Catalyst Resources Blog

I ordered a coffee and a scone at Starbuck's the other day. As I was reading the latest dismal financial news, the barista said "That will be $5.27 please." I paid but then as I sat down, I started to think about how it is that Starbuck's can continue to charge so much for a cup of coffee, and a small pastry. It struck me as even more interesting that Starbuck's doesn't even advertise - no TV ads, no salesman. Then I realized that Starbuck's economic value isn't about the cup of coffee as a commodity, a good or even a service. Starbucks can charge a premium price because the economic value is an experience.

You can view coffee as several kinds of products.

• As a raw commodity, coffee beans are worth maybe 2 cents/cup.
• If you grind up the beans and package them as a good for sale in a store, they are worth, say 20 cents/cup.
• If you take the same coffee and brew it for a customer in a vending machine or serve it at a coffee shop, it can sell for $1/cup. Provide the service of frothing the milk and you can charge an extra 50 cents!
• Now surround that brewing process with the environment of a Starbucks, Peets or Caribou, where you can read the paper, check your Blackberry, or chat with friends, and that experience enables you to charge $3+/cup.

This progression from value based on commodity to value based on user experience is a fundamental process in today's economy. Commodities are typically thought as raw materials - things like corn or iron. Use these raw materials to make a product and you end up with goods such as cornflakes or automobiles. But as more competitors arise in the market, goods tend to become commodities. When that happens, it no longer matters who makes them. All that people really care about is price per feature. So companies try to differentiate and beat each other up by offering more features for lesser and lesser prices. This relatively destructive approach is especially common in economically turbulent times like now.

Services delivered through software are being commoditized just like goods. The classic example is long-distance or teleconferencing services where they are sold almost exclusively on the basis of price (although see InterCall). Software as a Service (SaaS) is another example, where many companies try to compete on price once competitors enter their market space.

But there is another way. The value chain is to move from a goods and services economy, to an experience economy, where user experience is the real economic value in any offering. The easiest-to-understand example of this today is the iPhone. There is no great technological feature breakthrough in the iPhone. It is completely a commodity cell phone when you look at it from a technical perspective. What sells the iPhone and keeps it at a price premium without viable competition is the user experience.

When it comes to SaaS, there can needs to be the same progression of economic value from a service with a set of features, to a service with an innovative and compelling user experience. The features of the software are not the only goal (those can become commodities). The application needs to be designed around the user experience to provide a sustainable value proposition. This requires an understanding of agile application design, high value scenarios, usability testing, user validation, addressing the full customer lifecycle and innovative use of Rich Internet Application technologies.

If you’re in the business of selling services via software, you are inevitably looking for ways to clearly differentiate your product from the competition. 

One way is to offer more features and greater functionality - bigger online storage, Facebook integration, customer detail fields, spell checkers, etc. 

To be sure, the functionality that an application provides to users is important for differentiation. But it is the way in which that application provides the functionality, that truly gives a piece of software the edge. User experience is the key differentiator relative to the competition.

Usabiilty - how easy is it to accomplish a prescribed task, is one essential component of user experience. An application that is difficult to use will simply not be used.  An application that does not make it easy to undo mistakes will be frustrating to use. It won’t matter how technically superior your software is or what functionality it provides, if the usability aspect is low, user productivity and usage will be low.

Consistency and predictability are also fundamental principals of user experience design.  If the user has learned that clicking and dragging the title bar moves a window, then you can show them software they’ve never use before and they can predict that the way to move a window is to click and drag it.  The user knows what will happen when they do something -  even for the first time. It gives them a feeling of mastery and control, which is critically important to product use and loyalty.

Other components contributing to user experience include conceptual models, visual design, workflow, perceived performance, and UI including RIAs. Each needs to be addressed and each can be addressed with innovative and differentiated approaches.

The impact of user experience on productivity and user engagement, as well as emotion, loyalty and advocacy,  applies to enterprise and work group software as much as it does to consumer applications. We’ve all experienced a wide range of reactions to the software we’ve used (on-premise, web and SaaS). At one end of the spectrum is a positive, empowering response when something is engaging and “just works.” At the other end is frustration. It is this user experience that differentiates software we “love to use” from software we avoid; software that enhances productivity from software that wastes our time.

