The Business Value of User Experience Research & User-Centered Design

Investing in user experience (UX) by designing software through a user-centered design framework serves three primary functions:

  1. Increases the top and bottom lines of companies
  2. Ensures products are launched on time, on budget, and stay within the allocated resources  
  3. Allows teams to make superior products, tailored for specific user groups, to support specific tasks

Focusing on UX is not about engaging in the latest fad. For serious professionals, UX is about increasing a company’s profitability. The authors of Cost-Justifying Usability make the monetary value of user-centered design clear. This post is inspired by Cost-Justifying Usability and it articulates the disasters and successes due to the absence or presence of UCD methods in a digital product development lifecycle. While some of the references are dated, the information still holds true today. Information labeled as “Insight” is a conclusion from the book while information labeled as “Root Cause” is my acquired knowledge from multiple projects.  

Reasons to Focus on User Experience through a UCD Framework:

1. Projects will be cheaper

  • User-centered design avoids costly changes at late stages in the lifecycle that are really expensive.
    • Cause: Changes to project requirements increase by a factor of 10 at each stage in the lifecycle. Correcting a problem at the development stage is 10x more expensive than fixing the same problem at the design stage. Also, it is 100x more expensive than fixing after deployment than in the development stage. Clearly, this shows the value of early iteration, prototyping and usability testing BEFORE development.

Image1-UserResearch

2. Development will be cheaper

  • UCD reduces overall development costs
    • Insight: “Approximately 63% of large software projects are over budget and the top four reasons rated as having the highest responsibility were related to usability engineering” (Nielsen, 1993).
    • Cause: Projects coming in over budget are the result of several avoidable reasons:
      • Timelines slipping because of disagreement on what to make
        • Can be avoided by extracting requirements from personas, journey maps, task flows, usability goal-setting  
      • Getting deep into design and then realizing a necessary module or feature is missing or needs to be changed to the app map or navigation
        • Can be avoided by agreeing on feature sets and app maps prior to the design stage   
      • A version was released and was not received well by a user group, requiring very expensive revisions.
        • Can be avoided through usability testing
  • User experience research makes development faster

    • Insight: “Speeding up development is a key goal for integrating usability effectively into product development; one quarter delay in bringing a product to market may result in the loss of 50% of the product’s profit” (Conklin, 1991).
    • Cause: Getting to market first with the right product has advantages. This is more likely to happen with a UCD framework. Once the problem is well understood, the solution and design requirements are concrete and development teams can be heads down and work purposefully towards a clear goal with very little likelihood that there will be changes to requirements. Avoiding these changes saves time. Additionally, teams that follow the UCD process are more likely to get to market first with the right product. That is, even if teams without UCD structure manage to get to market first, their likelihood of needing to pull out due to inappropriate design is high.
  • Makes maintenance post-deployment cheaper

    • Insight: “It has been found that 80% of software lifecycle costs occur during the maintenance phase and were associated with ‘unmet or unforeseen’ user requirements and other usability problems” (Nielsen, 1993).
    • Cause: This relates to those products that quickly get to market with a sub-par product and then quickly iterate because they discover what they should have made the first time. This type of iteration is expensive, eats through profit, and extends the time it takes to get to market with the right product. Iterating with code is inherently more expensive than iterating through rapid prototyping. If you’re going to fail, fail cheap and fast so the designs move into development only when teams know the end result will be successful.  
  • Saves redesign costs

    • Insight: “Sun Microsystems has shown how spending about $20,000 could yield a savings of $152 million. Each and every dollar invested could return $7,500 in savings” (Rhodes, 2000).
    • Cause: This is the result of avoiding all the waste mentioned above. The bigger the scale, the bigger the savings. When teams do things right, the expense in waste is low and revenue is high from satisfied customers. Furthermore, when you spend money on a redesign because V1 wasn’t successful, you are destroying your consumer base. Fred Reichheld describes how a consumer deals with bad experiences with products and companies by telling their friends, which results in losing each dissatisfied customer’s social network. Such persons are called detractors and when a company has too many detractors, they do much worse financially than companies that have more promoters–which are customers who speak positively about companies after having a great experience with their product or service. In sum, teams iterate with code because they want to “get to market and see what happens”. If they are wrong, it costs a lot more money to fix and produces an army of detractors. Additionally, the reason teams need to redesign at costly stages is because they do usability testing too late in the lifecycle. See the image below for a visual example.

Image2-UserResearch

3. Increases the Top Line

  • Increase transaction / purchase

    • Insight: “You can increase sales on your site as much as 225% by providing sufficient product information to your customers at the right time” (User Interface Engineering, 2001).
    • Cause: This phenomenon is related to the discoverability of information. If users can’t find what they are looking for or the things they need, how can they buy the product?
  • Increase product sales

    • Insight: “It is common for usability efforts to result in a hundred percent or more increase in traffic or sales” (Nielsen, 199a).
    • Cause: Customers buy more from companies they like–and they like companies that make things easy. If it is not easy to do business with your company, you are losing customers.
  • Increase traffic, size of audience

    • Insight: “In the month after the February 1999 re-launch, the traffic to the IBM online store increased 120%, and sales went up 400%” (Battey, 1999). “The change increased the traffic [at HomePortfolio.com] up 129% the week we put it up” (Interaction Design, Inc., 2001).
    • Cause: Again, customers want things that are easy: “When respondents were asked to list the five most important reasons to shop on the web, 83% stated “Easy to place an order” as the top reason” (Nielsen, 1999). Furthermore, especially with e-commerce sites, closing a sale is more likely when the sales cycle is easy every step of the way: “The importance of having a competitive edge in usability may be even more pronounced for e-commerce sites, which commonly drive away nearly half of repeat business by making it difficult for visitors to find the information they need.” (Manning, 1999).
  • Retain customers

    • Insight: “More than 83% of Internet Users are likely to leave a Web site if they feel they have to make too many clicks to find what they’re looking for” (Arthur Andersen, 2001).
    • Cause: If a company provides great experiences, their customers are less likely to go to a competitor. They will also be desensitized to price fluctuation, meaning, if prices increase, your customers will stay–as long as they are satisfied.

