Making the Business Case for RIAs                           (in the SME Market)                   AJAXWorld West 2008 // H...
Topics     1.    About Info-Tech Research Group     2.    What’s an SME?     3.    Rational Persuasion: The Business Case ...
About Info-Tech        Info-Tech Research Group, established in 1997, provides IT        research and advice to over 23,00...
What’s a Small to Medium Sized Enterprise (SME)?        < 1000 employees        < 200 IT employees        Business case is...
Persuasion: The Rational and Emotional Elements                   Rational Arguments:                       Cerebral Corte...
Include UX Engineering in the Business Case       AJAX, Flex, etc. provide the tools to create a       rich UX       Howev...
Rational Persuasion: The Business Case     Making money by:         Increasing conversions         Increasing upsell      ...
The Business Case, 1 of 5  Increasing Conversions   e.g. Single screen checkout & dynamic error checking                  ...
The Business Case, 2 of 5  Increasing Upsell  e.g. Options & customizations                                               ...
The Business Case, 3 of 5  Reducing Contact Center Costs   e.g. Less telephone order taking                               ...
The Business Case, 4 of 5  Enhancing Employee Productivity   e.g. Reducing transaction costs                              ...
The Business Case, 5 of 5  Offering a Better UX than the Competition                                                      ...
Emotional Persuasion      Provide social proof      Tap the reciprocity      norm      Tap emotional      motivation      ...
Emotional Persuasion, 1 of 6  Provide Social Proof  Social Proof: When we are in  ambiguous situations, we tend to  copy t...
Emotional Persuasion, 2 of 6  Provide Social Proof   e.g. Point to peers or competitors; refer to authorities             ...
Emotional Persuasion, 3 of 6  Do Them a Favor: Tap the Reciprocity Norm   “Pay every debt, as if God wrote   the bill.” Ra...
Emotional Persuasion, 4 of 6  Do Them a Favor: Tap the Reciprocity Norm  What is    not in your job description or    cont...
Emotional Persuasion, 5 of 6  Tap Their Emotional Motivation        What’s a more powerful motivator?        Gaining a ben...
Persuasion: The Emotional Elements 3 of  Avoiding loss!        Emphasize what could         happen:          Loss of secur...
Summary of Key Approaches     Rational Persuasion: The Business Case     1.    Increasing conversions     2.    Increasing...
Recommendations         Evaluate before and after with Web analytics and usability tests         Plan to invest in UX engi...
References         Cialdini, R. B. (1998). Influence: The Psychology of Persuasion. New York: Quill. An excellent work on ...
Questions?                                       Howard Kiewe                                       Senior Research Analys...
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Rich Internet Applications: What\'s the Business Case? (Howard Kiewe at AJAXWorld West)

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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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Rich Internet Applications: What\'s the Business Case? (Howard Kiewe at AJAXWorld West)