User experience can act as one of the most powerful differentiators between feature-competitive software products. The right conceptual models, usability, visual design, simplicity, perceived performance, and the feeling of self-service/control all combine to provide easier, faster and more rewarding access to the functions of that software.

Back in 2005,  I wrote an article for SIIA.net about using meta-data driven design, rather than code changes, to create highly customizable SaaS applications.  Since customization continues to be a hot topic in the SaaS industry and often a stumbling block to adoption for many types of businesses, I wanted to briefly review how a SaaS can be designed to allow for easy customization and configuration.

At the most basic level,  for a SaaS to be highly scalable and efficient, everyone starts with a single instance of the application. This is the concept of multi-tenant-efficiency. Client data is stored in a shared database, but authorization and security policies ensure that each client’s data is kept separate from that of other clients.

To customize a SaaS application, you don’t modify the application in the traditional sense. No one fiddles around in the database, modifies schema or creates custom code (hoping nothing breaks), Instead each client uses meta-data - “data about other data” -  to configure the way the application works and how it provides a unique user experience and feature set for each client.

Customization/configuration using meta-data can run the gamut from from terminology/lexicon and branding/layout, to individualized workflows, to data model extensions, to integration from other systems, to user provisioning and even to business logic.

The challenge for the SaaS architect is to design and define the requirements for customization/configurability early in the definition cycle and then design easily-configured UI components that can manipulated in a self-service manner by non-technical clients.

Needless to say, if you are developing an enterprise SaaS solution, furnishing this type of configurability, customization, and control is a big win for your clients and your sales team.

It's an old cliche that technology innovation thrives in times of recession. But we think this will actually be true for user experience and application design in 2009. We expect to see both incremental enhancements as businesses re-focus on the bottom line, as well as truly mind-boggling innovation.

So for this post I want to offer some predictions where the user experience market is headed. As with our 2008 retrospective, I've asked several Catalyst Resources staff members to contribute their thoughts. We hope it is a provocative and inspiring read.

Brad - Social media architect

• Mobile and SaaS - There will be a dramatic intersection between mobile apps and SaaS/Cloud Computing. It started with the iPhone, but it will accelerate in 2009 as more mobile devices (especially Android-based and perhaps Palm Nova-based) adopt touch interfaces, rich client software and powerful internal processors, combined with internet-delivered services. A good example of this accelerating trend is the just-announced Cisco WebEx for iPhone.
• Location Intelligence - Location technology becomes a commodity (i.e. GPS/geolocation is essentially universal in handheld devices and browsers) and is incorporated as a standard component of SaaS applications. Expect to see everything from geo-referenced mapping, to data mashups to, business intelligence using spatial data processing.
• Browser reigns king - Browser based web application performance (i.e. AJAX typically with WebKit rendering) gets as fast as desktop performance. Google's Chrome, Apple's SproutCore, FireFox's Spidermonkey and projects like IBM's Blue Spruce all point the way to high performance that is also open source, requires no installs, and is search engine friendly. This will definitely challenge Flex and Silverlight.
• Voice interfaces - Voice recognition will become more prevalent and accepted as a mainstream UI. Google Mobile is just the start.
• Health care apps - Health applications begin to take off but because they are so complex and intertwined, they require a specialized breed of enterprise user experience design. The move to online will be incremental pieces, rather than comprehensive application design. But if the UI is built as components, a full shift to online will be quick to implement later on down the road.
• SaaS partnerships - SaaS infrastructure vendors will form more strategic partnerships with firms that can supplement their services through usability and user experience design, visual design, social networking, regulatory consulting, and Rich Internet Application coding.
• Regulatory compliance - Post 2008 financial meltdown, there will be an increased focus on regulatory-compliance and governance. Application designers will need to offer componetized UI that specifically supports regulatory compliance through standardization across applications. SaaS will be particularly attractive for this reason.
• Risk mitigation - Companies will place more emphasis on identifying the levels of risk associated with application design and SaaS services. To mitigate risk, buyers will demand that they see not just design comps and proofs-of-concepts but also working examples of enterprise-level work before they make final decisions.
• Flexible displays - Long shot prediction: Affordable, flexible displays with E-ink will begin coming to market and change the way we interact with smartphones, notebook computers, e-newspapers and electronic documents.

