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Understanding and Influencing Business

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Strategy and tactics in a nutshell

A column by Liam Friedland
March 9, 2015
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“Normally, we do not so much look at things as overlook them.”—Alan W. Watts

Making a Business Case for User Experience

Building modern software products is expensive. The design and implementation of a product user experience typically requires 40% of the overall software development cost. Therefore, on a $2 million software development project, building the user experience will require roughly $800,000 of the project budget. This is a non-trivial amount of money. Of course, just designing and building the product is not the end of it. There are the costs of marketing, advertising, and selling the product, as well as the cost of supporting it after its release. The total expense of creating a software product can easily run into millions of dollars.

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To justify this expense, you must build the business case for user experience, as shown in Figure 1. Whether you are a UX research or design professional or a UX leader, you should utilize analytical frameworks to understand and describe the business value of the contributions that User Experience brings to the table. You should be able to present a complete business case for user experience to your corporate management.

Figure 1—Understanding and influencing the business
Understanding and influencing the business

The UX Value Chain

One important framework to consider is the value chain of a business. Professor Michael Porter developed the concept of a value chain, which describes the five steps that companies take in creating business value, as follows:

  1. Inbound logistics—how a company takes in materials
  2. Operations—converting and processing the inputs into goods or services
  3. Marketing—advertising and selling products and services
  4. Outbound logistics—getting the products to customers
  5. Service—providing additional, follow-on services to keep customers happy

Although Porter developed this value chain to describe traditional, manufactured products, this concept is useful in building a business case that highlights a UX team’s contributions and their impacts at each step in the process. Now, let’s consider each of these in turn.

Inbound Logistics, or Requirements

For a software company, inbound logistics usually constitute the incoming information about what will satisfy business demands and customer needs—that is, the requirements. These usually result from

  • understanding a product’s contexts of use
  • recognizing differentiation opportunities
  • assessing the competitive marketplace
  • leveraging clickstream analytics
  • evaluating requests for enhancements

UX research is uniquely positioned to contribute a tremendous amount of insight in many of these areas. A well-structured UX research program delves deeply into users’ goals, activities, and tasks; and can expose significant process and procedural bottlenecks in work practices. Investing in UX research enables a business to develop a keen understanding of the various roles within the business, how they work, and what they require from their software tools. Few other disciplines within modern companies are better suited to explore and describe these topics of research.

Operations

Operations encompasses the bulk of software design and development. Thus, this is the point at which the UX team really earns its pay. A well-run UX design process can provide many valuable returns to a business, such as the following:

  • quickly and inexpensively exploring multiple solutions and alternative product options
  • creating prototype concepts that not only allow you to evaluate the effectiveness of alternative solutions, but also provide your entire product team with a vision for how key pieces of the product should come together and interoperate
  • validating design options with target users to ensure they best fit audience needs
  • creating design specifications that allow development teams to build software efficiently, without constantly having to stop and raise questions about how the product should work

Marketing, Outbound Logistics, and Service

In today’s world, most companies offer their software products through the cloud. In these environments, marketing and selling, outbound logistics, and services are significantly different from those for traditional methods of marketing physical products or software code that ships on discs. Marketing, selling, getting your products to users, and providing service are now integral parts of the user experience. Although companies often refer to these collectively as the customer experience (CX), they are really just extensions of the user experience. And UX professionals have many, if not most, of the research, design, and validation skills that are necessary to make deep contributions in these areas.

In the end, a high-quality, usable product experience that maps to users’ goals, activities, and tasks is much easier to sell than one that doesn’t meet this bar. This is true not only for consumer products—for which people often make their buying decisions fairly quickly—but is particularly true for professional, enterprise products—whose evaluation cycles can be lengthy and involve large teams of decision makers.

Conclusion

Whether companies choose to acknowledge it or not, design happens. And design should happen through a professional, well-coordinated process if companies want to deliver useful, usable products and services. By using Porter’s value chain as an analytical framework for user experience, UX designers, strategists, managers, and leaders can deconstruct their business and map out the UX team’s many contributions along the value chain. 

In Role of UX | UX Strategy | Value of User Experience

Liam Friedland

User Experience Architect at Respond Software

Redwood City, California, USA

Liam FriedlandLiam is a UX-design architect and leader whose experience spans nearly three decades. He has worked for large and mid-sized companies, as well as startups. His professional work focuses on the intersection of people, design innovation, and technology. Over the course of his professional life—working in a variety of product domains—Liam has defined and delivered a diverse portfolio of UX-strategy, architecture, and design work. He also has deep experience in design management and leadership.  Read More

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