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Effectiveness vs. Efficiency in Strategic Management

triathlon-452572_640Measuring Effectiveness vs. Efficiency in Strategic Management
We recently conducted a survey asking companies about their pain points related to their VAT recovery efforts.  A full two-thirds of respondents reported a lack of visibility to the amount of VAT spent on cross-border transactions including P-cards, travel expenses, online purchases, supply chain costs, conventions, AP foreign, suppliers, and more. There is clearly a need for better solutions for VAT recovery – solutions that are both more efficient and more effective for your business. What’s the difference?
Effectiveness vs. Efficiency
An effective business consistently brings in positive results and ends the day with an encouraging bottom line. An efficient business runs smoothly with fewer resources and often has a quick turnover.
A company’s effectiveness can be easily measured by focusing on key performance indicators (KPIs). Results-based KPIs might be increased revenue, growth of client base, or improved customer service. These KPIs are also a good way to measure management effectiveness, after all, it is management strategic decisions that ultimately affect the KPIs.
When it comes to promoting efficiency, management’s strategic decisions are often focused on reducing resources, while utilising time-saving strategies. Some examples might be efforts to save electricity, improve employee communications, or reduce time spent in staff meetings. Other efforts to promote efficiency might include shared executive assistants, reduced inventory or shorter staff shifts.
Are both needed?
While efficiency and effectiveness sound similar, they are not. Efficient companies are not necessarily effective, and effective companies are not always efficient. Management must learn to stress both strategies; decisions must consistently be taken that balance the company’s effectiveness and efficiency. While improved efficiency processes are often focused on reaching short-term objectives, strategies for improved effectiveness must consider the company’s long-term goals. A company whose management balances their decisions to ensure the business remains both effective and efficient benefits from higher levels of productivity using fewer resources. Implementing efficient business objectives enables a company to achieve effective business goals.
VATBox VAT Recovery is both effective and efficient
 VATBox maximises the recovery of VAT ‒ it is exceedingly effective at boosting visibility, control and the corporate bottom line. VATBox enforces a single, global process across all entities, using automation to meet KPIs of improving compliance and maximising refunds. The VAT solutions by VATBox also provide comprehensive analytics, providing companies with real-time visibility to all ongoing claims both at aggregate and detailed levels. VATBox offers insights and analysis to optimise future VAT spend and VAT recovery.
VATBox automatically detects and recovers VAT – both foreign and domestic – wherever the tax is charged. The behind-the-scenes process is both efficient and painless for businesses and employees. VATBox captures the data and evidence from multiple sources, matches and validates the data, pinpoints any leaks or missing evidence, determines whether it qualifies for VAT recovery, and if it does, then submits the claim.
Food for thought: When it comes to VAT recovery, are your company’s efforts both efficient and effective?
4 Comments
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