Designing for the customer and the bottom line: Costs and benefits of user-centred design

1. Designing for the customer and the bottom line: Costs and benefits of user-centred design Gitte Lindgaard Carleton University Ottawa, Canada

2. To convey your …. message you must know what that message is and how to convey it (Chapanis, 1988)

3. Traditional UCD focus • User experience • Who are the application users? • What tasks will the application support? • What other tools do users employ? • What is the environment like?

4. UCD cost-benefit analysis • 10 years ago • Estimated costs of applying usability methods (time to set up, run tests, analyse data, write up) • Estimated benefits of finding x number of usability problems

5. UCD cost-benefit analysis now • What are you selling? • Who are you selling to? • Can you substantiate your claims? • Hypothetical numbers are low in credibility • Case studies may not look like they are similar to the current situation • Is the time right?

6. Who is our immediate client? • Marketing: promote snazzy features • But don’t give them ideas that IT can’t deliver • IT: technical wizardry and miracles • But must be linked to the business case • Project manager: deliver on time and to budget • Finance: keep costs within budget • Training: cannot increase training costs • So must know the implications of your great idea • Corporate ID: must reflect our image

7. Who owns the user experience? • Hardware ... Shape, size, weight, labels… • Software … installation procedure Ok? • QA …fault free products • Tech writers … user manuals, instructions • Training … sufficient, efficient, economic • CSRs … cope with customer questions • Marketing … position products • etc. etc.

8. Hardware Tech writers Training QA Software Customer services Different owners & cultures

9. What’s your business? • Consumer products • Generic hardware/software (PDAs, games, smart watches) • For a specific target audience (business DSS, financial planning SW, scheduling SW) • Customer-specific products • Internal to your organization • For outside customers (EMS, WMS)

10. What’s your business? • Consumer products • Generic hardware/software (PDAs, games, smart watches) • For a specific target audience (business DSS, financial planning SW, scheduling SW) • Customer-specific products • Internal to your organization • For outside customers (EMS, WMS)

11. Targeted consumer products • Dental support system • 7 manyears • > $2million development costs • Worked with dentists … employed at a Unversity • Special features: • Multimedia data storage & manipulation • Video camera … to confirm diagnosis • Speech I/O … to avoid keyboard • Excellent scheduling capability … if > 4 dentists

12. User instructions • Problems installing a printer driver • 50,000 calls to help desk • + send out patch on disk • Cost > $900,000 + between $600,000 and $12,5 mill • Evidently no user testing prior to release • User manual style and template • 50% of $1,68 mill per year • Cost of style & template $80K

13. The Cordis story 1996 • Johnson & • Johnson acquired • Cordis at • $109 share value 1995 • $443m annual sales • Stent was born... • $1billion sales in year 1 1993 • $223m Annual sales • $20 share value • <1% market share of • angioplasty balloons • Goal: 5% market share

15. Know thy users’ goals • Cordis focused on desired outcomes • Outcome-based interviews • Desired outcomes • Decompose the process • Organise the outcomes in categories corresponding to each step in the process • Rate outcomes for importance and satisfaction • Use outcomes to jump-start innovation (Ulwick, A.W., 2002)

16. Outcome-based interviews • Began to define every step underlying usage process • Inserting catheter into an artery • Placing the balloon at the lesion or blockage • Opening the artery by inflating the balloon • Removing the catheter

17. Stakeholders, yes but… • Know precisely who to focus on • Cardiologists who perform the procedure • Nurses who assist the procedure • Hospital administrators who sit on the purse strings

18. Capture desired outcomes • Moderator • clarifies and validates customers’ statements • digs beneath the surface of words • makes sure every aspect of the process/activity is gone through • Each statement translates into one desired outcome containing • Type of improvement required (increase minimize) • Unit of measure (time, n, frequency) • Outcome statement used later in benchmarking, competitive analysis, concept evaluation • Rephrases statements until they are free of solutions • Then confirms statements with participants

19. Organise the outcomes • List collected outcomes, remove duplicates • Categorise into groups corresponding to each step in the process, here • Inserting catheter into an artery • Placing the balloon at the lesion or blockage • Opening the artery by inflating the balloon • Removing the catheter • With this we can measure value to the customer

20. Rate and use outcomes • Rate outcomes for • Importance and satisfaction, i.e. how well is each outcome currently satisfied? • Use outcomes to jump-start innovation • Cordis identified several new product opportunities and set new goals (e.g. 20% reduction in restenosis)

21. [Importance + (Importance – Satisfaction) = opportunity]

