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Thinking Out of the Box

UX Design – Return on Invest (ROI)

Miriam Julius
Miriam Julius
August 13th, 2019

User Experience means that users experience a product. The most innovative controls and the most fluid animations are useless if the product is not sold and used. As a UX service provider, we have seen many times how good UX not only makes the product a success for users, but also how UX helps a product get to market in the first place. The Return on Invest (ROI) of UX-Design shows the profit or turnover achieved as a result of an investment in UX Design. Where the additional profit / revenue comes from, which other aspects contribute to the ROI and further questions about Return on Invest by UX-Design are answered in this article.

UX Design Return on Invest

Why does my project need UX Design? #Develop added values

As a product owner, you have to meet many requirements for your product. Too often this leads to describing an existing feature as a requirement and tipping it into the sprint as a user story. Often, the question of whether one is actually developing the right thing is left unanswered. An example: In a production hall, a shift supervisor has to document defective parts of his line. With the solution-oriented user story “The user wants to fill out and send a defect form”, the development team builds a form that the shift supervisor can then send.

The user story specifies what is to be developed. But if the user story already defines an uninspired solution instead of addressing the user’s problems and needs, there is no room for UX improvements. This is fatal, because the stories swallow up development time, but still don’t transport any added value for the user. POs don’t get the advantages of a new development, which they actually want, despite a high investment. The saying “Develop the right thing instead of just developing the right thing” is often used here.

If you take a step back before the start of development and take the user’s perspective, it quickly becomes clear that the shift supervisor does not want to fill out a form. Actually nobody ever wants to fill out a form. They wants to pass the deficiency on as quickly as possible to a person who should take care of it. If you don’t anticipate a solution, but formulate the user story in the problem space, it reads: “If the shift supervisor discovers a defective part, he must document the defect so that colleagues can take care of the problem.” No solution is given here, the form is not mentioned. The team can take the user’s perspective and solve the problem from its context instead of relying on existing features that may be technologically outdated. On this basis, a solution was developed in the real project example in which the shift supervisor at the machine pulls out his smartphone and takes a photo of the defective part, adds a keyword and sends it off. The workflow is preferable to filling out a form, because the user saves the paperwork, does not have to carry a laptop with him and the deficiency is much better described on the basis of the photo, so that misunderstandings occur much less frequently with the recipient. More about this later.

This rethinking at the very beginning of the development process focuses the capacity of the development team on solutions that really benefit the user. No time is wasted rebuilding old solutions that consume development time but do not add value to the product. Certain functions may not be used in the way they were originally intended. This can also significantly reduce the development effort. We’re talking about a user-centered approach.

Can’t everyone think user-centered? Why should I involve people who can’t program in my software development team? #Vanguard

The user-centric approach must be shared by the whole team. Only if everyone is involved can an improvement in the user experience be achieved in the end product. Software engineers also need this view. However, they rarely represent this point of view because they focus predominantly on technical challenges. The PO or Project Manager primarily mediates between the development team and surrounding departments and requirements from the company. So if there are no UX designers in the team, there is no one to represent the user’s needs and create user-centric solutions from a user-centric requirement. Only the combination of all perspectives leads to a solution from which POs, the budget and the market success of the product profit.

In addition, the engineering team is greatly relieved if a UX designer already clarifies all questions, collects information and specifies how exactly the new feature works and fits into the rest of the software. Not only does this make the initial implementation easier for the team, it also reduces the likelihood that they will have to rethink halfway through the process and start anew.

What is the cost-benefit ratio of UX Design? #Save development costs

Prototypes and mockups, which can be discussed with users or reviewed with stakeholders, reveal many bugs that would otherwise only be discovered during implementation or even after release. If the bugs are only discovered after the product has been released, there are various risks involved:

  • The risk of alienating the first users and making a less successful first release than expected.
  • The risk of educating users not to accept updates because of bugs after an update.
  • The risk that users will stop using the product (worst case).

At the same time it should be considered that concepts and screen mockups can be implemented much faster and thus cheaper than code or an application that has already been released. As a rule of thumb between development, implementation and running operations, a ratio of 1:6:10 can be applied.

Software engineers are also often more expensive than designers. According to Gehalt.de, software engineers in Germany earn an average of €4,093 (€3,357 to €4,830), while UX designers earn an average of €3,327 (€2,852 to €3,803). This also affects later changes after release and leads to significantly higher costs. Let’s take a concrete numerical example:

While changes in the prototype stage cost about three hours of development work (UX Designer: 1 hour = 115 €, Developer: 2 hours = 254 €), a complete sprint may even be necessary for later changes during operation (UX Designer: 2 days = 1,836 €, Developer: 7 days = 7,126 €). So in direct comparison 369 € in prototype stage vs. 8.962 € in live use.

