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Rich Internet Applications (RIAs) use technology like AJAX and Flex to free Web users from HTML\'s often painfully slow post-reply mechanism. Rather than endless rounds of click-submit-reply, punctuated by the occasional server request for missing data, RIAs combine desktop-like interactivity with a rich media aesthetic. Done right, RIAs blend the benefits of instant Web access to centralized data with a user experience that is both easy to use and cool to watch. This presentation by Senior Research Analyst Howard Kiewe was given at AJAXWorld West and explores how to evaluate the RIA business case and make a persuasive case for RIA development.
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www.infotech.com Making the Business Case for RIAs 1
Making the Business Case for RIAs(in the SME Market)
AJAXWorld West 2008 // Howard Kiewe
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Topics1. About Info-Tech Research Group2. What’s an SME?3. Rational Persuasion: The Business Case4. Emotional Persuasion:
Social Proof, Reciprocity, & Emotional motivation 5. Recommendations6. Questions7. References
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About Info-Tech
Howard Kiewe is a senior research analyst in application development. Previously he provided user research, UX design, and UI development services to leading companies.
Info-Tech Research Group, established in 1997, provides IT research and advice to over 23,000 clients globally, mostly mid market firms in the US.
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What’s a Small to Medium Sized Enterprise (SME)?
< 1000 employees
< 200 IT employees
Business case is similar to larger firms, but usually less money to spend
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Persuasion: The Rational and Emotional Elements
Rational Arguments:Cerebral Cortex
Emotional Appeal:Hypothalamus, Amygdala, etc.
RIAs represent a significant change,so they require significant persuasion
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Include UX Engineering in the Business CaseAJAX, Flex, etc. provide the tools to create a rich UXHowever, the UX must still be researched, designed, and testedE.g. Have you ever used a GUI that made you long for a CLI?RIA with a poor UX will not delivered the promised ROI
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Rational Persuasion: The Business Case
Increasing conversionsIncreasing upsellOffering a better UX than the competition
Reducing contact center costsEnhancing employee productivity
Making money by:
Saving money by:
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Increasing Conversions
The Business Case, 1 of 5
e.g. Single screen checkout & dynamic error checking
$1:3.80$1:2.20ROI
$114,000 $66,000 -Profit
$594,000 $546,000 $480,000 Net income
($30,000)($30,000)Development Costs
2.60%2.40%2%Conversion rate (% of visitors who buy)
$100,000 $100,000 100,000Annual site visits
$240 $240 $240 Unit margin $
20%20%20%Unit margin %
$1,200 $1,200 $1,200 Average sale
30%20%-Projected conversion improvement
Best CaseConservative
Improved SitePresent Site
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Increasing Upsell
The Business Case, 2 of 5
e.g. Options & customizations
$1:4.33$1:3.00ROI
$130,000 $90,000 Profit
$610,000 $570,000 $480,000 Net income
($30,000)($30,000)-Development costs
2%2%2%Conversion rate (% of visitors who buy)
100,000100,000100,000Annual site visits
$320 $300 $240 Unit margin $
20%20%20%Unit margin %
$1,600$1,500$1,200Average sale
33%25%Projected increased value per sale
Best CaseConservative
Improved SitePresent Site
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Reducing Contact Center Costs
The Business Case, 3 of 5
e.g. Less telephone order taking
$1:4.60$1:1.80ROI
$138,000 $54,000 -Net savings
($30,000)($30,000)Development Costs
$168,000 $84,000 $0 Savings
$672,000 $756,000 $840,000 Costs per year
$14 $14 $14 Cost per call
48,00054,00060,000Calls per year
-20%-10%-Projected call reduction
Best CaseConservative
Improved SitePresent Site
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Enhancing Employee Productivity
The Business Case, 4 of 5
e.g. Reducing transaction costs
2.111.33ROI
$63,333 $40,000 -Net savings
($30,000)($30,000)-Development Costs
$93,333 $70,000 -Savings
$140,000 $163,333 $233,333 Costs per year
350,000350,000350,000Transactions per year
$0.40 $0.47 $0.67 Cost per transaction (at $20 per hour)
7284120Transaction time (seconds)
-40%-30% *-Projected reduction in transaction time
Best CaseConservative
Improved SitePresent Site
* Based on test performed by Nitobi Inc., see http://www.massivetechshow.com/resources/ajax.asp
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Offering a Better UX than the Competition
The Business Case, 5 of 5
http://www.asiahotels.com/hotelinfo/Cosmopolitan_Hotel_Hong_Kong/http://reservations.ihotelier.com/onescreen.cfm?hotelID=2054
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Emotional Persuasion
Emotional Appeal:Hypothalamus, Amygdala, etc.
