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Transcript of UX Central The Business Value of UX. 2 What is UX? An innovation process that makes great products....
UX CentralThe Business Value of UX
2
What is UX?An innovation process that makes great products.
The Business Value of UX
3
What is UX?User Experience, or UX for short, is the term used to describe an innovation process that uses a deep understanding of user needs to help create GE products and services that provide meaningful experiences to our customers. UX uses a set of design methods to unlock actionable insights that help to define products. It takes these insights to design and develop the behavior of the products we create, organize the workflow for interacting with them, and to connect them with our brand.
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The UX ProcessWorking collaboratively and iteratively, informed by user needs.
The Business Value of UX
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The Idealized UX Process
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The UX ProcessUser experiences are created in stages over the course of a product’s development. UX teams engage end-users to discover insights; they design and prototype concepts and work them into detailed solutions; they implement the final product and evaluate how customer and users respond release after release. Every product requires its own approach based on local constraints, but these stages represent a healthy UX process that can bring exceptional user experiences to life.
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Generate. Test. Iterate.
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Generate. Test. Iterate.The UX process is fundamentally iterative. Research is gathered and synthesized into insights; insights seed concepts that are cyclically transformed into full-fledged products. At each step, the team’s output is validated with users and other stakeholders, and their feedback is incorporated into the next iteration of work. This iterative process helps teams continually improve the quality of what they make and helps them to catch problems more quickly.
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Market UndercurrentsUser Experience Design is a necessary competency to navigate today’s competitive landscape.
The Business Value of UX
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CustomerExpectations areShiftingMore and more companies, particularly those that provide significant value through software, differentiate through and are known by the qualitative details of the experiences they provide. The push for UX excellence largely began in the consumer space, and now the expectations set by electronic devices and mobile apps are bleeding into industrial and enterprise contexts.
Many exciting developments in IT area appearing in the hands of consumers first and only then making their way into other arenas.
- MARC ANDREESEN 1
believe the technology tools they use in their personal/social life are more efficient and productive than those used in their work life.2
61%OF GEN Y
50%
1 The Economist, “The Consumer-industrial Complex”2 Intel, “Consumerization: What is in Store for IT?” July 20103 The Economist, “The Power of Many”
OF 30+
AND
30 %Of doctors already use iPads and 30% more plan on using them in the next year.3
Market Undercurrents
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UX-focused Companies are Outperforming the MarketAt least in the consumer space, UX-focused companies create exceptional value for shareholders.
The TeehanLax UX Fund is an investment portfolio with equal shares in 10 UX-focused companies. It was created with the belief that companies that deliver great user experiences will see it reflected in their stock price.
4 TeehanLax, “UX Fund” as of 10/24/2011, http://www.teehanlax.com/uxfund/
The Business Value of UX
0%
Growth in TeehaxLax’s UX Fund4
+63.08%
Growth since Nov. 1, 2006 (as of Oct. 24, 2011)
+37.67%
NSDQ100
-9%
NYSE -13.76%
S&P500
Market Undercurrents
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UX Competencies External UXServices
UX ThoughtLeadership
Design at IBM IBM Design Podcast IBM Interactive
Philips Design Philips Innovation ServicesDesign for Usability
Competitors Have Built UX CompetenciesNot only have competitors developed UX competencies visible to the public, they have decided to monetize them by providing external consulting services. Additionally, many are positioning themselves as thought leaders by using their brands and resources to push UX thinking forward.
The Business Value of UXMarket Undercurrents
GE is already differentiating from Siemens
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Growth in UX jobs in the last 6 years.
Job Trends from Indeed.com
Companies are Investing in UX Talent & ResourcesOver the last six years, user experience-related jobs have increased by as much as 450% in the U.S. as shown by the growth of job postings mentioning “User Experience” on Indeed.com5
5 Indeed.com, http://www.indeed.com/jobanalytics/jobtrends?q=%22User+Experience%22&l=
The Business Value of UX
+450%
User Experience Jobs
Market Undercurrents
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Direct Business BenefitsUser Experience activities and investments result in immediate tangible business benefits.
The Business Value of UX
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UX Grows the Top LineIn today's consumerized B2B world, superior user experiences can positively influence business results in myriad ways. A strong UX practice yields more desirable, performative and cost-effective products.
If GE's combined Energy and Technology Infrastructure revenue in 2010 is $75.4B7, committing to UX could hypothetically unlock a $10.8B opportunity, based on a 14.4% increase in sales.
6 Forrester, “Best Practices in User Experience Design (UX)”7 GE, Form 10-K 2010
+14.4%More customers on average are willing to purchase from a company that provides superior experience versus a company that provides a poor customer experience according to Forrester.6
$10BThe hypothetical opportunity UX could offer GE’s infrastructure businesses
Direct Business Benefits
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UX Increases AdoptionA superior user experience can redefine a product category and change the way users approach a task. Such experiences, delivered through attractive, well-engineered products can become “must-haves” for an industry.
8 IPC Case Study, frog, Inc.
65%IPC, a financial sector products and services firm, achieved first-year adoption rates of 65% in an industry with typical adoption rates of 10%.8
Direct Business Benefits
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UX Increases ConversionUsers of well-designed products and services make purchases more frequently, develop brand loyalty and help secure steadier revenue streams.
9 frogIndex ROI of Design Presentation, frog, Inc.