Prototyp Live
Costs UX Designer 115 € 1.836 €
Costs Developer 254 € 7.126 €
total cost 369 € 8.962 €

 

Of course, these costs have to be balanced against the costs that the UX team generates in principle. Studies have shown that in most development teams about 1 UX Designer comes on 6 to 8 software engineers. If you compare this with the assumed salary from above (2.852€ to 3.803€) there is still a cost saving of 5.266€ for the sprint.  (Quelle: https://techcrunch.com/2017/05/31/here-are-some-reasons-behind-techs-design-shortage/?guccounter=1)

What Return on Invest (ROI) does UX Design have and what does it bring to my market success? #Sales Arguments

UX is not only worthwhile for the development budget. The goal of UX Design is to improve the user experience, so of course it unfolds its greatest potential with the customer who uses the product. With every software project you should be aware of who you want to sell the product to and which problems the buyers currently have that you want to solve with the new product or with the new development of the product. If you name concrete problems, e.g. marketing or a sales person can pick them up directly and tell potential customers how the new software alleviates their personal pain.

Let’s pick up the example from earlier. It was about the shift supervisor discovering a defect in the machine hall and having to pass it on to a colleague so that he can take care of it. The new solution was for the shift supervisor to take a picture of, for example, a defective part on his production line instead of having to fill out a deficiency form, for which he also had to carry or fetch his laptop.

Let’s compare what this change means for the company that uses the software.

Workflow before revision

In the previous solution, the workflow of our shift supervisor was as follows (Fig. 1)

  1. The shift supervisor (let’s call him Sven) is called to a machine on his line because the operator has identified a problem. Sven sees that the barcode that should be engraved on a part is not readable. (Duration: 2 min)
  2. Sven goes back to the office and gets his laptop. In the office he is missing the data for the order and so on, he goes back to the machine with the laptop (duration: 4 min).
  3. Sven opens the software and opens the defect form, Sven lets the machine operator dictate the order number and the ID of the produced part (2 min).
  4. Sven asks which machine it is, the machine operator says it is line 6 and machine 4. Sven enters this. (0,5 min)
  5. Sven describes the problem with the barcode in a few words (0,5 min)
  6. Sven must select a category that determines to whom the defect should be forwarded, for this purpose he must transfer a number from an Excel list that encodes the category. (1 min)
  7. Then he saves the form and sends it off.

This results in a total duration of 10 minutes to record the defect.

 

The new workflow after revision by the UX team (Fig. 2):

  1. Sven receives a notification on his mobile phone that there is a problem on line 6 machine 4. Sven goes there and the machine operator shows him that the barcode, which should be engraved on a part, cannot be read. (Duration: 2 min)
  2. Sven clicks in his app (already open because of the notification) on the marked machine to record the defect.
  3. the camera opens and Sven takes a picture of the part. With his finger it marks on the photo the interesting area where you can see the defect. (0,5 min)
  4. Then the app prompts him to scan the job code. Sven picks up the job slip, which contains all the job data, and scans the job code. (0.5 min)
  5. Sven must select a category that determines to whom the defect should be forwarded. To do this, he selects one of the categories suggested by the app. (0.5 min)
  6. Then Sven transmits the defect.

A total duration of 3.5 minutes to detect the defect. This means a reduction in effort of 6.5 minutes per recorded defect. Assuming such a deficiency occurs 7 times a day, this is about 45 minutes a day. Calculated on a monthly basis (20 working days), this would be 15 hours, which the shift leader can invest in other tasks.

Of course, this also benefits the company. If we assume that there are 10 such shift managers in the company, we would be at 150 hours a month. Assuming a net hourly rate of 25 euros, this would be 3,750 euros per month or 45,000 euros per year, which would be saved by recording the deficiencies. And here we have only considered the time difference. In addition, the error potential has also been greatly reduced in the revised workflow, so that the defects are not only recorded more quickly, but the recipient can also react more frequently and directly.

In the first workflow, for example, it is relatively probable that the user will leave one of the required form fields empty so that the form cannot be sent, and will then have to rework it. Or that the description of the deficiency is not understood by the recipient, so that he has to ask what costs more time again. All these sources of error are virtually eliminated in the app, because the user is guided more through the input, so that he cannot forget anything. The description is omitted in favor of the photo.