22. Changing UCD focus • Who are the application stakeholders? • Includes users • What are their goals? • Includes tasks • What products compete with this one? • Includes other tools used

23. Product 2 Product 1 Product life cycle Amount of effort Time

24. Now, to the web Fortune 1000 companies spend on average $1,5 - 2,1 mill/year redesigning their web sites without knowing whether this actually improves them for users Kalin (1999)

25. 1a • Business goals • Customer conversion • Increase retention • Increase transactions • Customer goals • Easy to learn • Easy to find & buy • Access to help when I need it 1b Satisfaction of Customer goals leads To satisfaction of Business goals 4 2 User interface Back-end system and processes 3 Engagement and Interaction process, Including content and transactions Overall goals from Donahue (2002)

26. Novice Target user zone Early adopter • Early adopter • fast • aggressive • needs little /no help • values fast, efficient • user experience • New user • Tentative • May need proactive help from Donahue (2002)

27. Web development life cycle Architecture Information and Technology architecture Visual design Look & feel 2 3 Validation usability tests 4 Strategic planning Define user and business goals 1 5 Execution Business evolution 8 6 Launch 7 Maintenance from Donahue (2002)

28. Deliver value to all segments Business goals User Online experience Directed user behaviours must drive Convert browsers Prospective customer Relationship Researching firm to customers and (i.e. browser) establishing activity requesting information Increase client base and follow-up Increase Existing customer Relationship- Increasing frequency of Retention rate retaining engagement, level of behaviour membership Deepen existing Existing customer Relationship- Increase number of points Customer deepening activity of contact with customer relationships Increase productivity Employee Creation of usable Action based on Inside the firm inside the firm data about profitable understanding and analysis and cost-efficient of transaction and data transactions usage from Donahue (2002)

29. What’s your business? • Consumer products • Generic hardware/software (PDAs, games, smart watches) • For a specific target audience (business DSS, financial planning SW, scheduling SW) • Customer-specific products • Internal to your organization • For outside customers (EMS, WMS)

30. Hidden costs • In the U.S. 31% large development projects (budget > $100,000) cancelled before completion • Of those that were completed, 52.7% were 189% over budget on average and cost an additional $59billion in 1995 (Ewusi-Mensah, 1997) • A 6-month delay in release adds 33% after-tax profits (House & Price, 1991)

31. Creeping costs • Fixing a problem worth $1 during project definition costs • $10 if fixed during development, and • $100+ if fixed after product release

32. Creeping costs Cost of changes N possible design alternatives Requirement Development Deployment Phase Phase Phase

33. Creeping costs • Total maintenance costs $20-30billion/year • Backlog maintenance minimum 167% of this (Martin & McClune, 1998) • … 80% of all problems are identified during maintenance, and it is estimated that 80% of these could be saved with a thorough UNA!

34. Calculating costs and benefits • 2 parameters are important: • Cost/benefit ratio • Relationship between projected use of resources and post-implementation/post-sale value of the investment (and savings during development) • Payback period • The amount of time it will take before the product starts to outweigh the cost of the investment

35. Costs and benefits • Cost/benefit ratio • Relationship between projected use of resources and post-implementation/post-sale value of the investment (and savings during development) • Cost • Team of 4, 2 hours @ $60 = $480 • Saving • 4 person days = 32 hours @ $60/hour = $1,920 • Cost/benefit ratio = 1:4

36. An example • Core system - customer records • customer requests • services & equipment for every telephone number (n lines, n sockets, cables, exchanges) • linked with other systems (billing, cables, faults, WP/YP, service orders, scheduling)

37. OEO50I INIT ENTRY: ANDREW MEDICI I11489 SERV#: _______ EXT#: _________ EE#: _____ *** TPIS/2 ORDER S&E ENTRY *** EXCH ACT: J EXCH CODE: ______ INPLACE: _________ IP DATE: ______ EXCH RMK: ____________________________________________________________________ SERVICE NAME: ________________________________________________________________ ADD ADDR INFO: _______________________________________________________________ SUB ADDR TYPE: ______________________________ SUB ADDR#: ____________________ STREET#SFX: _______ ________ NAME: ____________________ TP/SFX: ______________ LOCALITY: __________________________ POSTCODE: ________ FLT CLR PTY: ___ TEMPORARY: _ AL CONN: _______ ROT CONN: ___ PEXT? __ LINE TYPE: _____ NEXT FAC: _ LN SEL: __ ARE CODE: REM/CCN(R/N): __ - SERV STATUS: ___ DISC TYPE: PAL#: _______ RENTAL RATE: ___ METER RATE: ___ CONC AUTH: _________ CAB#: ______ ASIC: _________ DIRECTORY ACTION REQ (Y/N): _ DIRECTORIES#=-> WH: __ YE: _ COM: ___ COMMAND: ______

