01/15/2024 - Articles

Efficiency and effectiveness - the difference explained simply

Effectiveness and efficiency are two common terms in project management and are often used interchangeably, but actually refer to different concepts. Do you know what to do if your project manager asks you to work more efficiently? Should you work more or deliver better results? To clear up any misunderstandings, we explain the difference between efficiency and effectiveness using many practical examples and provide tips for effective and efficient project work.

What is effectiveness and what is efficiency?

In practice, the two terms are often confused, used imprecisely or synonymously. However, the differences are huge, as the definitions show.

Definition of effectiveness

The Duden dictionary defines effectiveness as "the ability to achieve desired results". Effectiveness refers to whether the result achieved corresponds to the previously desired and defined goal. If you act effectively, you are doing something that brings you closer to your stated goal. When the project manager evaluates the effectiveness of your work, it is about WHAT you have done and whether the result meets expectations.

Prerequisite for effectiveness: clear goal definition

In order to determine whether an activity is effective, the goal must first of all be established and clearly defined. Only when the goal is known can measures and solutions be developed to achieve this goal.

Definition of efficiency

The Duden dictionary defines efficiency as "the ability to achieve desired results with the least possible effort". Efficiency therefore refers to how well resources (such as time, money, materials) are used to achieve a specific goal. It is about completing tasks quickly and without waste. It is about cost-effectiveness and achieving the best possible cost-benefit ratio. Act efficiently, act in the right way. When the project manager evaluates the efficiency of your work, it is about HOW you acted to achieve the goal.

Prerequisite for efficiency: process optimization

In order to decide whether the way in which a goal is achieved is efficient, i.e. conserves resources, it is essential to have at least one objective benchmark. It therefore makes sense to try out different solutions and methods in order to get as close as possible to the most efficient way of working and to establish best practices. If you want to increase efficiency, you need to work on establishing practicable processes and continually optimizing them.

Efficient or effective? - A mnemonic

Effectiveness refers to the result, the effect. Efficiency refers to the economy of implementation. So, as a rule of thumb, you could say:

Doing the right things is effective. (The work is purposeful. The action has an effect).
Efficient is doing things right. (The work is resource-efficient).

Efficiency describes the "HOW" and effectiveness the "WHAT". A task can therefore be processed efficiently and not effectively if the measures and actions work towards the wrong goal.

Work less and still achieve set goals and achieve excellent results: Those who manage this work effectively and efficiently at the same time.

Efficiency and effectiveness: 4 examples from business and project management practice

It is not always easy to say which actions are effective or efficient and to what extent. The difference becomes clear in the following four practical examples.

Example 1: All roads lead to Rome?

If your declared goal is to travel to the eternal city to drink an espresso in the Piazza del Popolo, you could immediately set off south on foot. You will get closer to your destination step by step on foot. However, it is more efficient if you go to the nearest train station or airport instead and buy a ticket to Rome there.

But is it really that simple? No. Because what is really efficient in terms of project management depends on which target dimension the efficiency should relate to:

  • If time is a scarce resource, we do everything right with the plane.
  • However, if our goal of "drinking an espresso in Rome" is to be achieved in the most CO²-neutral way possible, the bicycle is probably the best way to reach the goal efficiently. We need to adapt our process accordingly.
  • If we have to act in a cost-saving manner and time is not a scarce resource, walking or cycling are probably the most efficient alternatives to reach our destination.
  • If both time and costs are limited, the right measure is not to adapt our method and our processes, but rather to adapt our goal definition and make cutbacks: If the goal is now just "drink espresso" we can down the espresso in the office coffee kitchen and thus act not only effectively, but also highly efficiently.

Particularly in the context of project management, it is important to know which target dimension of the magic triangle in project management our statement refers to.

Example 2: Effective and efficient product marketing

Companies A and B both set themselves the goal of increasing their turnover by 10% within six months.

