May 2013

Volume 28 Number 05

UX By Design - Is UX Investment Worth It?

By Billy Hollis | May 2013

A few months ago, I wrote a column for Visual Studio Magazine on the need for teams to embrace more design thinking in their applications. The benefits of following basic design principles when creating or revising a line-of-business application are many, and the investment needed isn’t usually very high.

There are exceptions, of course. A program that is used by only three people twice a year for 10 minutes can’t benefit much from increased productivity. Investment in UX design for that program would likely offer far less return than designing a good user experience for a program that thousands of people use for hours every day.

But then there are exceptions to the exceptions. What if the task those three users are doing is highly complex and the results of user error are catastrophic? Investment in user experience would then be critical.

So how can a team determine the appropriate level of investment needed for UX design and development? Plenty of factors are involved. Some of them are intangible, so getting reliable return figures can be difficult. Others, though, can be assessed using some straightforward arithmetic.

Picking Cherries: Quantifying Productivity Improvements

Better user experience usually leads to productivity improvements and reduced training costs, and both of those factors are easy to calculate. You need only a few numbers to do the math, although one number in each case is an estimate.

For my clients, the biggest number is usually productivity savings. To calculate that, you need the following information:

  • The number of users
  • The average number of hours per day that a user operates the application
  • The loaded cost per user per year (salary plus benefits plus overhead such as computers and office space)
  • The estimated productivity savings of better user experience, expressed as a percentage

You should have discovered the first and second numbers while gathering requirements. Your human resources department should be able to give you a good approximation for the loaded cost per user. It varies by company and type of user, but for business applications, the loaded cost per user typically ranges from $60,000 to $150,000. It can go higher, though. If the users are doctors, for example, the loaded cost would likely be several hundred thousand dollars.

The fuzziest number in the calculation is the estimated productivity savings. When you first begin doing better UX design, you likely won’t have a clue how much your improved designs will affect productivity.

Your fallback is typical figures from projects in which the actual productivity improvement has been measured. Whenever possible, measure the effects of your designs once the application goes into production. Productivity usually has a clear metric, such as orders handled per hour or revenue processed per day. It’s a good idea for you to decide at the outset what metrics you’ll use to measure your application’s productivity so that you can see after the fact how well your estimate held up.

In the field, I’ve seen UX redesigns increase productivity anywhere from about 10 percent to as high as 40 percent. However, the higher numbers usually involved some business process re-engineering along with the UX redesign.

When you begin, you might struggle to reach 10 percent. However, most existing business systems have such low-quality user experience that it’s not hard to improve them significantly. It will be rare that you can’t wring at least a 5 percent productivity improvement out of a UX redesign. For many business applications, all that’s required for that much improvement is to create a better search experience and better visualization of the returned results.

I recommend that you consider 5 percent the floor and then increase that percentage if the old system is known to be particularly weak at productivity. For poor-quality existing user experience, 10 percent improvement shouldn’t be out of reach.

If U is the number of users, H is the number of hours of usage per day, L is the loaded cost and P is the percentage of improvement in productivity, the formula for savings is simple:

(H / 8) * U * L * (P / 100)

As an example, assume you have a thousand users who use the system six hours a day. The loaded cost per user is $80,000, and you’re anticipating a conservative 5 percent productivity improvement. The savings would then be:

(6 / 8) * 1000 * 80000 * .05

That comes out to $3 million in savings – per year. That kind of savings would clearly justify a lot of investment in better user experience.

Some of my clients have had many more users and achieved even higher productivity increases. Some have saved over $50 million per year.

Figuring out the savings that result from reduced training needs follows a similar, easy formula, but the numbers you need to plug in are a bit harder to come by. You need to know this information:

  • The number of new users per year (U)
  • The same annual loaded cost per user (L)
  • The number of days of training saved (T)
  • Optionally, an estimate for savings from better productivity during the initial weeks of using the system (P)

The formula for savings is then:

 (U * L) * (T / 250) + (U * P)

Well-designed user experience has a dramatic effect on training times. Cutting training times in half after a UX redesign isn’t uncommon, and in some cases, structured, formal training is completely eliminated. In fact, training-time reduction is one of the best indicators of the success of a UX design.

Even when the training savings per user is high, however, the aggregate amount might not be much if the turnover among the user population is low. Savings in user training tend to be much more important for jobs that have high turnover.

Don’t neglect that last number (P) if your existing system has a high ramp-up time. I’ve seen business systems that require two to three months of production work after formal training before a user is really proficient. A well-designed user experience can cut that time by half or more. If a user is twice as productive during the first two months, for example, you can add one month of loaded cost to the savings from training.

Qualitative Benefits from Improved UX

Providing a better user experience can bring about other changes that have a monetary impact, but they tend to be harder to measure and their applicability isn’t as universal. Here are some potential benefits you should consider:

  • Savings from reduced user error rates
  • Higher revenues from better user identification of revenue opportunities
  • Better customer satisfaction and retention
  • Higher retention of users

My team does a lot of work in healthcare, so reducing error rates is a major factor in UX savings for our clients. When a single error can cost what an employee makes in several years, savings from error reduction can add a significant amount of return on investment. Costs from errors vary by industry, company and application, however, and you’ll need to make some judgment calls about how to factor in such potential savings.

For applications with significant sales or ordering components, a better user experience can boost revenues. For example, you might pick up customers who had previously given up on ordering because the process took too long or who can now easily find related products to purchase.

These factors overlap with the general area of customer satisfaction. The companies I loathe are the ones who leave me hanging on the phone while their dilapidated applications take ridiculous amounts of time to find the information needed to resolve my problem. I look for any excuse to stop doing business with such companies.

If your application can quickly find the right information needed to resolve customer problems, your customer retention rate will likely improve. If you already have general evidence of customer dissatisfaction, investment in surveys or data mining your customer contact database might tell you enough to estimate how much a better system would improve retention. From that, you could make some educated guesses about monetary impact.

Speaking of retention, have you ever considered the long-term effects of a stressful, frustrating user experience on your employee user base? I think it’s obvious that people are more likely to stay in a job in which they don’t have to battle every day with a recalcitrant business application that makes them angry or frustrated several times an hour.

I think retaining highly qualified employees is becoming even more of a challenge in today’s business environment. The generation now entering the workforce has different expectations about technology. They grew up with iPods, smartphones and tablets. They won’t be content using antiquated or clunky business applications. They expect software to be relatively easy to figure out and use.

Consider this experiment: Put a new hire in front of your current business application. Will their experience with your application’s user experience make them eager to work with you and enhance their loyalty to your organization? Or will it erode their interest and commitment? In the world of UX design, emotional factors are important too.

A Caveat

If your team doesn’t know how to do effective UX design, you might invest a lot of money, time and effort in revamping your user experience but end up with something not much better than the existing system. Clumsy UX redesigns can do more harm than good. In future columns, I’ll be discussing ways developers and teams can avoid this pitfall.

Billy HollisBilly Hollis is a software designer and developer with a consulting practice in Nashville, Tennessee. He and his team focus on UX design, advanced UI development, rules-based architectures and healthcare systems. He teaches design classes for UX and technical classes on XAML and Windows 8. Look for him on the agenda at major conferences for Microsoft technologies, such as Visual Studio Live and TechEd, where he’s usually discussing how developers can get better at crafting user experiences.