A real and quantifiable example about “output” and “outcome”
A question that we hear more and more often is “what’s the different between output and outcome”.
The simplest explanation for output and outcome is that output refers to the user stories (features) that the development team has completed, while outcome refers to the value of the software delivered to the customer.
In order to provide a clearer explanation, here's a real and quantifiable example.
Years ago, I worked as a consultant in the Voice department of a High-tech company. They want to develop an intelligent Call-out assistant system for a bank's loan marketing department.
The proportion of customers willing to continue to talk after answering the phone was only about 5%, through real call-out.
The development team developed an intelligent speech recognition system that can first determine whether the customer is willing to continue talking and, if so, transfer the call to the marketing staff.
This intelligent voice assistant has an identification rate of up to 80%.
So, the OUTPUT is: a speech recognition system with 80% identification rate.
What about outcome? What is the value of this system to the marketing department?
Let's start our math class.
Suppose 100 customers, through the real call-out, there will be 5 people willing to talk.
Through this system, how many people would like to continue to talk, and then transfer to the marketing staff?
Of the 5 people who are willing to talk, only 80% of them are judged to be willing to talk and to be transferred to marketers.
5 * 80% = 4
Of the 95 people who are unwilling to talk, 20% (1-80%) of them may be mistaken for a willingness to talk.
95 *20% = 17
So, to the marketing department, the value of the system is that, of all the phones that marketers answer to, 4 of every 21 clients will be willing to keep talking. The result is equivalent to about 20% (4 of 21) of people willing to continue talking.
At that time the business unit and Product Owner were not very satisfied with the number 20%. I told them that this is not the value we are presenting to our customers.
The value that this system brings to the Marketing Department is including:
The proportion of customers willing to continue talking is raised to 4 times the original. (5% -> 20%)
Marketing staff because there are more customers willing to continue to talk, so frustration also follows down, increase the probability of a deal.
Just for your reference.
Any input would be appreciated