Company A launches a marketing campaign and hires external digital marketing, advertising and PR agencies. Ads are immediately placed on all channels. Paid ads, print ads, radio and TV spots are produced and published. Headhunters are used to recruit new sales staff, who plunge into a cold-calling marathon. After six months, it turns out that sales have actually increased by 10%. This means that company A has achieved its goal and the desired result. The action was effective.

Company B first plans the "sales increase" project specifically in project management software. It uses data to analyze which channels have been used to acquire the most customers. It then takes targeted advertising measures only there. The sales employees contact satisfied customers and start a recommendation campaign so that they in turn recruit new customers. All work, efforts, successes and suggestions for improvement are documented in order to further optimize the process during the course of the project and after its completion. This was efficient management and action, as the resources of time, budget, personnel and technology were used in a targeted and careful manner. At the same time, the action was also effective, as company B also achieved the target of a 10% increase in turnover.

It is important to note that effective action and efficient action are not always independent of each other, but are often linked. A task can be completed efficiently and effectively if it has the right goal and the resources are used in the right way.

Example 3: Effective and efficient using the example of vacation management

To apply for leave, your company's employees contact the HR department. There they receive a printed analogue application form, which they take to their workplace or home to enter the desired leave periods. Employees then hand in their leave requests to the HR department. The HR department receives the request, checks whether there is still enough leave budget available and forwards the request to the relevant team or project manager.

If they give their approval, they return the signed application to the HR department. The HR department informs the employee whether the leave request has been approved and enters the leave in the calendar, where colleagues can see it and take it into account when planning their own leave. The request is then scanned, digitally indexed and archived in the document management system, and the analog paper document is filed away. In the event that the leave request is withdrawn or rescheduled at a later date, the document is retrieved to initiate the change process.

This procedure is effective - the goal is ultimately achieved and all requirements are met: The employee can request their leave, the required approval and documentation processes are followed and transparency is ensured as everyone can see the appointment. The process just described is by no means efficient. The process is too complex and the amount of organization and time required to achieve the desired goal is too high. This is not in the interests of efficiency.

With software, you can ensure significantly greater efficiency by automating the vacation process. Planning, requesting, approving, authorizing, entering with the calendar, archiving and setting up a substitute arrangement are all done centrally, without media disruptions, quickly and in a controlled manner using a standardized workflow with just a few clicks in the tool.

If the software solution for leave management is integrated into project management software, such as Projektron BCS, employees' leave times are synchronized directly with resource management. Other team members and project management know immediately who is available and can plan ahead and reliably with limited personnel resources. The approval process can be modelled as a BPMN process and thus fully digitalized and automated. Applications are managed efficiently and effectively.

Example 4: Effectiveness and efficiency in software development

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A team of developers at a software development company is tasked with completing a software project to develop a new CRM system for a customer. It sets itself targets in terms of both effectiveness and efficiency:

In this case, the effectiveness goal is to create a CRM system that meets the customer's requirements. An effective solution would precisely address the customer's needs and achieve the intended results. The finished CRM system contains all the required functions. The customer is satisfied with the result. The development company benefits from customer satisfaction, positive reviews and referrals.

The efficiency goal is to make optimum use of the given resources in order to achieve the result. It is efficient if the development team can meet the customer's requirements within a reasonable time frame and with minimal resources. The team uses agile methods such as scrum and tools to speed up the development process, make optimum use of the team members' working time and not exceed the project budget. The customer benefits from faster delivery and lower invoices. The development company benefits because it can satisfy more customers in less time.

Can you work efficiently without being effective?

In fact, it is not often that you can work efficiently without being effective at the same time. In practice, however, this is possible. For example, someone can work very quickly by using resources such as time or materials efficiently, but if the work does not deliver the desired result in the end, it was still not effective.

The following scenario illustrates this:

  1. A work instruction is formulated on a ticket that is required to complete a project task.
  2. The assigned agent starts working on it.
  3. In the course of processing, the task changes or the task has become obsolete in order to achieve the objective.
  4. The project manager or person responsible for the work package fails to inform the agent of this.
  5. The processor therefore works efficiently towards a result that is no longer necessary to achieve the goal.

