Are There Any Differences Between Outcomes vs Outputs?

You might have lived your life thinking that 'outcome' and 'output' mean the same thing. Generally, you're right. But now, in at least the professional environment (and the IT world), these words have different meanings. 

This article will define the differences between the two words and provide some examples along with best practices. 

Outcomes vs Outputs: An example

Let's start small. Imagine it is Ali's 6th birthday. You go to the bakery and order an Avengers-themed cake for the party. 

If you ask a group of people about the outcome of this transaction, most of them think the answer is the birthday cake. This answer is wrong.

The outcome of this situation will be a happy birthday boy and a group of delighted, cake-filled 6-year-olds. The cake is the output that is provided by the bakery. 

If the cake was not tasty, or if the bakery used a different theme for the cake, then you would not have achieved the desired outcome, which is the happy kids.

Outcomes vs Outputs: The business definition

In business terms, this is how we define these two terms:

• The outcomes are what the business needs or wants to achieve.
• The outputs are the items or actions that contribute to achieving an outcome.

One simple way to think of this is:

• Outcomes are the results, 
• Outputs are the activities that support the desired results. 

For instance, a business outcome could be: increased customer satisfaction. An output that can help achieve this outcome is: A responsive online ordering system.

Outcomes are usually the benefit your clients or customers receive from the solutions you deliver. To move towards achieving it, you must truly understand their needs. 

• What challenges are they facing?
• What are the issues, priorities and constraints that are crucial to them?

Understand what causes them inconvenience, what is costing more than it should and what takes more effort and time than necessary. 

When you have the information, you can then focus on the outputs (or activities) that make positive changes in these areas. 

Deliver outputs, achieve outcomes

It is crucial to know the difference in these terms. Why? Because outputs are easier to measure compared to outcomes. 

• Outputs are always quantitative, with data available to show whether these have been delivered. They are easy to report on and validate. There is no grey area.
• Outcomes are harder to verify because they are both qualitative and quantitative. The success of your outcomes relies on the perception of the customers who receive the service. It is not easy to measure the customer's perception, but we need to find a way to do so. 

Keep in mind that outputs are just a means to an end. If your organisation has achieved all outputs, but you have not achieved the desired outcome, you will need to review the outputs to ensure they are correct. 

If you measure the achievement of outputs without outcomes, you could face the "watermelon effect". All reports are showing green (good!), but if you look closer, reports on the achievements of your outcomes are all red (bad), which means one thing: your customers are not satisfied.

 It's called the watermelon effect because, on the surface, everything looks good (green, literally), but when you crack it open, red is all you see.

It does not mean you don't need to report on the achievement of outputs. You just need to express these outputs in terms that the business understands. You have to show precisely how these outputs contribute to the business outcomes.

Instead of telling the business that you have achieved 99% service availability, you should report that clients were able to make 65,000 successful transactions per day. It would provide a clear business context and shows the value that the outputs delivered. 

How organisations can understand outcomes and outputs

In most companies, teams often think about the outputs they currently produce and then try to transition these outputs to the digital platform. 

What they need to do is to define the business outcomes they want to achieve. 

Once they understand the desired business outcomes, they can get rid of the old outputs and develop new outputs that would help them achieve business outcomes.

Whenever a team gets stuck when discussing the process, they can return to the stated outcomes. It will allow them to focus on the outputs they need.

See what you are creating with the services you are providing. Are you putting a cake on the table or delivering a room full of happy kids?

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