Inputs, Activities, Outputs, Outcomes & Impacts

Measures fall into five categories:

1. Inputs: These are things that an organisation spends money on.
2. Activities: Work that people do. E.g. write code and design a graphic.
3. Outputs: The things that people produce. E.g. A report or a new release of software.
4. Outcomes: Desirable things that a customer or user of a product experiences. E.g. Being able to earn or save more money than before.
5. Impacts: Results that the organisation achieves when customers or users of a product achieve their desired outcomes. E.g. increased revenue or profit.

The problem most organisations face, which is often reflected in the things they measure, is that measuring activities and outputs is easy while measuring outcomes is often more difficult.

Delivering valuable outcomes to customers is essential to reach their goals. Working more hours (activities) and delivering more features (outputs) does not necessarily lead to improved customer experiences (outcomes).

While it is possible for organisations to improve impacts without improving customer outcomes, doing so usually harms the organisation, such as when it reduces product quality to improve profitability.