Gilroy - Ux designer

• SaaS and Cloud Computing - The economic downturn will encourage more businesses to explore the cloud computing model, proliferating SaaS and cloud devices (think less capital, re-usable source data, instantaneous distribution, remote collaboration, & global access). Efficient SaaS design will help companies and consumers save money and/or work more efficiently.
• Multi-touch - A combination of Microsoft's surface computing and Sony's flexible TFT OLED displays will put multi-touch interaction on all manner of devices and form factors.

Lulu - UI designer

• Touch interfaces -Touch is going to be the next big thing in interaction design and not limited to phones and kiosks. It will move to the forefront as companies look to develop one code base that can be pushed out to multiple device types.
• Mobile app proliferation - Since there are more cellphones and smartphones being sold than laptops and desktop computers, expect to see a lot more mobile apps. All of the signficant smartphone vendors from Apple (App Store currently with over 300 million app downloads), to Google (Android Market), to Rim (Blackberry Application Center) to Microsoft (Windows Mobile Applications) will provide mobile apps through their own stores. There will be a tremendous opportunity to design and develop applications for the enterprise, workgroups and individual users.

Regis - Interaction architect

• RIAs and new forms of input - RIA technologies will continue maturing to truly allow desktop like interactions for online applications. This will in turn support the migration of even more traditional software to the SaaS model. User experience designers will have to keep up with that trend and free themselves from the old metaphors they had to think through for the past decades. They will have to integrate new interaction models into their toolboxes and make sure, more than ever, that gesture-based interactions, 3D metaphors, motion sensing and other UX innovations do not shatter the fragile union between users and technology.

Jessica - UI architect

• Android - Not only is the mobile device and application market going to expand, but Android, Google's open source platform for mobile development will give Apple's platform a serious run for its money, though Apple will remain dominant for the foreseeable future.
• SaaS and more SaaS - Because of the economic situation we'll see a higher number of SaaS business models because companies have less capital they're willing to invest up front. While SaaS isn't the holy grail to all business challenges, implementing it in key areas will help curb unnecessary expenses. Consequently new and more involved SaaS models will emerge as the dominant form of software licensing. This will mean more interesting, and complex opportunities for SaaS application design firms.

Paul - Managing partner

• Mobile is the trend - The hand-held smartphone will be where people spend more and more time for business and pleasure. It will become the primary information and entertainment device, especially among young users.
• SaaS growth - The economic climate will force enterprises who have been on the fence, to finally embrace some form of SaaS in order to cut costs, be more efficient and deliver business-relevant innovation. Expect this to translate to companies implementing SaaS not just for their core application, but for the entire customer management lifecycle. The SaaS application will offer everything from trial, to sales, to provisioning, to support, to social marketing.
SaaS motivates better design - The demand for scalable and profitable SaaS will provide a substantial boost in innovation for the US technology design area. SaaS designs will be adapted to support all ranges of users including enterprises, small groups and individuals.
• SaaS design as strategic - Customers will continue to view SaaS application design firms as extensions of their internal teams and will increasingly look to them more as one-stop strategic consulting services, rather than just creating a front-end experience.
• RIAs and SaaS - RIA technology will continue to evolve and improve to provide the essential functionality and sophistication necessary to design and deliver enterprise SaaS.
• Business learns from consumer market - There will become a growing blur between what is seen in business and consumer software. It will be driven by business users who expect the same ease-of-use, performance, and functionality that they find in the consumer web applications they use at home.

Some would argue that attempting to predict where a market is headed is a risky proposition. But regardless of the exact accuracy of any of the above predictions, for Catalyst Resources, with over 15 years in user experience design, we can confidently predict that 2009 will be an exciting and innovative time.

If you would like to share your own Ux predictions for 2009, please comment and let us know your thoughts.

When it comes to software, user experience can evolve very rapidly. This time last year, for example, multi-touch was a new term and SaaS was still synonymous with Salesforce.com. Now gesture-based mobile devices are the norm, and most companies that provide services using software, are pursuing a SaaS strategy.

So for today’s post I wanted to look back at 2008 and highlight some of the key developments that rocked the world of what users experience. To help get a broader perspective, I also asked some of Catalyst’ staff (those working over the holidays!) to highlight what they saw as significant trends.

