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How Program Efficiency is Calculated

 , updated on July 11, 2023
Program efficiency the ratio of program output to input. This is a basic measure that can be used to benchmark programs against each other. The following are common types of program efficiency.

Calculation

Efficiency is a financial metric based on the value of inputs and outputs:
program efficiency = (output / input) x 100

Example

A program of modernizing a family of software products has generated revenue of $40 million and has cost $12 million:
program efficiency = (40/12) x 100 = 333.3%
In this context, a program efficiency ratio over 100% indicates a program that is currently adding value.

Usage

Efficiency is best applied to highly optimized processes that produce a regular steam of outputs such as a production line. Revenue from programs may take a long time to materialize and may be bumpy. As such, program efficiency isn't necessarily useful as compared to return on investment or net present value. If your program has non-financial benefits such as improving quality of life, cost effectiveness is typically a more appropriate metric.
Overview: Program Efficiency
Type
Definition
The ratio of program output to input.
Related Concepts
Next: Efficiency Formula

Program Management

This is the complete list of articles we have written about program management.
Acceptance Criteria
Change Management
Acceptance Testing
Due Diligence
Lessons Learned
Backlog
Program Controls
Program Efficiency
Program Evaluation
Business Transformation
Program Metrics
Program Planning
Program Risk
Program Success
Constraints
Project Branding
Project Management
Feasibility Analysis
Risk Management
Impact Evaluation
Risk Identification
Scope Creep
More ...
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