ROI and UX by Tushar Deshmukh

Ok, now we underline the importance of UX but now let's talk about real stuff - Money. Ignorance of UX, rather excuse given by many people to do not follow UX Process is that they think it is TIME and MONEY waste.

Let me share you one example which I experienced. One of my Ex. Company, never took UX seriously. Every project we execute are based on wrong methods of requirement gathering, every time "Personal ego" and "I Know" attitude. So we never took client, end user seriously surprisingly the same treatment was given to in-house products. What are out comes? Project failures, unhappy clients, frustrated teams, extra work, repeated-errors, reworks, change in scope every time... list is going on and on... Company has 300 + clients but less than 2% are repetitive. No evaluation done on wasted time and cost.

So what we have achieved in this? 2 month project time line exceeds to 5 -6 Months, sometime year, where is the ROI here? Where is the per seat (work station) income? I know, you also seen such scenarios or maybe you are in to such mess right now.

HCI (Human Computer Interactions) Principles are well studied and well tested and are the best practice followed by many successful companies worldwide. User Experience, UX is the key. You should have to consider user in a center point of your universe. Is including user experience in project development worth the time and resources? If so, how can you determine and communicate back the value of following a user-centered design (UCD) approach to your organization? When talking about the benefit of UCD, you can discuss success measures in terms of measuring user performance and satisfaction as well as calculating some of your return on investment. And this is major issue observed in many companies, ROI is very important to startups or established companies and this is not a Rocket Science it is a just Common Sense.

While studying, exploring more on same, I found very good notes done by few scholars, please read below:

Digital Projects are an Investment According to the Institute of Electrical and Electronic Engineers (IEEE) 2005 research, roughly $1 trillion a year was spent on IT worldwide, with the U.S. government spending more than $60 billion on its roughly 1,200 civilian IT projects and an additional $16 billion on military IT. http://www.youtube.com/watch?v=O94kYyzqvTc In the Human Factors International (HFI) video, The ROI of User Experience, Dr. Susan Weinschenk notes that of those IT investments, up to 15% of IT projects are abandoned and at least 50% of a programmers' time during the project is spent doing rework that is avoidable. Following UCD best practices, helps to identify challenges upfront so that a solution can be found early.

Avoiding Common Mistakes By building a skilled team and following the best practices outlined on this site, you can avoid several of the top 12 reasons IEEE identified for why IT projects fail: Unrealistic or unarticulated project goals Inaccurate estimates of needed resources Badly defined system requirements Poor reporting of the project's status Un-managed risks Poor communication among customers, developers, and users Use of immature technology Inability to handle the project's complexity Sloppy development practices Poor project management Stakeholder politics Commercial pressures

HFI recommends following the "10%" rules. The rules of thumb state that 10% of your IT staff should be user experience (UX) professionals and 10% of your budget dedicated to UX. By putting a larger emphasis on UCD principles and practices, you can make iterative improvements and avoid costly large scale rework that doesn't fit your users or organizations goals. Understanding Your Return on Investment (ROI) of UX

At a minimum, success can be defined as the project not being abandoned and it finishing on time and on budget. However, you can go deeper by calculating the cost savings of doing UX upfront and also discussing success in terms of user performance and satisfaction measurements.

Calculating ROI Weinschenk, in her white paper Usability: A Business Case outlines three useful equations for calculating cost savings related to:

Errors (# of errors) x (avg. repair time) x (employee cost) x (# of employees) = cost savings Example: (2 errors/week) x (60 mins) x ($30/hour) x (100 employees) = $6,0000/week or $300,000/year

Cost of Development and Maintenance (# of changes) x (avg. hrs/change) x (cost of developer) x (4, if late) = cost savings Example: (20 changes) x (8 hrs each) x ($40/hour) = $6,400 if fixed early or $25,600 if changed late

Productivity (time saved) x (employee cost) x (# of employees) = cost savings Example: (1 hr/week) x ($30/hr) x (1000 employees) = $30,000/ week or $15,000,000/year

Conclusion: So what we take from here? I am not saying UX is the only means of ROI, but it is the one of the important factor you should take in to consideration. Even if you save 5% to 10% with proper UX, HCI methods then those are lots of money. Just go through again 12 reasons given by IEEE for project failure - avoid those.

References:

http://www.humanfactors.com/coolstuff/roi.asp

http://www.usability.gov/what-and-why/benefits-of-ucd.html

Written by Tushar Deshmukh. Founder: uxexpert.in | UX Advisor - PlatLabs || UX Consultant Headfitted


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