The graphic shows that in the new workflow an average of 91% of users complete the form sensibly, while in the old workflow it only works for 34% of users. The net result is a reduction of 65%. If this is taken into consideration, the time savings of 45,000 euros per year would have to be corrected upwards.

This does not only have financial effects. The main goal of UX Design is to make users feel better. Reducing errors and saving time takes many frustrating moments away from the user. Even if this cannot be traced back directly, a relief like this leads to less stress, higher motivation and, in the long run, fewer sick days.

One could look at other examples, such as supporting first-time users in learning the software or designing rare cases and errors in such a way that the training and support effort for the customer is reduced. Mozilla, for example, reports that by improving UX on its support website, the number of telephone support requests has been reduced by 70%. (Source: https://rapidusertests.com/blog/testing-tipps/roi-usability-zeit-und-geld-sparen/)

What added value does UX Design have for the user? Isn’t it enough if the surface looks more modern?

Measures such as reducing support requests cannot be achieved with a more modern and beautiful interface. There are many goals that can be achieved by improving the user interface. You can give the product recognition value, you can change its tonality, e.g. an interface that looked old-fashioned and conservative can become trendy. You can attract attention or desire. These are needs of the brand, which plays an important role in the user experience, because users can identify with it or build a relationship to the product. But if they can’t cope with an attractive product, are annoyed by it or are better able to solve their problems with another product, the attractiveness alone doesn’t hold them. What UX Design, which addresses user needs, can achieve is sustainability in the relationship to the product. If a user suddenly feels more competent with the product because his tasks are easier, he loses less time, he needs less help or he can achieve something that others (with other products) cannot, then he will want to continue using the product. The ideal is of course the combination of attractiveness and competence experience.

How can the Return on Invest (ROI) of UX Design be proven? #Convince the management board

Let’s talk numbers. We’ve heard above about cost savings in development and increased productivity through better user guidance and fewer errors. (Remember: 1st changes before implementation in UX design cost 24 times less in our calculation example than changes in live operation 2. Only on the basis of a single user story in our example above, the customer saves 45,000 Euros per year in his production through better user guidance).

Anyone who uses UX is also in good company. Among the 10 brands with the strongest growth worldwide, 5 grow exclusively through software products and have increased the number of employed designers by 65% in the last 12 months. (Source https://www.slideshare.net/johnmaeda/design-in-tech-report-2017 In addition, there is a study that shows that brands that focus on simplicity and a simple user experience perform much better than other brands in an international comparison. Not surprisingly, we all know and use the top 10 internationally most easily rated brands. The study has tracked the growth of these brands on the stock market since 2009 and found that the 10 “simplest” rated brands perform 679% better on the stock market than the average of all other brands. In 2018, the top 10 included Netflix, Aldi, Google and so on. Spotify is in eighth place. You can find the whole study here. In addition, 55% of all consumers are willing to pay more for a simplified user experience and 64% would recommend a brand based on an experience of simplification.

What connects companies like Netflix, Google, Spotify or IKEA? The use of their products is an experience that is tailored to the user. There are people who go as a day trip with the whole family to Ikea with the highlight after shopping to eat a hot dog. User centricity and user experience have made these companies great.

Who is not yet big, but wants to become one, depends on good evaluations by e.g. social media. Today’s products are publicly tested and evaluated, sometimes even before they come onto the market. Also the handling as well as the user centering are aspects, which are examined and discussed. These evaluations in the social networks or in the AppStore lead to an increase or decrease of the sales figures. A well thought-out and consistent UX design inspires the testers and leads not only to increasing sales figures, but also to more brand confidence and a positive image.

What do I get for the price and what have my UX design actions done? A conclusion #Return on Invest

The use of UX Design frees up capacities in many other places that can be used elsewhere. The own team operates more efficiently, is less frustrated and produces results with a higher added value.

Employees get through their workflows better, generate fewer errors, are faster and therefore more satisfied. This has a positive effect on the fluctuation rate, sick leave and thus the economic situation of the company. In the concrete case from above, 45,000 euros can be saved per year and the susceptibility to errors reduced by 65%.

Also for small and young companies or new products the appearance in Social Media and the evaluation in the stores is important, in order to put down a successful release. In general, users are better convinced by the simplification of their tasks than by overloaded products with many functions. In hard figures, 55% of all consumers are willing to pay more for a simplified user experience and 64% would recommend a brand based on an experience of simplification.

 

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