Usability ROI

http://www.usabilityfirst.com/roi/index.txl

What is ROI? ROI (or return on investment) refers to the returned value in profit, savings, or productivity that can be attributed to a given investment. When the investment is lower than the resulting gains, a positive ROI is achieved. For example, if a company spends $10,000 on advertising efforts that result in increasing profits by $50,000, the ROI is $40,000. The ROI of Usability The returns generated from investments in website and software development are measured in both quantitative and qualitative of ways. Investments in usability can be put to the same tests. While usability improvements have often focused on qualitative metrics, they can be measured in quantitative terms as well. Improving the usability of a website can increase sales, reduce customer service calls, and increase customer satisfaction and loyalty. For internally used software and websites, like intranets and timesheets systems, improving usability can increase productivity by reducing the time to complete a task, reducing the error rate, and increasing satisfaction. Most of these improvements can be quantified by measuring saved time, gained revenues, and increased productivity. When usability is included into development and production processes, even greater returns are possible. It is always better to design something right to begin with rather than fixing it later. Building usability into your processes can reduce development costs, reduce development time, and ultimately improve the end product. Keeping end-users in mind during every step of development and production processes from requirements analysis, conceptual design, prototyping, and production ensures that products will not just be used once but again and again. Usability ROI Section Overview Measuring ROI This page discusses how to measure return on investment and provides examples of metrics and measurements. Case Studies This page offers abstracts and links to case studies in which companies have incorporated ROI calculations into their usability reviews and redesigns. Additional Resources On this page you'll find a listing of abstracts and links to additional resources cover the topic of usability ROI. Usability ROI: Measuring Return on Investment To obtain an ROI figure that is a direct result of usability testing, a variety of factors must be taken into account. It is important to gather data on pre- and post-design usability testing (in order to generate measurements that can then be compared). To maintain pure data, it is also important to have consistent variables in each pre- and post- testing session: test similar users for both pre- and post- testing, observe the same tasks, and use the same metrics. Metrics and Measurements Metrics can be quantified in the following forms: Completion rate of tasks Time required to complete a task Frequency of "Help" used Error rate Subjective satisfaction measurements These metrics, measured over a wide sampling of users, can reveal error patterns, design inconsistencies, and other stumbling blocks. Identification and eradication of these design flaws can bring some or all of the following results: Fewer development costs Shorter development time Higher rate of customer acquisition Increased customer loyalty Increased productivity Stronger brand equity Many of these improvements can be measured and translated into increased revenues, time saved, and productivity increases which can be used to calculate a usability ROI.

Usability ROI: Case Studies

ROI calculations, presented as a pattern of findings across case studies, affirm the importance of usability testing in the development stage of a product. For example, usability improvements resulting in improved task completion and shortened time to task completion for an internal company project can mean enormous savings in time and increased productivity. In other instances, usability improvements can result in increasing completed transactions, increasing customer satisfaction, and improved brand loyalty.

ROI calculations are an important piece of the business strategy puzzle. With positive ROI, company decision-makers can be emboldened that their initial expenditures will result in future savings.

Many case studies have been documented companies' positive investments in usability. A sampling of success stories follows:

• Diamond Bullet redesigned the architecture of a state government portal site that increased users' success at finding information from 72% to 95%, reduced their time in finding information by 62%, and resulted in significantly higher user satisfaction ratings. This led to an estimated savings of at least $1.2 million per year for the citizens of the state and increased revenue for the state estimated to be at least $552,000. For more information, read the whitepaper or contact Diamond Bullet Design.
  
