Your Thoughts on an Article I'm Working On: The ROI of UX

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#1

Hey everyone!

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 I’ve included the piece below (which is unpublished as of yet).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

The value of User Experience is undeniable. TurboTax sets itself apart with it. Netflix killed Blockbuster with it. Apple built an empire on it.

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.

.25(DS(H/2)*W)/((D/U)/6)

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.

In fact, solid UX design is proven to consistently decrease customer support needs, increase sales, and increase conversions.

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?


#2

I am really bad at this myself, in that there are already a lot of articles out there on this topic. One really good one was written by Susan Weischenk. Also, Human Factors International has 4 or 6 calculators on their site for figuring out the ROI of your UX project, whether saving development time or decreasing customer support time, etc.

I guess I am not sure of the target audience for the article?


#3

Hi Doug,

Great piece well done.
I wonder if sticking with ‘developer hours’ is enough rather than going into the Dollar amounts. I feel when we put a dollar amount on something it can anchor the conversation too much. The amount people are paid varies greatly from company to company or country to country, that keeping the argument in terms of hours spent might be better.

That said, it’s very compelling to show a real cost saving to a business. I guess it comes down to who we are talking to. Do they even know what their developers get paid or what an hour of Dev time costs.

The formula is great, I can imagine having an online version where an Executive could input some of the values and it calculates the potential savings. With adjustable designer/developer ratios.

All the best,

Paddy


#4

Really liked the article! Good job on writing it.

Is it an idea to name the areas/skills of designs that are more and more needed by companies here? For example is it UX research, UX strategy, CRO or social media designs that is required so much. This could make it more specific. Did the role of the designer change over time within the development team? What is a designer doing nowadays and will this change in the future?

I’m gonna print this and hang it in the office!

Good luck with your article!


#5

Thanks - I will check it out!

The article was conceived of after talking to friend who worked as a Solo UXer for a company with a literal 100:1 developer:designer ratio. He was having a hard time pushing to expand the department because the group has generally pivoted well when they make errors and are able to fix things relatively quickly (though they do A LOT of fixing.)

The thing is, they were spending all that time doing unnecessary re-work because they didn’t bother to figure out just what it was that customers wanted. If a big customer would call up and say “we want a tab here that does X,” they’d just do it. No problem solving, no research, etc. When the tab was inefficient or caused problems for others, they’d go back and re-develop a new solution post-release.

Often, they’d do this three or four times before they got to a design that worked well for everyone. That’s 300-400% more work just to develop a single feature, which could have been saved if they had employed proper UX techniques to know their users, know their goals, observe their needs, and problem solve BEFORE putting a solution into development.

My goal in writing it was to give small, understaffed UX teams, or managers that wanted to start a UX team, some statistical fodder when making their case. Showing that UX more than pays for itself in its value to the development team alone goes a long way to making an argument that properly staffing a UX team is zero-risk strategy.

Thank you very much, both for the compliment and taking the time to read it.

This is a very fair point, and could help cut down on some of the mathyness of it. One of the reasons I went into dollar amounts was to prove mathematically that hiring a properly-staffed UX team is a zero-risk game, but I fear my argument isn’t well-stated. I’ll revise this section.

Some will, and some will not. I guess it depends on who’s reading the article.

I’ll recommend this to whoever publishes it. I don’t have a publisher lined up for it at the moment, (though we can talk about running it on UXMastery.com, @natassja, if you’re interested.) If nobody picks it up, I’ll run it on my own UX website, UXNewsMag.com. And if it goes there, you can bet I’m putting that in. Thanks for the suggestion!

Thanks very much! I appreciate you taking your time to read it and give me feedback.

This is an interesting thought. I’ll see what I can do to incorporate it, because I think it could add some nice color to the value proposition.

Thank you! I’m gathering feedback from a number of different sources, but I’ll post the link to the final version here once it’s up somewhere.


#6

Thought this might be helpful, http://humanfactors.com/coolstuff/roi.asp.


#7

Thank you very much!


#8

I know startups that have shutdown because of working this way. :slight_smile:


#9

Me, too. The crazy thing is that when trying to get things to change, they’d simply say “This is the way we’ve always done it, and it works for us.” SMH.


#10

OH, this is painful. My colleague and I are at a 30+ year company, < 100 employees, and whenever we try to propose an improvement, even a small one, there’s that very same dreaded reply. Initially, I thought it was because I was a new hire and new to UX in general, but it has proven to not be just me.


#11

This is a very well written piece. A few thoughts:

  1. That Forrester study seems based off of or is potentially a newer, maybe more modern version of Roger Pressman’s 1982 “Software Engineering: a practitioners approach” work in part in which he does a bit of the math on the ROI of UX.

Is there room to strengthen that section with the inclusion of anything Pressman wrote about?

  1. I would add a little about Don Norman, Ben Shneiderman, Jakob Nielson and Dieter Rams, all within highlighted buckets of how their work has influenced and/or bettered product and service design.

  2. Beyond the designer/developer ratios a C-Suite exec (very little time) may simply want to see a more digestible “if we did Y, the ROI could be X”, in addition to supplying use cases and examples of success or increased ROI.


#12

It could very well be. I’ve seen the oft-quoted figure in literally every article about the ROI of UX, but can’t find the full text of the study anywhere that doesn’t charge $500 for it. As I probably won’t be making that much on the article, I can’t afford to buy it and find out any more about it.

Possibly! I’ll look into it. Thank you very much for the tip. One problem I foresee is the age of the piece - some will probably bee unlikely to accept as true today work that’s older than most of the professionals.

If this becomes a longer piece, then that’s certainly a possibility. The biggest problem I’m facing here is length. The piece is already longer than most publishers like to run with, and adding more may not be practical.

One of the problems of calculating the ROI of UX is the industry in which a company sits. I work in FinTech, for instance. My product is a trading and client management platform for registered investment advisers. This means that many KPIs that UXers normally look at - things like conversions, time on site, bounce rate, etc., mean very different things than normal, and as a result measuring the ROI of a UX investment becomes a very different calculation than normal.

My goal in this piece was to show the one place where calculating the ROI of UX was a level playing field for all organizations - in its impact on the development team and prevention of wasted time and effort.


#13

Really enjoyed the article. I wouldn’t worry about someone else having written something similar, because you have you own writing style. I also enjoyed your anecdote of the solo designer 1:100 in your comment, perhaps you could add that in there.


#14

Thank you! I’ll see if I can find a way to work it in.


#15

For anyone who’s curious, the final version of this article is now up. Thanks so much for everyone that helped out - I really appreciate it!