HFI Animate: The ROI of User Experience with Dr. Susan Weinschenk

Uploaded by HFIvideo on 27.01.2011

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>> User experiences in the science and art of designing a product like a website
or a software application so that it's easy to use.
So that it fits the expectation that the user has for it, and so that it meets business goals.
There's a whole methodology around designing a user experience,
and sometimes people ask me is it worth it to do all that work to design a user experience?
So let's talk about the return on investment, or ROI, of doing user experience work.
I triple E is a professional organization that puts out reports and does research
for programmers, developers, and engineers,
and they put out an article called "Why Software Fails".
Here's some interesting data from that article.
They estimate that the amount of money that is spent worldwide
in information technology is estimated at one trillion dollars a year.
The percent of projects that are abandoned because they are hopelessly inadequate is
up to 15 percent of all projects.
The percent of revenue that goes to the IT group is five percent of a company's total revenue
and up to ten percent if it's a financial or telecommunications company.
The amount of time that programmers spend on rework
that is actually avoidable is 50 percent of their time.
The costs of fixing an error after development is 100 times
that of fixing an error before development of the project is completed.
Of the top 12 reasons that projects fail, three of the top 12 are directly related
to what we would call user experience or user-centered design work,
and those three are badly defined requirements; poor communication among customers, developers,
and users; and stakeholder politics.
So the kind of work that, that user experience professional, give stakeholder interviews,
the use of research, the use of testing, these are center design.
These are all things that can fix at least three of those 12 reasons why software fails.
You actually can calculate the savings or additional revenue or benefit that you get
from approving your user experience in the product.
So let's look at some examples to make this more concrete.
First example I want to talk about is let's say that you are a micro lending company.
So these are often non-profit organizations that look for donations from people,
and then they take that money, and they lend it out in very small loans to people
around the world who need the money to run a small or home business
in order to better their situation.
So you have a website, and people donate money at your website, but the searching
and donating part of the interface that the website is confusing and hard to use,
and you have estimated that 50 customers a day are actually abandoning before donating
because of the poor user experience.
So let's do some calculations.
Each customer, let's say, donates an average of $50 over the course of a year.
So you are losing $2,500 a day or $912,500 a year.
If you spend $50,000 to fix the user experience issues and another $50,000, let's say,
to rewrite the, the code based on those user experience improvements,
we can estimate you're going to spend $100,000 improving the user experience.
It will take you 40 days or a little over a month then to realize the investment
because you've got $912,500 a year that you could improve.
So in a little over a month, you've recouped your investment.
There are many measurements that would be meaningful, for example, conversion rate.
That's the number or the percent increase of visitors to a website who either buy or donate
or it doesn't have to have to do with money.
It might be they take the action you want them to take like register at the website.
Or you might be interested in a decrease in the number of percent of drop off or abandoned.
The decrease in the number of calls to the help desk.
Or maybe by making the user experience improvement you can reduce the amount
of training that's required.
For instance, if it's an internal software application.
Maybe you want to increase the usage of the software application.
Maybe you're looking to save user time, or maybe you want to save development time.
Perhaps errors are what's, what you are trying to reduce.
Whatever measure you choose, calculating the return on investment is a way
to show the value of doing user experience work.
Here's one of my favorite quotes from Albert Einstein.
I think he said it best.
"Any intelligent fool can make things bigger and more complex.
It takes a touch of genius and a lot of courage to move in the opposite direction."
If you'd like your own copy of this drawing to download and print,
go to human factors dot com slash roi poster dot asp.
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