Efficiency vs effectiveness. Both terms are the lexicons of improvement. Combined with productivity the three terms are used perhaps more than any others in setting targets in strategic plans, defining metrics for dashboards and balanced scorecards, and setting boundaries for acceptable operational performance.
Defining Efficiency vs Effectiveness and Productivity
Somewhere in our development we seem to learn when and how to use efficiency vs effectiveness or when productivity is appropriate for use and when it is not. Although most people view efficiency, effectiveness and productivity as synonymous there are times when distinctions are useful. Interestingly, in looking at the uses of each term there seems to be clear associations in IT.
- Efficiency we associate with costs; power and energy; labor; and operations
- Effectiveness is associated with strategies; organizations; costs, and testing
- Productivity is associated with applications; tools; metrics; and labor
When each term is viewed within the context of education other peculiarities emerge suggesting we do not consider the terms as synonymous as we might think. To offer just one illustration consider the contexts of when we use effectiveness versus efficiency when discussing teacher performance.
Despite the tendencies there are countless misuses of the terms primarily it seems from a belief efficiency and effectiveness are equivalent in their meanings. This confusion results in lots of people using them interchangeably at times they should not. Having dealt with this for many years in various quality movements and under numerous ITSM/ITIL continuous improvement initiatives I decided to settle on some overly simple definitions for each term to help people distinguish each term.
- Efficiency is about doing the same with less;
- Effectiveness is about doing more with the same;
- Productivity is doing more with less
Efficiency vs Effectiveness
There are times when you have to move beyond the simple definitions and look at efficiency and effectiveness in more detail. This is usually when you want to begin to measure or quantify performance and show improvement.
Efficiency is a ratio of quality representing an ability to accomplish something with minimal inputs. Although you can focus on the output side of efficiency most often we focus on the inputs.
Effectiveness is mostly about an ability to adequately accomplish an intended purpose. It can be a go-no go measure for situations where the result is binary or it can be a success-fail ratio.
Efficiency tends to be more process oriented in its focus where effectiveness targets outcomes. Efficiency emphasizes the economies particularly time and money whereas effectiveness emphasizes how well the intended outcome was accomplished.
Within in IT there are countless areas to apply either concept as well as that of productivity. Given our willingness to use the terms interchangeably it may not matter so much how precise we are only that we achieve our intended goal. Although, when attempting to benchmark against peers or to industry performance standards it does start to get tricky.
The Conflict of Efficiency vs Effectiveness
The duality of performance measures can be a source of conflict. Just to illustrate we might judge a single help desk case as effective or not, while also judging overall help desk support for effectiveness. Similarly, the efficiency of a help desk case and overall efficiency measures require a different set of examinations.
Those involved with help desk performance know efficiency and effectiveness are always at odds with each other in a natural tension. That is why a balanced approach is preferred which relies more on productivity and a balanced scorecard of efficiency and effectiveness metrics.
Understanding the nature of the conflict between efficiency vs effectiveness is an essential part of IT decision making regarding services and technology. CIO’s experiencing the pressures of budget cuts must instinctively shift their thinking so that the forced efficiency doesn’t result in adverse effects on effectiveness.
For more on IT performance you might also read IT Performance Metrics: Balanced Scorecards & Leading vs Lagging Indicators which offers additional views on efficiency and effectiveness.