Hi all,

I am looking for ROI calculation tools on usability (of web applications).

cheers
Alok Jain

As Alex says in his excellent post "Start tracking core metrics of your current operations asap".
A good starting point would be the excellent white paper 'E-Metrics: Business Metrics for the New Economy'
at:
http://www.e-consultancy.co.uk/knowledge/whitepapers/whitepaper_view.asp?id=28

On 09:55:05 27 July 2001 alexkarle wrote:
>ROI of usability or in other words improvements in the
>user experience of a web application has come to the
>forefront of the discussion in recent months. Especially
>when IT and online budgets have been either frozen or cut
>significantly, design efforts need to be based on
>measurable business objectives (not that they shouldn't
>have been based on ROI before...). Still, I currently
>experience two major hurdles with my clients when it comes
>to measuring the ROI of web application design:
>
>* Decisions on design improvement projects have
>traditionally been based on opinions on the "look and
>feel" of a design as judged by major internal
>stakeholders. ROI has almost never been considered in
>previous efforts, therefore there is a general lack of
>understanding and reluctance to admit that new initiatives
>should be based on ROI.
>
>* Even if clients state the need for ROI calculations, in
>many cases there is a general lack of data for current
>site performance, which (at least in the eyes of many
>web-site operators) makes it difficult to compare current
>performance/ROI with post-redesign site performance.
>
>Although I would argue that there is no GENERAL model for
>determining the ROI of a redesign effort, I believe that
>for most efforts there are multiple, straightforward ways
>of estimating an ROI based on reasonable assumptions and
>the tracking of key metrics. I believe that the major
>elements of an ROI approach are:
>
>0.1. Build a general apprehension of ROI as a design
>criteria in the organisation
>
>0.2. Start tracking core metrics of you current operations
>asap - simple tools like Webtrends are a good start, but
>you might want to get more sophisticated later on. If you
>don't track anything else, definitely do track where your
>site visitors come from, which pages they most frequently
>visit and from which page users currently leave your site
>
>1. Create scenarios of how you think your high-value users
>should interact with your site - based on your target user
>segments, define various different scenarios and then link
>those scenarios with your business objectives. I.e., for a
>music site, teen visitors interested in pop music trying
>to purchase products, techno fanatics looking for the
>latest clubbing information, etc.
>
>2. For each scenario, identify barriers on your current
>site to quickly reach a user's objective.
>
>3. Identify current metrics, i.e., current conversion rate
>for visitors is x%, x% of visitors abandon the site after
>doing a single search (i.e., they did not find what they
>were looking for), etc.
>
>4. Build a financial model that reflects key scenarios and
>links them with key business metrics. I.e., number of
>overall site visitors -> number of visitors opening a
>shopping cart -> number of visitors actually buying
>products -> average value of purchase
>
>5. Identify costs of redesigning parts of your site/one
>critical scenario or user path. Cost categories can
>include: User testing (field studies, user experience lab,
>expert evaluations, etc.); copywriting; purchase of
>improved content; costs for additional features (e.g.,
>improved search engine); redesign of key features (e.g.,
>shopping cart, product evaluation tools); estimates of
>design efforts need to be based on realistic development
>efforts (team size & costs/day)
>
>6. Based on your model developed in 4. and cost estimates
>in 5., estimate the ROI by altering your key parameters
>for a specific design effort/scenario (i.e., "what
>if" analysis - if my design project improved
>conversion rates by x% that would yield an ROI of Y)
>
>7. Prioritise multiple design efforts using outcomes of 6.
>
>I just wanted to reiterate that there is no general model
>for calculating the ROI of a specific design effort.
>Although key inputs (e.g., hourly rates for members of
>your design team, costs for user studies, etc.) are
>reusable, you will need to customise your model for every
>new design effort.
>
>Alex
>
>
>