The information architecture community thinks business leaders want proof of ROI. But they don't. Firstly, the IA doesn't use the term correctly. Secondly, the business world is looking for trustworthy partners, not MBAs.

1. ROI and the business value of IA
Eric Reiss
10th Annual IA Summit
March 20, 2009
Memphis, Tennessee

2. “Nowadays, people know
the price of everything
and the value of nothing.”
Oscar Wilde

3. Does anyone here doubt the value of IA ?

4. What do we do ?
Here are the conclusions of 400 IAs

5. Information architecture Model ver. 0.01
(synthesis of ~900 terms, 8 April 2000)
Information
Technology Standards
•Navigate •Design
•Search •Implement
•Browse •Structure
•Evaluate •Tag/index
IA Goals
•Meet user-needs
User •Mediation
Information
•Usability Architect
•Create •Added value •Analysis
•Own •Model
Policies •Edit •Classify Disciplines
•Manage •Evaluate
Information

6. Clients know what they want
But we know what they need

7. Clients know what they want
But we know what they need
This is the fatal disconnect

8. I want a better website.

9. Accessibility Mental models
Personas Searchability
Knowledge Usability
management
I want a better website.
Sensemaking Findability
ScenariaExperience design
Information architecture Storytelling
Content management
Thesauri
User-centered design

10. I want a better website.
Information architecture

11. „Es hört jeder doch nur,
was er versteht.“
Goethe

12. „Es hört jeder doch nur,
was er versteht.“
Goethe

13. „Es hört jeder doch nur,
“He hears only that
was erhe understands”
which versteht.“
Goethe

14. “We believe [IA] is important. But we don't
have scientific proof. This places us in
the role of quasi-religious missionaries,
desperately striving to convince the masses
of the righteousness of our vision.”
Peter Morville

16. So, we invent
models and
methods...

18. We collect
thrilling
statistics...
And
worship
ROI.

19. Right tool
Wrong use

20. R eturn OI n nvestment
“If you hire me, you’ll probably get your money back.”

21. We talk about it.
But do we use the term correctly?

23. Benefits - Costs
ROI =
Costs
“The gains outweighed the costs.”

24. 500 – 200
1.5 =
200
“It provided a 150% return.”

25. Net income
ROI =
Book value of assets

26. “Because the numerator (net income) is
an unreliable corporate performance
measurement, the outcome of the formula
ROI must also be unreliable to determine
success or corporate value.”
www.valuebasedmanagement.net

27. Net income + interest (1 - tax rate)
ROI =
Book value of assets
Source: Steven M. Bragg, Business Ratios and Formulas

28. “Return on Investment is based on historic
data. It is a backward-looking metric that
yields no insights into how to improve
business results in the future.”
www.maxi-pedia.com

29. “In terms of gross averages, I estimate
that spending about 10% of a project's
budget on usability activities doubles
usability. ”
Jakob Nielsen

31. Cost of investment
PP =
Cash flow per year
“It paid for itself in three months.”

32. OPEX + CAPEX
TCO =
Duration of project
“It costs us USD 100 per month.”

33. “He hears only that
which he understands”
Goethe

34. “If they had wanted an MBA
they would have hired an MBA.”
Dan Saffer

36. Cost of frustration
Increased expenses
Lost profits
Reduced productivity
Wasted development resources
Source: Jared Spool

39. Cost of frustration for Amtrak
Average reservation $ 220
Reservations per month x 40,000
Potential income per month $ 8,800,000
Incomplete reservations 75%
Potential loss per month $ 6,600,000
Recapture through usability 20%
Potential gain per month $ 1,320,000
Potential gain per year $ 15,840,000
Source: Jared Spool

40. “I want to book a trip.”

41. “I can’t figure this out.”

42. “I guess I’ll say home.”

43. USD 16,000,000 per year...?
0
a l : 80
Verb : 480
Math

44. “Why did you send me this article?
You guys are too smart to actually
believe this bullshit.”
E-mail from a client

45. We are not alone ...

46. Adlib Software ROI calculation for
the life-science industry (eCTD)

47. “ROI doesn’t enter into this calculation.
eCTD is not a nice-to-have, it is a
NEED-to-have. And the submissions –
how do you count these? Per product?
Per country? New submission? Repeat
submission? This is a vendor who really
doesn’t understand our business.”
A regulatory affairs officer

48. Cost of not finding information
Number of Employees
x
Average salary
x
Average number of pages and
sites visited per day per person
x
Several seconds of confusion each
visit due to bad IA
The cost of not implementing a
cohesive information architecture
Source: Jakob Nielsen / Peter Morville

49. Cost of poor usability
Number of users
x
Average salary
x
Average number of application
visits per day per person
x
Number of seconds of confusion each
visit due to poor usability
The cost of ignoring usability
in on-line applications
Source: Nielsen / Morville / Reiss (ed.)

52. Cost of “Chip Dankort”
Number of supermarket checkout lines 7
x
Average salary 2 Dkr/min
x
Average number transactions each day 1890
x
Number of seconds waiting for chip 5
The cost of new 315 Dkr
“Chip Dankort”
Source: Eric Reiss

53. 315 Dkr = 2.6 hours!

54. “Sometimes a cracker is worth
more than a handful of crumbs.”
Me
(in reference to granularity on the web)

55. ROI ≠ sale

57. Doing the math for Sterling
Loss EUR 200,000 per month
Cost EUR 17,181
PP 2.57 days

58. “Price is what you pay.
Value is what you get.”
Warren Buffett

59. Perceived benefit
Value =
Price
“I think it’s worth the price.”

60. Value ≠ ROI

61. ROI ≠ sale

62. Value ≠ sale

63. Every service represents “value”
This is a given - and “givens” are not competitive positions

64. We are selling a very strange service…

65. ”Are these guys crazy ?”
”Let us move your stuff around and
we’ll make it more valuable.”

69. Value is subjective
Value is emotional

72. Have you hugged your sitemap today?
Home page
Search Contact
About us Sales
Products
History Dealer addresses
Red products
Mission
Green products
Data sheet
Blue products

73. “What’s good for
General Motors is
good for the country”
Alfred P. Sloan

74. So, it’s not just about the value of information architecture.
Is it about the potential value of information?

75. Action
Wisdom
Understanding
Knowledge
Information
Data

77. “There are two levers to
set a man in motion:
fear and self-interest.”
Napoleon

78. If you don’t learn faster than your competition,
you will ultimately fail.
Information Architecture gives you a
sustainable competitive advantage.

79. In declining markets, only
the popular companies
survive.
IA is the key to providing
superior online service.

80. OK. It’s not only about the potential value of information.
So, what is it?

81. “Appeal to reason and you
may have no appeal at all.”
Harry Beckwith

82. Reassurance
Comfort =
Worry
“These folks will keep me out of hot water.”
“These folks are my friends.”

83. Source: neatorama.cachefly.net

84. Some simple words of wisdom
Make your clients feel comfortable.
Make your clients look smart.
Don’t sell to focus groups.
Sell to the guy on the other side of the table.
Don’t sell a service.
Sell a relationship.
Be professional.
More importantly, be personable.
Source: Harry Beckwith / Eric Reiss

85. So what is an information architect ?
An instrument of social change!

86. communication

92. Our
time
has
come

93. Thanks!

94. Eric Reiss can (usually) be found at:
The FatDUX Group ApS
Strandøre 15
2100 Copenhagen
Denmark
Office: (+45) 39 29 67 77
Mobil: (+45) 20 12 88 44
Twitter: elreiss
info@fatdux.com
www.fatdux.com