45%For a major e-commerce business, streamlined purchase paths yielded a 46.5% increase in revenue and a 64.5% increase in the number of units ordered between Q1 and Q4.9
Direct Business Benefits
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Great UX Increases Perceived ValueProducts that connect with customers on an emotional level can command a premium in the marketplace.
9 frogIndex ROI of Design Presentation, frog, Inc.
60%A media company’s design commanded a 60% premium over comparable products in a competitive category – and sold out in the first year.9
Direct Business Benefits
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Great UX Reduces ChurnThe better aligned a product is with user needs, the better it will accomplish the task he or she is trying to perform. If well-enough aligned, switching to a competing experience can be seen as losing functionality.
6 Forrester, “Best Practices in User Experience Design (UX)”
15.8%
Fewer customers on average are likely to consider switching to a competitor when offered superior experiences vs. poor user experiences according to Forrester.6
Direct Business Benefits
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Great UX Increases Customer EfficiencyReductions in task completion times can add up to massive productivity savings for a business. In a commerce context, customers who move easily for information to point-of-purchase will complete sales more often.
10 SAP Case Study, frog, Inc.
50%A product redesign for SAP led to a 50% reduction in the time users spent on a given task, increasing efficiency and prompting significant savings.10
Direct Business Benefits
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Great UX Improves Product PerformanceDue to tight collaboration between design and development teams, along with improved focus on key features, opportunities for experience optimization are more readily identified. This can dramatically enhance task completion times and customer efficiency.
10 SAP Case Study, frog, Inc.
80%After a major GUI redesign, SAP experienced an 80% improvement in load and render times for a product.10
Direct Business Benefits
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UX Reduces Costly ErrorsUX can reduce avoidable rework of produced by mitigating some of the most common factors for why software projects fail and get requirements right when the cost of changes is lowest.
UX activities can be thought of as wellness activities for product development. UX activities up-front can avoid a lot of costly surgery on products down the road .
11 IEEE, “Why Software Fails”
Common factors of software failure are
mitigated by UX activities.11
312
OF
Cost of fixing an error IN
development.11
Cost of fixing an error AFTER
deployment.11
Direct Business Benefits
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UX Saves on Product Development Costs & Increases MarginsEven a small reduction in cost could mean big savings.
If R&D Spend in 2012 is 5B2, even a 10% reduction in avoidable rework in this amount would mean a savings of 250M.
Let’s say there are 150 NPI in 2012 12 and you spend 200K per NPI on UX Activities.
GE is still saving $470M overall.11 IEEE, “Why Software Fails”12 Estimations based on GE Annual Outlook 2010
of work by software specialists is spent
on avoidable rework.11
40%
50%TO
$4.0B
$4.5B
$5.0B
GE R&D Spend Comparison
WIT
HO
UT U
X
WIT
H U
X
$470M in savings with
a hypothetical
10% reduction in
rework
$30M in UX investment
(200K per NPI for 150
NPIs)
Direct Business Benefits
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UX Speeds Time to MarketOn average, 5% of product features are used 95% of the time. UX can prioritize feature sets to aid in faster time to market and meet customer expectations.13
13 Strategic Data Systems, “UX Business Impacts and ROI”14 GE Money Case Study, frog, Inc.
75%Faster launch of sites in new markets14
Direct Business Benefits
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Broad GE BenefitsThe User Experience Center of Excellence coordinates the individual UX efforts of product teams to generate value across businesses.
The Business Value of UX
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Product teams can get support and recognitionwhen they work with the User Experience Center of
Excellence to contribute to the broader UX effort at GE.
Great UX Improves Product PerformanceProduct teams get support and recognition when they work with the UX Center of Excellence to contribute to the broader UX effort at GE.
1 frog Inc.
Drive adoption of repeatable UX practices within GE through projects.
Increase productivity of UX investments via knowledge sharing within and across GE businesses.
Decrease cost per project by leveraging UX expertise, tools and assets across GE.
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2
3
Broad GE Benefits
UX MaturityProductivity
Cost
Learning Curve
Experience Curve
UX CoE Pilot Programs
UX Central & UX CoE PR Efforts
Innovation Accelerator Projects
YourProjects
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“We’re measuring GE’s top leaders on how imaginative they are. Imaginative leaders are the ones who have the courage to fund new ideas, lead teams to discover better ideas, and lead people to take more educated risks.”
- JEFF IMMELT
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Next Steps for Leaders & Product Teams
Invest time and budgetary
resources in UX practices
throughout GE
Track, measure
and document
the success of UX
activities in your
projects
Partner with and contribute to the User Experience
Center of Excellence
before, during and after projects
Become an advocate for the adoption of UX
practices
Find information that can help the UX efforts
on your project on UX Central
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References
1 The Economist, “The Consumer-industrial Complex”2 Intel, “Consumerization: What is in Store for IT?” July 20103 The Economist, “The Power of Many”4 TeehanLax, “UX Fund” as of 10/24/2011, http://www.teehanlax.com/uxfund/5 Indeed.com, http://www.indeed.com/jobanalytics/jobtrends?q=%22User+Experience%22&l=6 Forrester, “Best Practices in User Experience Design (UX)”7 GE, Form 10-K 20108 IPC Case Study, frog, Inc.9 frogIndex ROI of Design Presentation, frog, Inc.10 SAP Case Study, frog, Inc.11 Robert Charette, IEEE, “Why Software Fails”12 Estimations based on GE Annual Outlook 201013 Strategic Data Systems, “UX Business Impacts and ROI”14 GE Money Case Study, frog, Inc.