Return on Investment (ROI)

Your constantly-updated definition of Return on Investment (ROI) and collection of topical content and literature
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What is Return on Investment (ROI)?

Return on investment (ROI) is a financial metric used to analyze the efficiency of an investment. ROI = profit from an investment / investment cost, and is usually expressed as a percentage. For instance, if you invest $1,000 in creating a website and it increases your sales by $1,500, then the ROI = (1,500 - 1,000)/1,000 = 50%.

ROI is used more broadly in design to describe the effect of an investment in a design-related area—e.g., investments in design, usability, or user research. When used in this way, ROI cannot be calculated as simply as in finance, because the investment is not always measured in the same unit as the benefit, and the effect is not always direct. In design projects, an investment is often money or time, but the benefit could be increased user satisfaction, improved user efficiency, or the reduction of user error—all of which will probably lead to an indirect increase in profits.

While calculating the ROI of design efforts is difficult, some organizations have attempted to do so by analyzing the net effect that a focus on design has on the overall profitability of a company. The Design Management Institute, for instance, has found that design-centric companies (such as Apple, Coca-Cola, and IBM) outperformed the S&P index (which indicates the industry’s average performance) by 228% over a 10-year period from 2003 to 2013. Thus, having a solid grasp of ROI and an appreciation for how they can translate the dynamics involved to the user experience will give designers a powerful advantage. With an enhanced scope when determining what features a design needs versus those which may be superfluous, a designer can concentrate on how the value of convenience the user will place on it will reflect the financial health of the work after rollout.

Literature on Return on Investment (ROI)

Here’s the entire ֱ literature on Return on Investment (ROI) by the Interaction Design Foundation, collated in one place:

Learn more about Return on Investment (ROI)

Take a deep dive into Return on Investment (ROI) with our course Design Thinking: The Beginner’s Guide .

Some of the world’s leading brands, such as Apple, Google, Samsung, and General Electric, have rapidly adopted the design thinking approach, and design thinking is being taught at leading universities around the world, including Stanford d.school, Harvard, and MIT. What is design thinking, and why is it so popular and effective?

The overall goal of this design thinking course is to help you design better products, services, processes, strategies, spaces, architecture, and experiences. Design thinking helps you and your team develop practical and innovative solutions for your problems. It is a human-focused, prototype-driven, innovative design process. Through this course, you will develop a solid understanding of the fundamental phases and methods in design thinking, and you will learn how to implement your newfound knowledge in your professional work life. We will give you lots of examples; we will go into case studies, videos, and other useful material, all of which will help you dive further into design thinking.

This course contains a series of practical exercises that build on one another to create a complete design thinking project. The exercises are optional, but you’ll get invaluable hands-on experience with the methods you encounter in this course if you complete them, because they will teach you to take your first steps as a design thinking practitioner. What’s equally important is you can use your work as a case study for your portfolio to showcase your abilities to future employers! A portfolio is essential if you want to step into or move ahead in a career in the world of human-centered design.

Design thinking methods and strategies belong at every level of the design process. However, design thinking is not an exclusive property of designers—all great innovators in literature, art, music, science, engineering, and business have practiced it. What’s special about design thinking is that designers and designers’ work processes can help us systematically extract, teach, learn, and apply these human-centered techniques in solving problems in a creative and innovative way—in our designs, in our businesses, in our countries, and in our lives.

That means that design thinking is not only for designers but also for creative employees, freelancers, and business leaders. It’s for anyone who seeks to infuse an approach to innovation that is powerful, effective and broadly accessible, one that can be integrated into every level of an organization, product, or service so as to drive new alternatives for businesses and society.

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