Calculate Design System value via cost savings

Show me the money

So, you've been asked to provide some numbers about the ROI (Return on Investment) of your Design System.

While satisfaction surveys are nothing to frown at and have their place, your typical ROI definition is "a calculation of the monetary value of an investment versus its cost".

This is why we can only really prove it with an amount of money.

Because Design Systems don't directly generate revenue (like a new feature in a product might), the most reliable thing to measure is how much money it saves an organization versus getting things implemented over and over again.

How do I figure out how much money the DS is saving?

Get ready to dust out your designer math skills? ??

First thing you need to find out is the average salary costs per engineer/designer, you can ask your Engineering or Design Managers for a rough figure.

This will typically be a yearly number, for example, let's say 140 000€.

There are around 2,080 hours a year (40 hours per week), which means the average hourly cost for an employee at your organization is 67€.

Easy, peasy, you now have a way to quantify one hour of individual effort ??

Cost per component

What you need to do now is take a medium-complexity component you worked on and estimate the number of hours of effort it took to make it happen as part of the Design System.

You can calculate the time for the design bits, the time for the code implementation, or both combined.

So, let's say the PandoraBox component took around 30h to complete.

30 x 67 = 2?019

The PandoraBox cost the Design System team 2?019€ to make real ??

Then ask some of your Design System consumers to help you estimate how long it would take them to get that component done in the team's context.

If you can't get that estimate for any reason, consider this little hack. In my experience, designers in teams I've worked with took between 150% to 300% longer to create the same quality of component as an experience Design System team.

So let's be generous and say teams take 150% more time to complete a component.

2 019 x 1.5 = 3?028

If another team made the PandoraBox, it would have cost 3?028€.

Let's say 20 teams would have to make this component...

3 028 x 20 = 60?570

The total cost of having 20 PandoraBox components implemented by teams would be 60?570€ ??

Now, we can easily calculate how much you've potentially saved on just this component.

60?570 - 2 080?=?58?490

58?490€ is what I call opening a Pandora Box of savings! ??

The cost of all components

Now the magic of economies of scale happens.

Say your Design System has around 80 components, and to keep it simple let's say the average cost of each of them is 2?019€.

2 019 x 80?=?161?520

So all the components cost around 161?520€ for your Design System team to craft.

Using the 150% time penalty for each team to do the same...

161?520 x 1.5 = 242?280

All that is left is to do two calculations to figure out the potential money savings of the entire DS implemented by one team versus 20 different times.

Multiply by 20 teams...

242?280 x 20 = 4?845?600

Subtract the DS team cost...

4 845 600 - 161 520?=?4?684?080

And we have a total Design System cost saving of 4?684?080€, or in other words almost FOUR MILLION AND A HALF EUROS ??

There's not a lot of internal projects that can claim these numbers ??

What about time saved?

If each component takes about 30h, 80 would take around 2?400h.

Multiplied by 20 that's 48?000h. Apply the 150% time penalty and you get 72?000h.

72?000 - 2?400 = 69?600

Knowing there are around 2 080 hours in a work year...

69?600 / 2 080 = 33,46

That's 33 work years saved compared to having 20 teams implementing those 80 components repeatedly.

Imagine what your organization could achieve with 33 people focusing on delivering business and user value instead of doing repetitive and redundant work.

Some last remarks

This is a grocery store owner's method of estimating cost savings, and should not be sold as a financially sound estimate.

When you show these numbers, the goal is not to achieve a definitive and mathematically accurate number but to invite your stakeholders to realize the potential of DesignSystem work for the organization's bottom line.

I truly believe this is a very generous underestimation of the cost savings a genuinely great Design System achieves. And it's only adding up the value of the component layer of the work.

Even if you cut these estimates by 50% to appease the skeptics, the numbers are still quite staggering and likely a drop in the ocean of the actual value your Design System brings to designers, developers, stakeholders, the business and ultimately your users.