38. OEO50I INIT ENTRY: ANDREW MEDICI I11489 SERV#: _______ EXT#: _________ EE#: _____ *** TPIS/2 ORDER S&E ENTRY *** EXCH ACT: J EXCH CODE: PBX334 INPLACE: 3374606 IP DATE: 04089996 EXCH RMK: N/A QREMM SERVICE NAME:PETER JAMES HOUSTON ADD ADDR INFO: ROWANVILLE MELA SUB ADDR TYPE: SEMI-ATT. DUAL H/H DWELLING SUB ADDR#: 337A STREET#SFX: CRESCENT NAME: ST BARTHOLOMEW TP/SFX: PMT/YY LOCALITY: ROWANVILLE WEST POSTCODE: 3957 FLT CLR PTY: ROP TEMPORARY: N AL CONN: P/T ROT CONN: 3F PEXT? Y LINE TYPE: PBX NEXT FAC: N LN SEL: PR ARE CODE:TTYP-M REM/CCN(R/N): 2X - SERV STATUS: INP DISC TYPE: PAL#: POTT/P RENTAL RATE: RES METER RATE: PM1 CONC AUTH: MELA CAB#: 228FS/476PW ASIC: 338PY DIRECTORY ACTION REQ (Y/N): N DIRECTORIES#=-> WH: N YE: N COM: PB COMMAND: EXT

39. Through the operator’s eyes • Activity analysis of 2,000+ calls (Wilson, 1995) • Typical call activities: Interacting with computer 190 sec Interacting with customer 148 sec Walkabouts 33 sec 33 min/d Making phone calls 28 sec 28 min/d Paperwork 24 sec 24 min/d Other behaviour 12 sec  Total time wasted 85 min/d

40. Other problems • Data accuracy rate (for accepted transactions only) = 70% • Database not in place at cutover • On-the-spot system rejections = ?% • Absenteeism increased >200% during study • 2 suicide attempts, 2 nervous breakdowns, numerous staff on long term stress-leave • Staff turnover rates ~120% in 3 months

41. CSR time $M13 Communication $M1.6 Cost Total $M30!!! Tech time $M3.7 CSR Training $M10.4 Help, support $M0.5 Enhancements $M.8

42. Cost-benefit ratio: • Total costs of waste year 1 $ 30 million • Total cost of study $ 90K At least 50% could be fixed easily at a cost of $1million and within 1 year • Waste after 1 year $15 million • Cost-benefit ratio 1:1.38

43. Another example • HR processing applicants • Current process time 4hours/applicant • Data entry costs $25/applicant $100/applicant • HR processes 1,000/year $100,000 • Programming time 40 hrs @ $60/hr $ 2,400 • Usability work shows 50% user time saved, but say 25% • Cost/applicant now $75 or $75,000/year • Benefit per applicant $25 or $25,000/year • Benefit in year 1($25,000-$2,400) $22,600 • Benefit in year 2 $25,000 • Benefit in year 3 $25,000 • Total benefit (year 1 + 2 + 3) $72,600 • Cost-benefit ratio 72,600:2,400 1:30.25

44. What’s your business? • Consumer products • Generic hardware/software (PDAs, games, smart watches) • For a specific target audience (business DSS, financial planning SW, scheduling SW) • Customer-specific products • Internal to your organization • For outside customers (EMS, WMS)

45. Warehouse Management System • Bottlenecks: Assemblers • Handheld devices sometimes miss an entry • Voice Recognition System freezes • …Assemblers work to standards • ….they can’t offload orders in bay specified • Bottlenecks: Loaders • Can’t find orders • Loads are too tall for trucks • Loads must be dismantled and reassembled • …2/3 of loaders’ job spent re-doing assemblers’ work

47. Changing UCD focus • Who are the application stakeholders? • Includes users • What are their goals? • Includes tasks • What products compete with this one? • Includes other tools used • What is the context like? • Includes community of work, division of labour, rules

48. UCD opportunities • Strategic planning (web) • Product definition stage (Cordis) • User Requirements capture stage (dental support system) • Outside of development cycle (Customer records system) • During SDLC (traditional usability studies)

49. UCD methods • Social/behavioural science methods • Opinion-based (interviews, surveys, reviews, focus groups) • Performance based (activity analyses, user tests, observations)

50. UCD challenges • Must expand • User focus to business focus • Single product to product range focus • Understanding of business goals, processes • Notion of “team” beyond project team • Must move outside the usability box