Gilroy - Ux designer

• OCR - It may sound like a simple thing, but the application of optical character recognition software to check scanning on ATM machines was a radical shift in how users interacted with financial institutions. Besides shaving time and adding assurances for the consumer, ATMs using OCR technology enable Day 0 or Day 1 check processing and completely eliminate empty-envelope fraud.
• SRT - Speech recognition technology such as goog-411, another way to give our hands respite from QWERTY keyboards. It’s an automated On-Star.
• Input diversity - from the iphone to the Wii to the Segway, we saw the proliferation of a variety of input mechanisms.

Regis - Interaction architect

• Decline of static HTML - For well over a decade the languages and scripts used to code web pages have severely limited how users could interact with online content. Flash titillated users’ retinas when surfing brochure sites, but HTML tables’ sovereignty was never challenged when one had to check his bank account online. 2008 marked the end of that era, Flex, Silverlight, AJAX and other RIA technologies are blurring the line that used to separate desktop applications from online services. Check boxes surrender to ctrl + click for multiple selection, portlets can be dragged and resized on the fly and data flows more fluidly between clients and servers.

Jessica - UI architect

• iPhone app store - Without a doubt the biggest thing to hit the world of UI was the iPhone 3G and more importantly the opening of the (virtual) doors to the app store. The world of mobile applications has exploded in volume, creativity and diversity and it will only get bigger.  The sales model in which Apple takes a portion of the sales and passes the rest on to the originator has also opened the door to independent software design and development. Growth will be exponential.

Lulu - UI designer

• Designer Tools - Adobe Catalyst (Flex and Air) and Expressions Blend (for WPF and Silverlight) will streamline the designer/developer workflow for building web applications. The process of passing work between designer and developer has always been somewhat challenging. These apps will help make iteration and version control simpler as well as showcasing the interactivity, animation, and functionality of the screens in quick prototypes along the way.

Paul - Managing Partner

• iPhone 3G - The iPhone set a new vision for what user experience can be.
• SaaS gains ground -  Software-as-a-Service gained solid ground (about 80% of our engagements) and users now understand the values of SaaS including addressing the full customer life cycle.
• RIAs for mission critical services - We started seeing RIA implementations of mission and business critical applications. This has been a “step function” in UI and has the demonstrated potential to create much more effective and meaningful experiences that streamline business processes and increase productivity.
• The App Store - The first real venue that promises to make users’ phones go beyond being just phones. It provided a viable channel for sales and distribution of low-cost, tightly-focused software.
• Vista’s failure - The failure of Vista proved that consumers and enterprises were no longer completely dependent on the latest offering from Microsoft. This opened the door significantly to SaaS, as well as devices such as the iPhone, Blackberry Storm, etc.

Although the above list is certainly not exhaustive, it is safe to say, that 2008 was even more significant than previous years in terms of having long-term impact on the “experiences” user will have.  If you can think of some other big Ux trends for 2008, please comment and let us know your thoughts.

In the coming week I will post thoughts on the trends in user experience to keep an eye on throughout 2009.

'Tis the season when companies reflect on their achievements over the past year and begin setting goals for the upcoming year. Catalyst is no different. We've had a great 2008, with many successes, particularly in the SaaS market. We now have a client portfolio of almost 300 enterprise application design projects, with approximately 50 of those being SaaS.

Looking ahead to 2009, there will certainly be new challenges (and opportunities). The full impact of the economic downturn is difficult to assess, but we do know that organizations will be looking to spend wisely on user experience design projects, with a sharp focus on acquiring and keeping customers. We also know that there will continue to be new RIA and user interface design firms springing up (and fading away), all vying for business in a tighter market.

Surviving and thriving in 2009

So for Catalyst, part of our 2009 planning is to identify the type of projects where we bring the highest level of value and clearly differentiate ourselves from potential competition. In other words, where is that sweet spot where the requirements for a client's project perfectly matches our unique experience and skills.

This search for a "sweet spot" is something every service or product company should undertake. It helps to define everything from your BD and marketing, to your capital requirements and hiring.

The sweet spot for Catalyst Resources

In Catalyst's case that perfect sweet spot is when there is a intersection of three client requirements:

1. user experience design of a mission critical business application
2. modular, reusable UI using RIAs, typically applied across a product family or multiple applications
3. a scalable SaaS implementation that is intended to optimize the bottom line

Picture this as a 3D scatter chart, where each axis represents a client requirement. The sweet spot for Catalyst is the point where each client requirement is at the maximum value along each axis.