In software development, it is very easy to work efficiently without being effective. In terms of efficiency, for example, an engineer creates software code that never needs to be executed in the end.

To prevent this dilemma, a well thought-out change management process with subsequent validation of the requirements provides a remedy. The goal must always be clear to everyone involved. Well-organized project communication is therefore essential.

Effectiveness and efficiency in project management

In project management and project work, both efficiency and effectiveness are required in order to achieve the project objective in line with the overarching corporate objectives. Anyone who subordinates everything in project work to the idea of efficiency, including effectiveness, runs the risk of planning highly efficiently in the wrong direction, handles the wrong projects highly efficiently, efficiently fills positions in the project team with the wrong personnel and efficiently and consistently pursues the wrong goals.

  • Especially at the beginning of a project, i.e. in the initialization and definition phase, your approach should be characterized above all by effectiveness. This is about the sober analysis of the initial situation, the documentation of the client's requirements and the definition of specific, measurable, realistically achievable and scheduled goals (SMART method).
  • Only after you have operationalized the goals and defined individual project phases and milestones in the work breakdown structure, sorted them in the schedule and scheduled them in a flowchart, can you choose the appropriate methods to achieve these goals in the most resource-efficient way possible.
  • You should strive to further increase efficiency throughout the entire project, but it is also important to regularly scrutinize the effectiveness of the project's progress as part of the status reports.

5 tips for effective and efficient working methods in project management

Tip 1: Goal definition

Before you start the project, you should define clear and measurable goals that you want to achieve. This will give you a clear idea of what you want to achieve and ensure that the project is moving in the right direction.

Tip 2: Prioritize

Prioritizing is important to ensure that the most important tasks are completed first. This can help ensure that the project stays on schedule and that the most important results are achieved.

3rd tip: Time management

Time management is crucial to ensure the project stays on schedule. Set timelines for each task and make sure they are adhered to.

Tip 4: Communication

Effective communication from day one is important to ensure that everyone involved is on the same page and that everyone knows what they have to do. Make sure there are regular meetings and updates to identify and resolve issues early.

Tip 5: Resource management

Effective resource management is important to ensure that all resources such as time, money and personnel are used optimally. Make sure that the right resources are planned for each task and that they are used efficiently.

What is more important, effectiveness or efficiency?

The short answer is that both are important.

However, this question always depends on what goals are being pursued. In some cases, it is more important to work efficiently in order to save resources such as time and money and to speed up processes. In other cases, it is more important to work effectively to ensure that the goal achieved actually delivers the desired result.

Ultimately, however, the primary focus should be on effectiveness, as the clear definition of goals and their fulfillment are the absolute foundation of productive work. Without an effective way of working, however, you will not get very far, as you will waste too many resources and achieve little output with a lot of input and effort. That would be uneconomical.

Effect before efficiency

Effectiveness always comes before efficiency (even in the alphabet). First, goals must be clearly defined and the steps required to achieve them. Processes and methods must then be optimized as far as possible in the interests of efficiency. Effectiveness + efficiency = success!

What is the difference between productivity and efficiency?

Efficiency and productivity are two terms that are often associated with each other, but they describe different things.

Efficiency refers to how well resources such as time, materials or labor are used to achieve a goal. It is about how an action, task or process is carried out to achieve the desired result with minimal use of resources.

The term productivity, on the other hand, refers to how much output is achieved in relation to the input (resources). It is about how much value (e.g. in the form of goods or services) is generated with the available resources.

For example, a company that introduces a new production machine that produces the same amount of goods in half the time would be considered more efficient. If the same company produced the same amount of goods in the same amount of time, but with fewer resources, it would be considered more productive.

