As a disclaimer, I've been recently working on consumer electronic space,
designing about 60% to the devices, 30% for web and remaining percentage
points for various other media. Why this is meaningful hopefully opens up
later on in the reply.
In any case, many of the "faults" in UCD that I've encountered are not often
the faults of UCD itself, but the way in which people try to follow the
taught methods. It's not uncommon to hear or see that something is done just
because it's "supposed" to be done, without questioning. Further, given that
many products fail, UCD undoubtedly has a place on many areas to increase
the probabilities to make a decent thing. Not all of us are Google or Apple,
and not all projects are there to change the world in fundamental ways. As
if that was not enough, a designer can end up working on area that s/he has
no previous knowledge of - in which case doing user research is more or less
fundamental even if done without adhering to "full" UCD cycles. Finally, the
benefits of UCD are more clearly seen in refinement iterations of your
projects.

Now, the good out of the way, there are some issues with many UCD practices,
even if not with the concept itself. One of my biggest issues is with the
kick-start of new projects. Moments when you don't know who your users are,
when you are working on areas that provide new models and break technical
barriers. The times that you just know that asking from the right users is
almost impossible or extremely hard. When there are no established
practices. It's not even that hard to come up with such stuff these days. In
some of these cases, user research findings can destroy good concepts that
haven't been explored deep enough yet. In some ways, ignorance can be a
blessing.

Users lie. They are unable to imagine themselves and the change in society.
They are in some ways fixed to their current practices, which themselves can
be a result of necessities, not optimal decisions. Thus, user-research can,
in some cases, prevent break-throughs.

After all this bashing, though, it would be good to remember that designers
are not always that much better. If design is separated from implementation
and engineering work, it is often easy to come up with unrealistic specs.
Lack of technical know-how can lead to wrong guesses of what is possible and
ignorance to the points where expanding what is possible would be within
reach. This is not as easily seen with web-stuff, given the relative stable
UI model. But there are times when you can work with the platform and make
the thing less involving just by technical advancements. UCD might not help
here, but neither would a purely designer-driven team either. The examples
earlier that showed engineers making breakthroughs fit this picture quite
well. And none of this should be any news, really.

In the end, I guess the question is a bit moot. UCD, in my view, faults in
that it is at times followed blindly. But it can be utilized in many
circumstances. Other methods exist as well, but such does not make UCD dead
. UCD is a bit like democracy - it's not perfect, but at least the chances
of achieving a mediocre thing are increased and avoiding disaster is made a
bit harder.
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