4. Improves Effectiveness of Use

  • Increase success rate, reduce user error

    • Insight: “In Jared Spool’s study of 15 large commercial sites, users could only find information 42% of the time even though they were taken to the correct home page before they were given the test tasks” (Nielsen, 1998b).
    • Cause: Usability testing prior to development could have identified this problem, and iterations could have been made to avoid deploying a sub-par product.  
  • Increase efficiency productivity (reduce time to complete task)

    • Insight: “Inadequate use of usability engineering methods in software development projects have been estimated to cost the US economy about $30 billion per year in lost productivity” (Landauer, 1995).
    • Cause: UCD and UX are about more than just increasing usability. It is also about improving user performance which means increasing success rates, and decreasing errors, reducing time on task, and increasing the overall economy of production. That means features and requirements need to be mapped to real needs that have a bona fide business value from actual thoughts. The focus of UCD efforts in an enterprise is improving profit margins by increasing worker productivity, eliminating rework, reducing training time, and overall increasing the economy of production. Through design and human performance evaluation (usability testing), teams can design whatever user experience they are looking for.
  • Increase user satisfaction

    • Insight: “In a Gartner group study, usability methods raised the user satisfaction rating for a system by 40%; when systems match user needs, satisfaction often improves dramatically” (Harrison et al. 1994, p. 215).
    • Cause: Again, this is the result of the UCD process. During usability testing, it is possible to measure subjective metrics so that teams not only know how well users perform, they can also know how satisfied users are and make estimations about product success post-launch.
  • Increase job satisfaction / decrease job turnover

    • Insight: “Surveys showed that video display terminal workers had twice as many complaints of neck and shoulder discomfort, eye strain was reported three times as often, and there were higher rates of absenteeism, less job satisfaction, and increased (30%) turnover” (Schneider, 1985).
    • Cause: This is all a result of not focusing on user experience research with a UCD process. I’ve worked on a project where our extensive analysis showed that the complexity of software was the root cause of employee turnover and job satisfaction.
  • Increase ease of use

    • Insight: “Incorporating ease of use into your products actually saves money. [Furthermore], reports have shown it is far more economical to consider user needs in the early stages of design than it is to solve them later” (IBM, 2001).
    • Cause: Systems and operations that are easier to use are faster. When things are more complicated, it increases stress and slows down processes and introduces error and rework, all of which costs companies money.
  • Increase ease of learning

    • Insight: “A study by computer + software news (1986) found that users rated ease of use second at 6.8 out of 10, while ease of learning was rated fourth at 6.4 on a scale of important purchase factors” (Harrison et al, 1994, p. 211).
    • Cause: Who wants to buy something that is very complicated to use that takes a long time to learn? As a consumer, who wants to buy something and then buy books on how to use and carve out a certain amount of time a week to learning?
  • Decrease support costs

    • Insight: “In the next release, support calls ‘dropped dramatically’; Microsoft recognized ‘significant cost savings’” (Ehrlich and Rohn, 1994, p. 96). “Over 50,000 users called support for assistance, at a cost to the company of nearly $500,000 a month. To correct the situation, the manufacturer…ended up spending $900,000 on the problem. No user testing…was conducted before its release “ (Mauro, 1994, P. 129).
    • Cause: When things are easy to learn and easy to use, you don’t have to call other people for assistance. Not only will this make you feel good, but it will save you money, too. Simple.
  • Reduce training / documentation cost

    • Insight: “A study by Computer + Software News (1986) found that Information Systems Managers rated ease of training seventh (out of 10) on a scale of important purchase factors” (Harrison et al., 1994, p. 211).
    • Cause: As a result of the UCD process, it is possible to intentionally reduce training time of new hires. We’ve done projects where onboarding was reduced by 50%. This is because we learned how new employees thought about, talked about and did their work. We made a system that mapped so well to how existing processes were thought about that the new system made complete sense right out of the box for the existing user group. This reduces the cost of implementation by not having to extensively train employees after purchasing an existing system. The only additional expense would be updating existing manuals to match the re-designed system to onboard new hires.

5. Avoids Litigation

  • Litigation deterrence and safety

    • Insight: “Usability is a principal factor for determining manufacturers’ liability based on an expert’s hard evidence on how a design should have used usability” (Mauro, 1994, p. 127).
    • Cause: When a designed system is user-friendly and made to be error-retardant, you’ll have less on-the-job accidents, meaning you’ll spend less time in court arguing “whose fault it was”.


The Future of Enterprise Software is Strategic UX

hbspt.cta.load(233157, ’91cc0deb-c87b-44c1-b73b-a691246244dc’);