Using cost analysis for collection management

1. Using cost analysisfor collection management Dr. Roswitha PollMünster, Germany Poldoc 2005

2. Definitions Management • The administration, planning. command, coordination, and control of an organization in order to achieve defined objectives with maximum efficiency Cost accounting • A system of accounting concerned with providing and recording detailed information on the costs of producing goods and performing services Strategic cost management • To work cost-effectivelywithin the framesof strategic goals Poldoc 2005

3. Performance Effectivenessof offering library servicesand Efficiencyof allocating and using ressources for the services good and cheap Poldoc 2005

4. What is meant by "costs" • Expenditure = Financial transactions, appearing on the library's bills or payrolls • Costs = Consumption of resources in order to produce or maintain goods or services. This includes: • costs not charged against the library's budget(e.g. utility costs) • depreciation costs(of buildings, computer system ...) Poldoc 2005

5. Cost accounting • Cost type accounting: Assessing all relevant cost factors of a library within an accounting period • staff costs • collection building costs • administrative costs • utility costs • calculatory depreciations • Cost center accounting: Calculating the costs of the various departments of the library • media processing • lending service • reference service … Poldoc 2005

6. Cost accounting: • Cost unit accounting: Calculating the costs of a single unit of the library’s products or services • One book processed • One reference transaction • One issue … Poldoc 2005

7. Model of cost accounting Cost TypeAccounting Cost CenterAccounting Which RESOURCESare consumed WHEREby which ACTIVITIES / PROCESSESwith what RESULT? RESOURCES WHERE ACTIVITIES RESULT? Activity-BasedAnalysis Cost UnitAccounting Poldoc 2005

8. Cost analysis What the library knows after using activity-based costing: • The amount of costs • for each cost type • Staff costs • In each cost center • Total costs in media processing • for each single product or service (cost unit) • Costs of one item processed • In addition: • The average time neededfor the production/delivery of one unit Time for one item processed Poldoc 2005

9. Collection building The normal procedures of budgetary planning • Budgets and statistics as to • subjects • biology, history • types of media • serials, monographs, • AV-media, microforms… • electronic and non-electronic media • print and E-journals • In addition: • fixed and variable costs Poldoc 2005

10. Collection building Models for resource allocation to subjects • Models have tried to standardize • problem: price development • the average expenditure per year necessary for a subject comparison with models or other libraries with a similar structure shows deviations, gaps, peaks • the average number of volumes/subscriptions necessary for a subject • problem: variations in publications output • Example: • Bayern • Griebel, Rolf: Etatbedarf universitärer Bibliothekssysteme. • Klostermann 2002 Poldoc 2005

11. Collection quality Performance indicators for evaluating collection quality • percentage of required titles in the collection • required titles availability • percentage of rejected sessions contents • collection turnover • percentage of stock not used use performance indicators can show whether the collection comes up to user needs Poldoc 2005

12. Collection quality Performance indicators for costs ISO 11620) • costs include • total recurrent expenditure cost per loan • costs include • contractual costs of a database cost per database session • costs include • contractual costs of an electronic resource cost per content unit downloaded Poldoc 2005

13. Journals: Cost per use Example 1: Medical library Münster Expenditure in 1000 € SUBITO Bookbinder other Books Journals Poldoc 2005

14. Example 1: Medical library MünsterJournal use (print versus online) Journals: cost per use Poldoc 2005

15. Journals: cost per use Example 1: Medical library Müster Users accessed online versions 10 times more than print versions Only subscription costs are considered! Poldoc 2005

16. Journals: cost per use Example 2: Drexel University Operational costs of print and electronic journals Montgomery, Carol Hansen, Donald W. King: Comparing library and user related costs of print and electronic journal collections. D-Lib Magazine October 2002 Drexel University Philadelphia Poldoc 2005 Space Costs

17. Staff costs by function (Drexel) Space Costs

18. Cost per use by journal type (Drexel) Poldoc 2005

19. Journals:cost per use Problems in measuring cost per use For subscription prices • package deals for journals • consortia with "additional access" • publishers insist on "print + electronic" For measuring use But: High acceptance and useof E-media will evidently result in lowercost per use • reshelving counts may under-estimate use (several articles may have been used before reshelving) • E-journal use data may differ between publishers For assessing operational costs • assessing staff time will be time-consuming • long-term preservation costs for E-media still questionable Poldoc 2005

20. Journals: methods of measuring use For print journals • asking users to note cases of use • observation studies • reshelving method • loans, if applicable • copies taken in journal collections What is assessed: whether a user has taken a volume/an issue out of the shelves Poldoc 2005

21. Journals: methods of measuring use For electronic journals COUNTER (Counting Online Usage of NeTworked Electronic Resources) ISO 2789 • Statistics: • sessions • rejected sessions • downloads (content units)- full-text article- table of contents- abstract- record • searches (queries) What is assessed: whether a user has tried to access an E-journal, was successful and found relevant material Poldoc 2005

22. Journals: access versus holdings Example: Medical library Müster • Print and electronic journals with a high cost per use • are cancelled • Articles needed are ordered via Subito delivery service • The libray pays 4 € per article • faculty • graduates Who can use Subito? Poldoc 2005

23. Journals: access versus holdings Example: Medical library Müster Poldoc 2005

24. Changing from print to electronic collections What changes for the library? In use • decrease of traditional services (loans, visits, copying) • increase of electronic use overall: increase in use in costs • less costs for storage, binding • higher systems and staff costs • better qualified staff needed • lower cost per use Poldoc 2005

25. Changing from print to electronic collections What changes for the users? In use • access from the working-place or home • access at once • 24-hours access • searching options, links additional value in costs academics spend half a day per week on seeking and procuring information • time saved ! • no ways, no fetching of materials, • no waiting in queues

26. The balanced view of management Perspectives • Clients (user-orientation) • Finances (cost-effectiveness) • Processes (effective organization) • Learning and development (fitness for future) Cost management • not saving resources • but optimal use of existing resources in the frame of mission, goals and quality standards The main question as to costs of a service: • How does this service contribute to the library’s value ? • Is it worth its price ? Poldoc 2005

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