  1. 1. Making the Business Case for RIAs (in the SME Market) AJAXWorld West 2008 // Howard Kiewewww.infotech.com Making the Business Case for RIAs 1
  2. 2. Topics 1. About Info-Tech Research Group 2. What’s an SME? 3. Rational Persuasion: The Business Case 4. Emotional Persuasion: Social Proof, Reciprocity, & Emotional motivation 5. Recommendations 6. Questions 7. Referenceswww.infotech.com Making the Business Case for RIAs 2
  3. 3. About Info-Tech 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. Howard Kiewe is a senior research analyst in application development. Previously he provided user research, UX design, and UI development services to leading companies.www.infotech.com Making the Business Case for RIAs 3
  4. 4. 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 spendwww.infotech.com Making the Business Case for RIAs 4
  5. 5. Persuasion: The Rational and Emotional Elements Rational Arguments: Cerebral Cortex RIAs represent a significant change,so they require significant persuasion Emotional Appeal: Hypothalamus, Amygdala, etc.www.infotech.com Making the Business Case for RIAs 5
  6. 6. Include UX Engineering in the Business Case AJAX, Flex, etc. provide the tools to create a rich UX However, the UX must still be researched, designed, and tested E.g. Have you ever used a GUI that made you long for a CLI? RIA with a poor UX will not delivered the promised ROIwww.infotech.com Making the Business Case for RIAs 6
  7. 7. Rational Persuasion: The Business Case Making money by: Increasing conversions Increasing upsell Offering a better UX than the competition Saving money by: Reducing contact center costs Enhancing employee productivitywww.infotech.com Making the Business Case for RIAs 7
  8. 8. The Business Case, 1 of 5 Increasing Conversions e.g. Single screen checkout & dynamic error checking Present Site Improved Site Conservative Best Case Projected conversion improvement - 20% 30% Average sale $1,200 $1,200 $1,200 Unit margin % 20% 20% 20% Unit margin $ $240 $240 $240 Annual site visits 100,000 $100,000 $100,000 Conversion rate (% of visitors who buy) 2% 2.40% 2.60% Development Costs ($30,000) ($30,000) Net income $480,000 $546,000 $594,000 Profit - $66,000 $114,000 ROI $1:2.20 $1:3.80www.infotech.com Making the Business Case for RIAs 8
  9. 9. The Business Case, 2 of 5 Increasing Upsell e.g. Options & customizations Present Site Improved Site Conservative Best Case Projected increased value per sale 25% 33% Average sale $1,200 $1,500 $1,600 Unit margin % 20% 20% 20% Unit margin $ $240 $300 $320 Annual site visits 100,000 100,000 100,000 Conversion rate (% of visitors who buy) 2% 2% 2% Development costs - ($30,000) ($30,000) Net income $480,000 $570,000 $610,000 Profit $90,000 $130,000 ROI $1:3.00 $1:4.33www.infotech.com Making the Business Case for RIAs 9
  10. 10. The Business Case, 3 of 5 Reducing Contact Center Costs e.g. Less telephone order taking Present Improved Site Site Conservative Best Case Projected call reduction - -10% -20% Calls per year 60,000 54,000 48,000 Cost per call $14 $14 $14 Costs per year $840,000 $756,000 $672,000 Savings $0 $84,000 $168,000 Development Costs ($30,000) ($30,000) Net savings - $54,000 $138,000 ROI $1:1.80 $1:4.60www.infotech.com Making the Business Case for RIAs 10
  11. 11. The Business Case, 4 of 5 Enhancing Employee Productivity e.g. Reducing transaction costs Present Site Improved Site Conservative Best Case Projected reduction in transaction time - -30% * -40% Transaction time (seconds) 120 84 72 Cost per transaction (at $20 per hour) $0.67 $0.47 $0.40 Transactions per year 350,000 350,000 350,000 Costs per year $233,333 $163,333 $140,000 Savings - $70,000 $93,333 Development Costs - ($30,000) ($30,000) Net savings - $40,000 $63,333 ROI 1.33 2.11 * Based on test performed by Nitobi Inc., see http://www.massivetechshow.com/resources/ajax.aspwww.infotech.com Making the Business Case for RIAs 11
  12. 12. The Business Case, 5 of 5 Offering a Better UX than the Competition http://reservations.ihotelier.com/onescreen.cfm?hotelID=2054 http://www.asiahotels.com/hotelinfo/Cosmopolitan_Hotel_Hong_Kong/www.infotech.com Making the Business Case for RIAs 12
  13. 13. Emotional Persuasion Provide social proof Tap the reciprocity norm Tap emotional motivation Emotional Appeal: Hypothalamus, Amygdala, etc.www.infotech.com Making the Business Case for RIAs 13
  14. 14. Emotional Persuasion, 1 of 6 Provide Social Proof 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.www.infotech.com Making the Business Case for RIAs 14
  15. 15. Emotional Persuasion, 2 of 6 Provide Social Proof 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 Groupwww.infotech.com Making the Business Case for RIAs 15
  16. 16. Emotional Persuasion, 3 of 6 Do Them a Favor: Tap the Reciprocity Norm “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.www.infotech.com Making the Business Case for RIAs 16
  17. 17. Emotional Persuasion, 4 of 6 Do Them a Favor: Tap the Reciprocity Norm What is not in your job description or contract easy for you to do for them hard for them to do for themselves? These make excellent favors!www.infotech.com Making the Business Case for RIAs 17
  18. 18. Emotional Persuasion, 5 of 6 Tap Their Emotional Motivation What’s a more powerful motivator? Gaining a benefit or Avoiding a losswww.infotech.com Making the Business Case for RIAs 18
  19. 19. Persuasion: The Emotional Elements 3 of Avoiding loss! Emphasize what could happen: Loss of security Loss of revenue Loss of opportunity Embarrassmentwww.infotech.com Making the Business Case for RIAs 19
  20. 20. Summary of Key Approaches Rational Persuasion: The Business Case 1. Increasing conversions 2. Increasing upsell 3. Offing a better UX than the competition 4. Reducing contact center costs 5. Enhancing employee productivity Emotional Persuasion 6. Provide social proof 7. Tap the reciprocity norm 8. Tap emotional motivationwww.infotech.com Making the Business Case for RIAs 20
  21. 21. Recommendations Evaluate before and after with Web analytics and usability tests Plan to invest in UX engineering Plan for measurement Consider impacts on all channels Develop the business case Apply principles of social proof, reciprocity, and emotional motivationwww.infotech.com Making the Business Case for RIAs 21
  22. 22. References Cialdini, R. B. (1998). Influence: The Psychology of Persuasion. New York: Quill. An excellent work on social influence by one of the fields 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.www.infotech.com Making the Business Case for RIAs 22
  23. 23. Questions? Howard Kiewe Senior Research Analyst Application Development & Outsourcing Info-Tech Research Group 43 Front Street East, Toronto On. Canada M5E 1B3 North America: 1 (888) 670-8889 x3043 International: +1 (519) 936-2652 x3043 Cell: +1 (416) 829-8683 hkiewe [at] infotech [dot] comwww.infotech.com Making the Business Case for RIAs 23

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