, while being region or locale specific in another. They could also be line-of-business specific. Regardless of your organization’s size, no one can perform optimally in a vacuum. Everyone can benefit from looking outside their organization for people specializing in services that meet the identified needs. And whatever you do, don’t discount that the elimination of an outside vendor might be just as important as knowing which ones you want to rely on! To take it a step further, your “outside” resource may not be outside at all — that resource may be another co-worker or specialist within your own company.

Sometimes the more narrow the scope of one’s expertise, the more accomplished they are in that area of need. Think of the medical profession: cardiologist, podiatrist, neurologist, the list seems endless. To fulfill a need that calls for a cardiologist, you’d never consider seeking out one of the others mentioned.

The same applies to subrogation.

First seek out an expert in the specific area of need you’ve identified. Then seek out the best. Ask your colleagues for recommendations. Word of mouth advertising is powerful, both positively and negatively. It can help you find a diamond in the proverbial rough, or it can help you avoid falling prey to someone who talks a better game than they actually deliver.

Finding the Best Fit
In addition to utilizing colleague recommendations, one practical tip for selecting a vendor is to attend industry conferences and trade shows. For subrogation professionals, this means including the National Association of Subrogation Professionals (NASP) annual national education conference on your “hit list.” As important as their breakout sessions have proven to be, just as critical to the attendee is time spent in the conference Exhibit Hall. One of the great benefits of a conference like this is in one setting you can meet with peers from other companies, resource partners, and experts that can fulfill a wide variety of specialized needs. It’s time-efficient and cost-effective because you don’t have to jump on separate airplanes to meet them.

And the best part?

No two vendors are exactly alike. You can have discussions and discover that it’s not at all unusual to develop new ideas regarding your current claim inventory. You’ll return home with practical tips and solutions. The people you meet in an Exhibit Hall are universally passionate about their niche in the industry, and they’ll be more than excited about sharing with you what makes them unique, what makes them better.

Your job becomes accumulating as much information as you can, then determining which service provider can best meet your needs for any given scenario. After that, go get them and put their feet to the proverbial fire. Make them justify why they’re the best choice to give you the results you expect. Ask them point-blank why you should choose them instead of their biggest competitor. Ask for references. In particular, beware of the vendor that criticizes their competition instead of promoting their strengths. There’s a saying in business that goes like this: if the competition doesn’t lie about us, we won’t tell the truth about them! In other words, don’t select a vendor based on what they tell you someone else can’t do; select a vendor based on what they can do! Let their results, let their success with their clients, be their judge.

And after all of this, remember, your colleagues will benefit from your efforts at these events.

Evaluating Vendor Performance
Once you’ve selected your vendor(s), make a point to evaluate their performance at least quarterly. Above all, never become complacent with your vendor selection. If their level of customer service drops off, they may be taking you for granted. Complacency leads to declining performance and stale results. Always strive for better. Ask your vendors to provide you with reports that quantify their performance, and ask them to analyze it for you. It forces them to identify, potentially, their own weaknesses or areas of improvement need. Benchmarking these results against those competing for your business also ensures that the one who does the best job for you is the one you’re utilizing the most.

If a product or service you are paying for is not meeting your expectations, don’t hesitate to make a change. The short-term inconvenience of incorporating a change may very well result in significant long-term benefits for you and your company. Don’t settle for an inferior product or service. Even if you invest more of your “capital” (time and money) into possible alternatives, you’ll either ensure you’re using the best solution for you, or you’ll realize who not to use. Sometimes addition happens as a result of subtraction.

Above all, never let time be your decision maker. A hurried decision often becomes a wrong decision. The right solution (or more likely solutions, multiple) is out there. Once you find them, challenge them. But challenge them while fostering the relationship with them. Turn them into genuine partnerships.

Having the right “tool” for the job is the most critical component of accomplishing the task. You may just need a bigger toolbox.