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Understanding the ROI of Enterprise UX
Creating ERP Value for the Long Haul For large companies, ERP environments can be a tangled web indeed. The systems ...
Creating ERP Value for the Long Haul
For large companies, ERP environments can be a tangled web indeed. The systems that manage your accounting, procurement, project management, supply chain, marketing, compliance, human resources (we could go on) don’t always play well together. Vertical integration of these systems may seem like a panacea, but most enterprises don’t want all their ERP eggs in one basket. It’s either too expensive, too risky, or both. The alternative, of course, is a mishmash of systems that require a lot of time and effort to operate and maintain.
CIOs love to talk about digitizing every link of their value chain, but the reality we often see is manual workflows that are prone to error, breed confusion, and steal productivity from your users. We’ve been practicing what we call Enterprise UX for over 20 years, and we’ve learned a lot about solving these complicated problems — the first of which is always making the case for improvement. We have a simple, straightforward ROI Calculation below, but first let’s align on terms:
What is Enterprise UX Anyway?
Enterprise UX is the simplest way to describe the practice of User Experience design and research on enterprise systems. While software as a service (SaaS) platforms are constantly evolving, their functions and workflows still don’t account for every possible use case and integration. Custom development can and does solve a lot of problems, but it’s expensive. We also see a lot of custom solutions that, because of the limited purview of a developer on a particular platform, may not take into account a larger set of needs from user personas throughout the enterprise. The practice of Enterprise UX acts as a bridge between platforms, developers, stakeholders, and (most importantly) users as we design processes and workflows to optimize efficiency and win back time for your creative and sales organizations to focus on what they do best.
SaaS platforms sell their systems’ infinite “scalability” and “adaptability,” but this is only true if implemented with actual users and use cases in mind. In practice, the platforms often push their customers to adapt to their prescribed workflows. But what if those workflows don’t work for your users? These little compromises add up over time until the value the system provides is not worth the cost to maintain it — and that, in a nutshell, is why ERP environments are in a constant state of flux.
Inertia and a “set it and forget it” mentality also create inefficiencies that we see all too often. If your legacy systems aren’t adding value — it’s time to think about retiring them. Of course, corporate procurement policies often take these decisions out of your hands. So you resort to a game of chicken with your SaaS’s Customer Experience team. There’s a better way. Why not invest a little in an independent UX practice whose interest is in helping you create efficiencies throughout the ERP landscape?
What is a Platform Audit?
In large enterprises, you may have no line of sight to the systems that are in use. Your CIO should be able to give you a complete account of all platforms in use, and an overview of their functions. Diagramming workflows and processes and the user personas who interface with the system will help you understand and socialize those functions most relevant to your use case.
Diagram Your Workflows
Now that you have a clear understanding of how everything works, you might have a few clues about which workflows need improvement. Validate your hunches by examining user behavior. You can do this quantitatively by recording sessions, scouring error logs, and examining how much time is spent interacting with the system. Try to estimate the share of your users’ time spent by category: Productive time such as sales calls, ideation, development, and execution; versus non-productive time such as operational and administrative tasks. The goal of any system should always be to move more time into the productive column for its users.
On the qualitative side, simply ask your users. They will be more than willing to share where they see system bottlenecks and opportunities for automation. Your research may have identified a few quick wins you can implement right away. Execute them, and capture the savings to fund more complex projects in your pipeline.
Define and Prioritize
We’ve seen a lot of processes get tangled up in enterprise platforms. Notable examples include: Marketing campaigns, sales enablement, procurement, merchandising, customer experience, logistics, and just about anything else that either requires a measure of customization, or interfaces with more than one enterprise system. You may have a particular process in mind, but your audit may have uncovered other priorities. How do you choose what to tackle first?
Start by Estimating Your ROI
Choose a process and estimate the value of the non-productive time spent completing it. Look on your diagram for all manual inputs, workarounds, and data aggregation, plus all spreadsheet crunching and physical data handoffs— any and all pain points that could be fixed by Enterprise UX. Your annual cost equals the number of users multiplied by the time they spend on these tasks:
x Average Hourly Rate ($)
x Hours/Week (#)
x Workweeks/Year (e.g.: 50)
= Annual Cost ($)
Then estimate the incremental revenue that could be gained if your users spent that time more productively. For example, how many more calls could your sales team make per week? Multiply that number by their win rate for incremental sales per week:
x Sales Calls/Hour (#)
x Win Rate (%)
x Average Sale ($)
= Annual Opportunity ($)
Creative, Product Development, and Marketing teams have similar quantifiable deliverables that will increase as non-productive time decreases. Use their KPIs to estimate your opportunity.
From here the basic equation is the simple:
+ Cost Savings ($)
– Development ($)
– Sustainment ($)
= ROI ($)
You may choose to add other factors, such as training and help desk savings, increased employee retention and morale, and reduced user error rates. If quantifiable, these could make an even more compelling case for investment.
Your calculations may show dramatic return on investment in the first year, especially for large-scale processes. Other processes might take longer to recoup the initial investment, but still make a strong case when amortized over a longer period. In either case, maintain a budget for sustainment and improvement, which will continue to pay you back with efficiency gains. The ERP landscape is constantly evolving, and it pays to plan ahead.
Finally, never stop collecting feedback from your users. They are your allies in creating systems that return value over the long haul. Focus on the user is what Enterprise UX is all about. Automation, integration, and features are part of it, but they aren’t ends in themselves. The most valuable return on investment comes from enabling your users with technology, and not the other way around.