In this article we explore this very question and more!
When companies are deciding whether to invest in a particular project or adapt their services to improve in different areas, they sometimes struggle to determine the benefits it may bring. To help them move forward, one of the best ways to find this out would be to establish the hard and soft benefits of the project to help determine all the benefits the project may have. But what is the difference between hard and soft benefits?
Hard benefits are benefits that can be proven with results and statistics making them easy to determine as they are based solely on measurable facts. They are used to show whether or not the project would lead to an increase in revenue or save the company money. Hard benefits are used for businesses to determine the success of a project or investment once complete. One of the advantages of determining hard benefits is that the results can be used as a persuasive technique to go ahead with moving the project forward as they are based on actual statistics, rather than less defined results. A hard benefit could include results such as the project leading to an increase in product sales or a reduction in the cost of operation once the project is complete.
Soft benefits are any benefits of a project that do not relate to statistics or monetary improvements. They are often known as ‘indirect’ benefits that are not part of the potential project’s budget. Soft benefits can be any positive factor that arises from carrying out the project but may not be related directly to it. The only issue with soft benefits is that they can be difficult to define. However, soft benefits can be extremely valuable to determine in any project as although they may not relate directly to the specific project, the benefits may be an advantage to the project overall or the workspace and employees in the future. Some examples of a soft benefit include the project leading to workplace flexibility, performance rewards or improved employee morale.
Although there is a difference between hard and soft benefits, it is still advantageous to include both when deciding whether to go ahead with a specific project. Many companies put both hard and soft benefits together to help finalise their plans and summarise both the financial and non-financial benefits of the project - Shark Value Management Platform enables you to have these conversations with your customer and also allows you to include both financial and non-financial benefits in the business case. It is usually best (and slightly easier) to focus on the hard benefits to begin with as this does affect the financial state of the company and the customer will either have the data for the business case or will have input to any suggestions or data estimates, followed by weighing this up with the potential soft benefits the project may have. This is particularly important when companies believe that the quality of the experience is as important as the financial gain.
Get in touch with the team at Shark today to find out how our services can help you with hard and soft benefits.