ROI (Return On Investment)

How much does ROI matter?

UIDesigner points to The Tao of ROI, a must-read article for UX types looking to communicate business value. The key take away for me, something I’ve had a gut feeling for, but never articulated, is that the value of an ROI exercise is in the process, not the result.

This underscores some of the lessons in Adaptive Path’s recent ROI report, where the process and discipline of measurement and accountability are what distinguish one organization from another, rather than simply projected outcomes.

7 myths of usability ROI

BayCHI presentation from Oracle's Daniel Rosenberg puts common ROI approaches through the wringer. The thing that stands out for me is that ROI calculations don't include any consideration of the end user - if the product costs more to own, but the company makes back its money faster, then ROI suggest that this is the right decision - even though long term sustainability might be compromised.

Report Review: Nielsen/Norman Group's Usability ROI

Report Review: Nielsen/Norman Group's Usability Return on Investment - In the business world, user experience endeavors are typically seen as a cost—a line item expense to be minimized to the greatest extent possible while still remaining competitive. This has led to a number of essays, articles, and books on proving the value of user experience, including a recent report by the Nielsen Norman Group.

Much more than a summary of the NNGroup ROI report, Peterme and Scott Hirsch outline key considerations for evaluating Return on Investment, and in the process discover some shortcomings of the NNGroup approach.

Benefits of User-Centered Design

The Centers for Disease Control offer a short summary of the benefits of user-centered design (22kb PDF). It's four pages of collected UCD benefit wisdom, from Tom Landauer, Susan Dray, etc. that offers a quick hit for explaining advantages of the UCD approach.

Do Productivity Increases Generate Economic Gains?

Jakob Nielsen tackles the question Do Productivity Increases Generate Economic Gains? I've been thinking about this because of this article: Time saved—a misleading justification for KM

It makes sense to save the user's time, but the justification of the Knowledge Management system ultimately has to be demonstrated by better decisions and improved performance.

Why? Because users satisfice at the typical 20-25% mark for information seeking, no matter how successful they are. Because of that, making the time = value equation may be too simplistic, as illustrated here. (Shockwave required, not recommended for dial-up)

There are some interesting thoughts on activities that don't fit traditional models for ROI. But in all of this, I wonder if the industry's focus on ROI is neglecting the users' perspective? What's in it for them? What about the users' Return On Experience? (the User ROX ;) It's only when a project generates ROI for the business, and 'ROX' for the users that it truly creates sustainable value.

Design Research: Why you need it.

From the latest Cooper Newsletter: Steve Calde has a good summary of the necessity of design research from a business perspective. Not a lot new here, but a nice way of putting things for those who need to convince clients, managers, or others of the value of design research. thanks Ben

Customer Experience Whitepapers

Change Sciences has an archive of best practices whitepapers they've produced. Free registration required. Topics include writing for the web, navigation and orientation, search, checkout, user registration, and two interesting 'design paradoxes' articles. Most interesting to me is the recent task design article, and the two older, but still valuable ROI & Investing in User Experience papers.

ROI and Professional Usability Testing

Charles Mauro of Taskz will be publishing the white paper, "Professional Usability Testing and ROI For Web-based Products and Services." on soon and has subjected the paper to informal peer review. The paper explores, in detail, on-line and traditional lab-based testing methods and their impact on ROI for mission-critical web development projects. If you would like to send feedback to Charles, please contact me and I will forward his email address to you or you can post comments here as well.

Alertbox: Return on Investment for Usability

New Alertbox on ROI.

Development projects should spend 10% of their budget on usability. Following a usability redesign, websites increase usability by 135% on average; intranets improve slightly less.

Why ROI Doesn?t Work (part 1 of 2)

Glenn Gow talks about ROI in this two part series on Marketing Profs.

Many technology companies have developed Return on Investment (ROI) tools for their sales organizations. But while many have developed some type of ROI tool, very few would claim that they are winning significant business as a result. Here's why most approaches to ROI-based selling don't work, and provides a seven-step process to make it work in your company.

Spanking Jakob

John S. Rhodes reviews Jakob's latest Alertbox, Intranet Usability: The Trillion-Dollar Question", where he says, "The average mid-sized company could gain $5 million per year in employee productivity by improving its intranet design to the top quartile level of a cross-company intranet usability study. The return on investment? One thousand percent or more.". The Alertbox shows some good recommendations based on usability tests done by NN/g. Rhodes is taking issue with his ROI figures, which make the claim that usability results in millions in savings per year. Rhodes says, "Jakob Nielsen is selling us a dream," that usability is the magic pill to cure all intranet ills.

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