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Wednesday, 19 September 2018

BUSINESS BENEFIT



A business benefit is an outcome of an action or decision that contributes towards meeting business objectives. The definition serves well for many business planning and business analysis needs. Defining business benefits by referring to business objectives which provides practical basis for measuring, valuing and comparing both financial and non- financial benefits.
Sine qua non is a Latin phrase that translates literally into “without which not” when used in English prose, it refers to an essential condition or qualification, an indispensible thing o absolute prerequisite.

FINANCIAL AND NON- FINANACIAL BENEFITS
The business benefit concept is central to strategic planning and most firm of business case analysis where business people evaluate investment and actions by anticipating their likely cost and benefit outcome. Those purpuising these activities learn quickly, however, that some kind of benefit are more accessible to measure and value than others.
Most business people readily accept positive financial outcomes as business benefits. These are easy to measure in terms such as cost saving, revenue growth, cash inflows, or increased profits.
Many people, however are uncertain about how to measure or value contribution to business objectives, they define in non-financial terms. These may include for instance, changes in key performance indicators for goal having to do with:
a.    Customer satisfaction
b.  Employee management
c.   Risk reduction
d.  Branding
e.   Quality of service delivery
f.     Company image
In business, reaching objective has value. Action for its own sake does not necessary have value. In other words, actions and outcomes in the business setting have.
Business value only when they contribute towards meeting business objectives, and when contribute have financial value, they can be analyzed with investment metrics such as return on investment (ROI) or payback period.
Consequently, the search for business benefits and their values begins by understanding which business should be in view for every proposed.
1.  Investment
2.  Project
3.  Program
4.  Initiative
5.  Strategy change
6.  Reorganization
7.  Re-engineering plan
8.  Process revision
9.  Product launch
10.  Partnership
11.  Alliance
12.  Merger

BENEFIT COME FROM HIGH AND LOW-LEVEL OBJECTIVE ALIKE:
Benefit outcomes may appear in the form of progress toward high and low-level objectives alike for example:
Benefit: progress towards high level
STRATEGIC GOALS:
1.  Grow annual sales revenue by 10%.
2.  Become an industry leader in customer satisfaction.
3.  Establish brand leadership in the market.
4.  Become the industry leading low cost provider.

BENEFIT: PROGRESS TOWARD LOWER- LEVEL TACTICAL OBJECTIVES:
1.  Reduce average customer wait time on call centre phone by 50%.
2.  Increase product mean time between failure by 100%.
3.  Reduce office supplies expenses y 10%.

BENEFIT COME FROM ALL CLASSES OF OBJECTIVES.
Business objectives that define business benefit may include many different classes of goal for example:

FINANCIAL OBJECTIVES
1.  Increase earring per share y 25%.
2.  Increase average order size by 40%.
3.  Reduce costs on specific operating areas by 20%.

SALES OBJECTIVES
1.  Shorten average sales cycle time by 50%.
2.  Increase average order size by 40%.
3.  Increase sales revenue by 10%.

MARKETING OBJECTIVES
1.  Enter a new geographic market
2.  Achieve industry- leading market share.
3.  Branding and image objectives
a.   Establish brand awareness for a new product line
b.  Achieve industry recognition for product quality.

CUSTOMER OBJECTIVES
1.  Exceed competitive on customer satisfaction ratings.
2.  Become the vendor of choice for small and medium sized business.

EMPLOYEE  OBJECTIVES
1.  Improve employee satisfaction survey scares reduce annual employee turnover by 25% operational and efficiency objectives provides same day response to 100% of service calls.
2.  Increase employee productively by 10%.
3.  Penalty or problem avoidance objectives achieve compliance with environmental regulations reduce the risk of laboratory equipment failure.
4.  Improve data security.

CONCLUSION
And so on. The list of objectives that help define business benefits could extend indefinitely. Goals like these are the driving force in strategies, business plans and action proposals of all kinds. As a result, those who pursue such objectives can use the reasoning below to demonstrate business benefits.

REFERENCES
Robson, W. (1997) Strategic management E-information Systems 2ND Edition financial time/pitman publishing p.278-281



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