Of course we work on other RIA and user experience design projects that fall outside of this perfect sweet spot. Any project that requires even one of our particular skills, is a project where we confidently deliver great results. The sweet spot does not necessarily limit the type of projects we undertake. Rather the sweet spot is that point where Catalyst will innovate and execute on a project better than any of our competitors - it is a niche we own.

Other companies have their own sweet spot: Apple's sweet spot, for example might be strong industrial design, integrated software/hardware, and "insanely great" user experience. Costco's sweet spot might be low price, broad selection, helpful staff. In both cases, if a customer needs this intersection of products/services, then it will difficult to find any real competitors.

Finding your own sweet spot

Discovering your company's own sweet spot can require a lot of sober and realistic examination. But the diligence is important, especially in tougher economic times. Look to where you can provide the greatest innovation, the right teams, technological relevance, and a continuing record of delivering bottom line results

I've written a great deal about the intricacies of designing the user experience for an enterprise RIA or SaaS. These applications typically need to handle very large data sets, scale to service thousands of users, and address complex business logic that encompasses many functional elements and scores to hundreds of screens.

While many organizations attempt to develop their SaaS or RIA using their internal IT department, perhaps assisted by a web design or Flash creative firm, the end result will "feel" like it was built by an IT department. It may be functional, may even be visually pleasing, but it will not identify high value tasks, streamline business processes, increase user productivity, build the brand or drive adoption & use. To achieve this level of business value you need a UI engineering team of experts, each with a different focus, distinct skills and tight accountability.

Multi-disciplinary teams

Based on our experience designing over 270 pieces of software, the most successful projects follow a well-formulated process using a small, highly experienced, multi-disciplinary team comprised of an experience architect, experience designer and experience developer. This collaborative team then works with an organization's IT department to smoothly integrate the design with existing infrastructures and back-end systems.

Each of these primary team members needs to be facile in several different domains and take on different roles at different points in the project timeline. Below are brief explanations of some of these roles.

User Experience Architect

• Functional requirements definition - work with the product's stakeholder to define an initial set of key functionalities based on business drivers and value proposition
• User studies & ethnography - observe the actual users and usage environments in order to  refine functional requirements and document the actual user scenarios that will drive the User experience design
• Personas - create personas from the information collected during ethnographic studies. These represent typical users and help the design team keep a clear imagine for whom they are designing
• User validation - involve real users throughout the design process to enable testing the coherence of early mockups and ensure potential usability issues are identified early on
• Business process design - look for ways to organize complex business processes into simple logical structures that can be easily communicated
• UI architecture - design consistent behaviors that apply to the User Interface throughout the application. This enable the user to quickly understand, use and predict how the application will behave
• Conceptual models - define conceptual models that help users to naturally comprehend what they are trying to accomplish with the software, the kind of data they are manipulating, how the data is organized and their goals for interaction

User Experience Designer

• Information design - synthesize user requirements into interaction use cases that define a product's usage from a user's perspective
• User interface design - begin with fast, low-fidelity prototypes and iteratively develop into interactive, high-fidelity prototypes, incorporating feedback from user validations throughout to identify how "intuitive" the application is and the value it provides from extended use
• Interaction design - optimize and test navigation, control elements and messaging for user comprehension and efficient and effective use
• Branding and visual design - define the colors, graphics, fonts, motion, polish and fluidity that create the brand experience, always testing with users
• Documentation - provide screen functionality specifications  and visual design style guide

User Experience Developer

• Code clickable models - provide a full clickable model using dynamic data of exactly what that software will be like when it is released
• Presentation layer architecture - map out and validate proposed UI architecture so it is consistent with technical architecture, before writing any code
• Client side technologies - select and implement the UI using the optimal RIA for the users and IT infrastructure (e.g. AJAX, Flex, AIR, Silverlight, Java). Re-factor UI designs into a customized library of UI components, data, and actions
• Server-side technologies - translate what is going on in the back-end systems to communicate with the front-end user UI, requiring fluency in multiple languages and Web services
• Data and business logic implementation - rapidly iterate designs and systematically incorporate feedback to expose and validate that all data elements and UI components are matched to the database schema

Designing user experience for enterprise RIAs and SaaS is complex - no doubt about it. But compromises to the user experience will have a fundamental negative impact on the success of any application, so it is not something you can ignore or marginalize. To maximize business value, you should look for a multi-disciplinary team with diverse skills and tactical experience to design the application and augment the technical development work of your internal IT group.