I’m curious to hear your thoughts on an article I’m working on, which discusses the ROI of UX. I’ve included the piece below (which is unpublished as of yet). I’m trying to get a sanity check that this A.) makes sense; B.) is easy enough to read and understand and; C.) is useful to teams looking to establish/expand a UX group.
If you have a few minutes to read though and leave me your thoughts, I’d really appreciate it. The full text is below.
THE ROI OF UX: BUILDING THE ARGUMENT TO START OR GROW YOUR UX TEAM
And the tech industry as a whole finally catching on the to value of UX and design thinking.
According to TechCrunch, some of the top tech companies in the world have dramatically reduced their developer-to-designer ratios over the past decade. IBM, for example reported a 72:1 ratio in 2007. They’re down to 8:1 as of 2017, with plans to hire even more. Other big companies, like Facebook, have bought out entire design firms just to hit their target.
It’s gone so far that the glut of hiring has created a vacuum of available talent in the market.
With success stories and hiring shortages proving the industry’s overall commitment, it may be surprising that the blessing from big tech companies isn’t enough to push others over the edge. Small and midsized companies, in particular, with new or absent dedicated design teams appear to be the most resistant to embracing the investment in solid user experience design.
The Equalizer: The ROI of UX on Development Teams
Proving the ROI of UX has always been a tricky subject. While it seems like common sense that making a more usable and pleasant experience should naturally lead to higher conversion and more return visits, mathematically proving the value of good UX design is no easy task.
What’s more, each business is different. Industry differences, product offerings, and service types make it nearly impossible to create a single equation that shows the ROI of UX across all industries.
There is one area, however, where the impact of solid UX design processes is universally estimable: the impact it has on the time development teams spend fixing broken software.
The Institute of Electrical and Electronics Engineers (IEEE) put out a report in 2005 on the reasons why software development projects failed. It listed 12 common reasons why projects failed, many of which had nothing to do with the user experience of the software. But tucked in among pieces like “sloppy development practices” and “unmanaged risks” were pieces that could be mitigated by solid user experiences approaches.
In fact, the study found that nearly ¼ of the most common reasons why software development projects failed concerned areas where a properly-staffed and functioning UX could have mitigated or eliminated those risks.
Perhaps just as stunningly, the report also estimated that nearly 50% of any developer’s time is spent re-working failed software.
In short, this suggests that good UX practices and properly-staffed UX team can eliminate 1/8th of developer lead time in projects. This also gives the basis for an imperfect formula to estimate the ROI of UX on the development cycle alone.
Figuring Out the Math
Brace yourself. Things are going to be mathy here for minute. Here’s the formula, and a quick explanation. (If you’re not interested in the formula and its explanation, skip ahead to the next subheading.)
We take the number of developers and multiply that by their average hourly salary to get how much is spent on the development team per hour. We then take that number and multiple it by the average number of hours worked in a week per developer, halved, to represent the concept that designers spend roughly half their time each week re-working failed software. Multiply that by the average number of weeks worked per developer per year to get the total cost of failed software projects to a company.
We then multiply that number by .25, to represent that solid UX principles can mitigate ¼ of that re-work. All of this is divided by an equation that assumes an ideal 6:1 developer-to-designer ratio, as evidenced by current TechCrunch report on staffing levels.
The equation, when written out, looks like this.
D = Number of Developers
S = Average Hourly Salary per Developer
H = Average Number of Hours Worked per Week per Developer
W = Average Number of Weeks Worked per Developer
U = Number of UX Professionals
Processing the Figures
Let’s examine things from a practical perspective, using Denver, my hometown, as the example.
According to Glassdoor.com, the average software engineer salary (not including benefits) in Denver is $98,477/year, which equates to $47.34/hour. We’ll add on another $20ish/hour in benefits and bonuses for a total of around estimate of $70/hour total compensation.
If we assume a 40-hour work week and three week’s vacation for each developer, that means the impact of hiring a single UXer to work on a team with six designers in Denver is about $102,900. That’s already more than the average UX Designer Salary in Denver of $87,505.
It’s important to stress that these figures take into account only the ROI of UX on developer’s time spent re-working failed software. That means that, just looking at this very narrow piece of UX design impact, the investment of hiring and staffing a UX team is already paying for itself.
The Bottom Line
While happier developers and a more agile business are certainly great for the company as a whole, the numbers the tech industry is amassing in favor of solid experience design are beginning to show that ROI of UX is much more massive. One oft-quoted study from Forrester claims a return of $2 - $100 for every $1 spent on user experience investments.
Apple CEO Tim Cook is famous for saying “Most business models have focused on self interest instead of user experience. [The user experience problems] are the ones we solve to solve.”
To put it a different way, those who are already onboard are already reaping the profits. Those who aren’t yet on board now face a choice: embrace the power of user experience, or die at the hands of competitors who have. What choice has your business made?