Provide social proof
Tap the reciprocity normTap emotional motivation
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Provide Social Proof
Emotional Persuasion, 1 of 6
Social Proof: When we are in ambiguous situations, we tend to copy the behavior of those around us.This short cut usually helps us make good decisions quickly.
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Provide Social Proof
Emotional Persuasion, 2 of 6
e.g. Point to peers or competitors; refer to authorities
“Brick-and-mortar based small enterprises need a dynamic Web presence to look credible and generate excitement about their offerings.”Info~Tech Research Group
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Do Them a Favor: Tap the Reciprocity Norm
Emotional Persuasion, 3 of 6
“Pay every debt, as if God wrote the bill.” Ralph Waldo Emerson
Reciprocity Norm. Receiving anything positive requires that you reciprocate. Reciprocity’s powerful effect is well documented by social psychologists.
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Do Them a Favor: Tap the Reciprocity Norm
Emotional Persuasion, 4 of 6
What isnot in your job description or contracteasy for you to do for themhard for them to do for themselves?
These make excellent favors!
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Tap Their Emotional Motivation
Emotional Persuasion, 5 of 6
What’s a more powerful motivator?
Gaining a benefit or Avoiding a loss
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Avoiding loss!
Persuasion: The Emotional Elements 3 of
Emphasize what could happen:Loss of securityLoss of revenueLoss of opportunityEmbarrassment
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Summary of Key ApproachesRational Persuasion: The Business Case
1. Increasing conversions 2. Increasing upsell3. Offing a better UX than the competition4. Reducing contact center costs5. Enhancing employee productivity
Emotional Persuasion
6. Provide social proof7. Tap the reciprocity norm8. Tap emotional motivation
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Recommendations
Evaluate before and after with Web analytics and usability testsPlan to invest in UX engineeringPlan for measurementConsider impacts on all channelsDevelop the business caseApply principles of social proof, reciprocity, and emotional motivation
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References
Cialdini, R. B. (1998). Influence: The Psychology of Persuasion. New York: Quill. An excellent work on social influence by one of the field's leading researchers. A rare combination of thorough scholarship and engaging writing style.
Kiewe, H. (2006). The UXE White Paper: User Experience Engineering Essentials [Electronic Version]. user-experience.info. Retrieved September 15, 2006 from http://www.user-experience.info/uxe. User experience engineering (UXE) is a structured research, design, and evaluation process whose goal is to make user interactions with a product or service easy, efficient, and enjoyable. This white paper summarizes the UXE process and evaluates its business case.
Kiewe, H. (In Press). Rich Internet Applications: What’s the Business Case? [Electronic Version]. Info-Tech Research Group, http://www.infotech.com. Evaluates the business case for RIAs and provides tools to create your own.
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Questions?
Howard KieweSenior Research Analyst Application Development & OutsourcingInfo-Tech Research Group 43 Front Street East, Toronto On.Canada M5E 1B3
North America: 1 (888) 670-8889 x3043International: +1 (519) 936-2652 x3043Cell: +1 (416) 829-8683
hkiewe [at] infotech [dot] com
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