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