Efficiency describes HOW work is done. Productivity describes HOW MUCH work is done. If you take measures to increase efficiency, you will usually increase your productivity at the same time. The resources that you save in one project thanks to efficiency can then be invested directly in other projects and thus produce more.

Tony Kleinschmidt, Controlling, KCW GmbH, Berlin

"What we really appreciate about Projektron BCS is that the software has made our work more efficient in many areas. For example, the fact that project data is managed centrally in BCS and is no longer collected in several places at the same time. This means that everyone involved in the project is automatically on the same level of information, and projects can be evaluated with less effort after completion."

How can software increase effectiveness and efficiency in project management?

Comprehensive project management software such as Projektron BCS is a valuable support for any project team in every respect.

1. Project Planning

Software can help to simplify project planning by providing tools to create Gantt charts, schedules and resource plans. This makes it easier for the project team to define and prioritize goals and tasks.

2. Task Management

Software can help to better manage tasks by providing tools to create to-do lists, ticket systems, Kanban boards, reminders and status reports. This makes it easier for the project team to track the progress of the project and identify problems at an early stage.

3. Communication

Software can help to improve communication within the project team by providing collaboration tools such as chat and video conferencing functions. This makes it easier for the project team to communicate and solve problems quickly and easily.

4. Resource Management

Software can help manage resources more efficiently by providing tools to manage budgets, schedules and personnel. This makes it easier for the project team to allocate resources optimally and minimize effort and project costs.

5. Reporting

Software can help simplify reporting by providing tools for creating reports and analysis. This makes it easier for the project team to track the progress of the project and identify problems at an early stage.

6. Document Management

Software can help to manage documents more efficiently by providing tools to manage and approve documents. This makes it easier for the project team to access the information they need quickly and easily.

7. Project Monitoring

Software can help monitor the progress of the project by providing tools to create dashboards and reports. This makes it easier for the project team to see the progress of the project at a glance and identify problems at an early stage.

8. Risk Management

Software can help to identify and manage risks in the project more effectively by providing tools to create risk strategies and plans. This makes it easier for the project team to proactively manage risks and ensure the success of the project.

9. Project Closure

Software can help to simplify project closure by providing tools to create final reports and documentation. This makes it easier for the project team to document and present the results of the project.

10. Project Archiving

Software can help to manage the project archive more effectively by providing tools for managing project documents and data. This makes it easier for the project team to access previous projects and benefit from previous experience.

11. Process Establishment and Development

Software can make a decisive contribution to process establishment and development by providing tools for defining project procedures, standard operating procedures and continuous improvement processes. This helps the project team to create effective and efficient work processes that can be developed and optimized over time.

Gesine Chatfield, Head of IT, IQTIG - Institute for Quality Assurance and Transparency in Healthcare, Berlin

"Projektron BCS is a reliable and indispensable management tool for us to manage our projects efficiently and to use our resources sensibly and purposefully. The license system that BCS provides makes it possible to give employees different rights and thus grant everyone access without everyone being able to change or see everything."

Stefan Gebel, Head of Requirements Management and Planning, Munich Hospital

"The project management module forms the basis for binding and reliable planning of our plans and projects, taking into account the resources available in the relevant period. By consistently developing our project plans, we can significantly improve the efficiency of our processes."

Projektron BCS helps your project team to carry out projects more effectively and efficiently by improving communication and collaboration within the team, simplifying task management and supporting project planning. In BCS, you plan processes and successively optimize them based on experience and data. In this way, BCS helps you to complete your projects more successfully and increase the productivity of the project team.

Get to know Projektron BCS without obligation and start your free trial!


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About the author

Like all other departments at Projektron GmbH, the marketing department also uses the possibilities of the Projektron BCS project management software to deploy its resources in a targeted manner and implement projects efficiently. Kai Sulkowski is an editor in the marketing department, certified according to IPMA and always informed about current developments and innovations from the world of project management.


Projektron explains the difference between efficiency and effectiveness using many practical examples.

Projektron explains the difference between efficiency and effectiveness using many practical examples.

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