• American Eagle Outfitters, Inc. launched a newly designed website March 5, 2001 after substantial usability improvements, and posted a 53.6% increase in sales during the month of April. (Source: internetweek.com)
  
• Delta Airlines reduced the number of pages required to get from homepage to ticket purchase (from 6 to 4) and was able to report a "measurable impact on ticket sales". (Source: internetweek.com)
  
• Move.com uncovered a variety of functional and cosmetic errors with their site. Changes such as adding embedded help to walk the user through the home search process, making certain links more visible, and making verbiage more precise helped to increase contacts to realtors by 150%. (Source:vividence.com)
  
• Egreeting.com responded to a drop in hits to their catalog page by redesigning their homepage to better direct users to the resources available on their site. The navigation was changed to a categorical scheme that explained the various types of cards available (similar to Yahoo). The result was a tremendous increase in hits to the catalog. (Source: eleganthack.com)
  
• Mitre Corporation, in 1995, launched a collaborative component to their intranet, called Mitre Information Infrastructure. Adding the component required substantial usability expertise to seamlessly integrate the new component into the pre-existing intranet, yet they have seen a substantial ROI even with such a large investment. To date, Mitre has invested $7.2 million in the MII, netting an ROI of $62.1 million in reduced operating costs and improved productivity. (Source: Software Improvement Case Studies Initiative)
  
• ARETES project, carried out by Archetypon S.A. was a process improvement experiment focused on testing activities and aimed at applying software reliability engineering methodology to development. As a result customer reported errors decreased by 77%. (Source: Software Improvement Case Studies Initiative)
  
• Brel & Kjr Sound & Vibrations Measurements software revamped its approach to development and incorporated a more rigorous requirements analysis based on user needs and expectations. Their efforts resulted in a 72% reduction in usability related problems. (Source: Software Improvement Case Studies Initiative)
  
• ENEL introduced a formal specification method into their development process based on better understanding their end users. The overall development effort was reduced by 18% and increased the number of outsourced control systems. (Source: Software Improvement Case Studies Initiative)
  
• Getrag and Gas Software Company recently expanded their technical breadth to include new tools for creating software. The new process, which is more mindful of end users, improved their program structure and documentation. These improvements yielded a productivity improvement of at least 10% and a quality improvement of 14%. (Source: Software Improvement Case Studies Initiative)
  
• Informantique CDC adopted usability tools for measuring the quality of their product. They have achieved an important reduction in maintenance costs (up to 50%) and a gain in productivity (5-10%), ultimately increasing the motivation of the software development team. (Source: Software Improvement Case Studies Initiative)
  
• Intes, a vendor of packaged software, installed a system for recording and remedying customer queries, fault reports, and program change notes. The information made available has improved customer service, boosted product quality and increased productivity by 10%. (Source: Software Improvement Case Studies Initiative)
  
• Italtel introduced the use of style guides and witnessed an increase in their rate of production tremendously. This led to an increase of delivery timeliness and better documentation both for in-house use and for customers. (Source: Software Improvement Case Studies Initiative)
  
• R.O.S.E. Informatik adopted a usability assessment plan, introduced quality assurance within the company, and advocated for better documentation of their development process. The result was a decrease in delivered errors by 60%. (Source: Software Improvement Case Studies Initiative)
  
• Sodala Software Company introduced the idea of "Use Case Scenarios" into their development process to capture preliminary requirements and design information. This resulted in a 79% reduction in the number of defects detected. Customer satisfaction also increased. (Source: Software Improvement Case Studies Initiative)

	Usability ROI: Additional Resources Below are listed some additional studies on usability and return on investment. We welcome your feedback for additions to this list. John S. Rhodes wrote a column for Webboard.com that is a comprehensive and well-laid out marketing summary for how usability testing is actually cost-effective: Usability Can Save Your Company Randolph G. Bias (ed. Deborah Mayhew) wrote one of the most widely read books on the cost/benefit analysis of usability testing called, Cost-Justifying Usability As a corollary to cost-justifying usability to the financial decision makers, editors Leslie Trenner and Joanna Bawa compiled, The Politics of Usability: A Practical Guide to Designing Usable Systems in Industry Thomas K. Landauer's, The Trouble with Computers: Usefulness, Usability and Productivity (1995) remains an excellent source for facts and figures about the gap between what computers promised to afford and the reality