Efficiency vs. Effectiveness: Defining the Difference

Almost every organization, be it a corporation, non-profit or government strives to be much effective and more efficient. Organizations practically exercise important strategic and operational decisions based on how different alternatives bequeath increase or decrease susceptibility or effectiveness. But more organizations and managers struggle to understand the difference between efficiency and effectiveness and often get wrapped around the axle debating semantics rather than actually evaluating the alternatives at hand.These concepts atomic number 18 often used interchangeably and with little consistency, and in some cases improvements to efficiency or effectiveness tail appear to be interdependent. For example, an organization that is desire to invest in its call center would likely face alternatives that would resign both increased efficiency and effectiveness improvements.Implementing an automated call dissemination system can reduce resolution time and book set out staffing levels in the call center, delivering against the efficiency criteria. Alternatively, providing call center operators better acuteness into client profiles can promote cross selling and allow agents to get wind and satisfy unmet customer needs. This alternative addresses the effectiveness criteria. Projects typically favor iodine criteria or the other, but they argon not always mutually exclusive.Investments can occasionally deliver on both the efficiency and effectiveness criteria, these (rare) barfs allow an organization to do more with less. An example of this type of project is a transaction system that provides better customer analytics and increases productivity. However, in those cases where a project is touted as impacting both criteria it is important to ask critical questions to ensure outcomes are not being confused.For example, if an organization invests in automated sales describe solution expecting an increase in efficiency and effectiveness, the solutio n may plain replace a manual process with an automated one, improving scarce efficiency. If the solution does not provide additional data or shrewdness it is not likely to drive revenue growth, or effectiveness. More invariable application of these definitions should help align expectations around outcomes of your most important decisions. For more information contactTed Schneider Principal, SwitchPoint LLC emailprotected Brian Leslie Principal, SwitchPoint LLC emailprotected Increases Efficiency Improves Effectiveness Definition Allows organizations to do the equal amount of work with fewer resourcesAllows organizations to generate higher revenues, independent of resources requiredExamples automation of manual processes Organizational restructuring / outsourcing Expansion of online presence Increased insight into customer behavior / preferences