Business software and applications: UX and your bottom line
Research confirms what those of us working in the field have long understood: good UX is good for business. But how do you convince the decision-makers in your organisation that user experience is worth the investment?
There are many ways that the business case for user-centred design makes sense. If you’re looking at external user audiences (customers), benefits include improved higher conversion rates, improved customer experience and increased brand value. With internal users (staff), gains include better adoption rates, improved data quality and increased productivity.
Some of these factors are easy to measure, and some are trickier. Without hard numbers it can be difficult to sell UX as a business strategy internally, and to justify the initial outlay of time and money.
Below we’ll look at some of the ways UX delivers tangible ROI. But regardless of how concrete or hypothetical your projected numbers are, another way to look at it is the risk you’re eliminating from your project.
A study by the Institute of Electrical and Electronic Engineers (IEEE) called ‘Why Software Fails’ found that 15% of IT projects are abandoned before completion because they turn out to be inadequate for stakeholders’ needs.
Getting your UX design right can significantly reduce your risks of:
- Building something that doesn’t meet your needs
- Building something people won’t use
- Serious cost overruns as you try and fix or fine-tune after the fact
Costly ongoing fixes and maintenance work
- Designing something that will be quickly obsolete, or inflexible to the changing needs of your organisation
All these risks can be eliminated or mitigated through quality user research, data analysis, task and workflow analysis and usability testing and refinement — and that alone makes investment in UX money well spent.
Ways to calculate ROI on user experience
1. Reduced development and rework costs
By some estimates, 80% of unforeseen fixes to software are to the user interface. Involving users to get your requirements right up front can dramatically reduce this rate.
The IEEE research showed that 50% of programmers’ time is spent on avoidable rework. The same study estimated that consulting users at the design stage can help improve decision-making and prioritise development tasks by 33–50%, making the development process far more efficient.
It’s about recapturing the waste that these inefficient and ineffective tools create. It is hard to calculate the amount of financial and human capital lost through the use of these tools.
– Margaret Gould Stewart, Vice-President of Product Design at Facebook
The cost of fixing errors after development is many times more than if errors are caught and fixed — or new requirements added — during the development process. That’s because when you add or change a function you need to pull apart and rebuilt structural elements of the system. Think of it as a wall: it’s far cheaper to build it in the right place the first time than to pull it down and move it later.
Saving (£) = (number of changes) x (avg. hrs/change) x (cost of developer) x 4 if late
e.g. 20 changes x 8 hrs each x £50/hour = £8,000 if fixed early, or £32,000 if changed late
The factor of four for late fixes in this example is a conservative one. The IEEE study put the cost of changes post-development at 100 times the cost of making fixes before the project is complete — when it’s often too late to do any more than patch the problem anyway.
2. Increased user adoption
Projects fail without user buy-in. A Forrester Research report estimated that 70% of applications failed due to lack of user acceptance found that 72% of business leaders cited effective user adoption as the most important factor for the success of a project.
Well-designed tools and checking protocols can significantly reduce the risk of user input errors.
Designing tools that are a pleasure to use can hugely affect the traction of new software in large organisations. When users feel a tool genuinely helps them achieve tasks or save time, they’re much more likely to use it and recommend it to others. A clear metric here is user numbers before and after.
3. Increased productivity
User-centred design streamlines your systems. ‘Smart’ tools designed around your users’ and company’s needs help staff perform everyday tasks quicker, and eliminate repetitive, mundane or error-prone tasks, freeing up time to do new tasks in the same timeframe.
A useful cost-saving metric is to analyse how long a given task takes, and how much time will be saved if you can cut that in half (for example) every time:
Saving (£) = (time saved) x (employee cost) x (employees)
e.g. 2 hours/week x £15/hr x 200 employees = £6000/week
4. Better data capture and fewer user errors
People will always make mistakes. But uncaught input errors ultimately impact the running costs of a large organisation, from lost revenue to additional compliance workflows.
Well-designed tools and checking protocols can significantly reduce the risk of user input errors. By preventing mistakes at the input stage, the spiralling time and costs of later fixes and firefighting are avoided — along with the occasional catastropic event.
You don’t have to wait to make your ROI case. It is the RISK that you are avoiding by doing the UX work. Decisions based on estimates are better than decisions made without any calculations at all.”
– Susan Weinschenk, Chief of UX Strategy at Human Factors International
The example below assumes each employee makes just a couple of errors per month, which take a few minutes to fix — once discovered. But look how quickly the costs compound. And what it doesn’t calculate is the snowball effect of the error being passed on in the meantime to other departments — marketing, perhaps, or technology or commercial or sales — where the problem continues to multiply by each additional area of the business.
Saving (£) = (number of errors) x (avg. fix time) x (employee cost) x (number of employees)
e.g. 2 errors/month x 0.83hrs x £16/hr x 500 employees = £1,328 per month
Improving data quality can deliver further cost benefits by saving on data hygiene processes and limiting the waste of resources like print and postage. Well-designed data capture processes can also offer added value such as improved capacity to segment and target your audience groups.
5. Decreased training and support costs
Training budgets are usually proportional to user interface complexity. Intuitive, easy-to-use software reduces the need for expensive or ‘tied-in’ training, as well as ongoing documentation and support costs. Other benefits include smaller training teams and less time out for your staff while in training.
Saving (£) = (number of training hours saved) x [(cost of trainer) + (cost of employee)]
e.g. 4 hours x 200 employees x (£30/hr + £15/hr) = £3600
Another key saving to calculate might be the reduction of calls to the support team or help desk. Work out what metrics are significant to you, and look at the numbers.
Better by design
UX design delivers many further benefits that can be harder to isolate and measure, but are revealed through interviews and other qualitative research methods. These include:
- Increased user satisfaction
- More attractive products
- Increased brand value
- Competitive edge over rivals
It’s no coincidence that some of the biggest brands in the world belong to companies who prioritise design both internally and externally.
Traditionally it’s been difficult to quantify the extent to which design contributes to the success of these companies. But in 2014 a stock market index developed by the Design Management Institute showed that design-led companies outperformed the Standard & Poor’s index by 228% over 10 years. It’s a clear signal to businesses everywhere that real success is by design, not by accident.
Cross post from 100 Shapes Blog
Making a strong business case for the ROI of UX
The ROI of User Experience
6-minute video from Human Factors International
UX as a business strategy
2015 UX trends round-up
The ROI of UX Research
Q&A with Chief of UX Strategy at Human Factors International
Calculating ROI on UX & usability projects
How user experience can positively impact costs
Why software fails
Benefits of user-centred design
Usability: A Business Case
Design-driven companies outperform Standard & Poor’s by 228%