Input methods are focused on the resources consumed to achieve a goal, while output methods are focused on the results delivered. The best way to use these methods depends on the specific domain, whether it's software development, manufacturing, or financial accounting.
Core distinctions between input and output methods
| Aspect | Input Method | Output Method |
|---|---|---|
| Focus | Internal efforts and resources used. | External, tangible results delivered to the customer. |
| Measurement basis | Cost incurred, labor hours spent, machine hours, or materials used. | Physical units produced, milestones achieved, or value delivered. |
| Perspective | Emphasizes the "how" and the process. | Emphasizes the "what" and the outcome. |
| Dependency | Measures progress based on inputs, which may not always correlate directly with the value transferred to the customer due to inefficiencies. | Measures progress based on deliverables, which provides a more direct link to the value received by the customer. |
| Risk of inaccuracy | Can be less reliable if there are cost overruns, waste, or inefficiencies, as it could overstate progress. | Generally more reliable as it measures concrete, observable results. |
Application of methods across different domains
1. Accounting and revenue recognition
Under accounting standards like ASC 606 and IFRS 15, companies that satisfy a performance obligation over time must choose between an input or output method to recognize revenue.
- Input method: A construction company may recognize revenue based on the proportion of total project costs incurred. For example, if a project is 40% complete in terms of costs expended, 40% of the total revenue is recognized.
- Output method: A manufacturing company may recognize revenue based on the number of units delivered to the customer or specific contractual milestones achieved. For example, a homebuilder might recognize revenue after completing each phase of construction (e.g., framing, dry-walling).
2. Computer science and user interaction
In computing, the concepts of input and output methods define how humans interact with a system.
- Input method: Refers to the software or hardware that allows users to input data. Examples include:
- Input Method Editors (IMEs): Used for typing complex characters in languages like Chinese, Japanese, or Korean on a standard keyboard.
- Physical input devices: Keyboards, mice, and touchscreens.
- Output method: Refers to how the system communicates results or information back to the user. Examples include:
- Standard output (stdout): The console or terminal where a program displays text results.
- Visual displays: Text on a screen, graphical user interfaces (GUIs), or visual effects.
- Audio and haptic feedback: Sounds, speakers, and vibrations.
3. Economics and production
In economics, the input-output model describes the flow of goods and services within an economy.
- Input method: Refers to the resources, such as raw materials, labor, capital, and energy, that are used in the production process.
- Output method: Refers to the final goods and services that are produced as a result of combining the inputs.
4. Project management and OKRs
Objective and Key Results (OKRs) utilize input and output methods to set and measure progress toward goals.
- Input method: Defines the specific tasks or activities required to achieve an objective. Examples include: "Make 50 sales calls" or "Write 10 blog posts".
- Output method: Defines the quantifiable, measurable results that come from those inputs. Examples include: "Generate $10,000 in sales" or "Increase website traffic by 15%".
Choosing the right method
The most appropriate method depends on the context and the nature of the project or contract.
- Choose an output method when:
- The results are easily measured, observed, and verifiable.
- You want to directly link progress to the value delivered to the customer.
- There is a clear link between specific actions and tangible outcomes.
- Choose an input method when:
- The final output is difficult to observe or measure as progress occurs.
- The work primarily involves services where effort (e.g., labor hours) is the most reasonable measure of performance.
- The relationship between inputs and outputs is predictable and efficient.
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