Helping Information Services Organizations Meet the Needs of Scholars by Understanding Their Changing Attitudes and Prac

1. Helping Information Services Organizations Meet the Needs of Scholars by Understanding Their Changing Attitudes and Practices Kevin Guthrie Ithaka May 18, 2009

3. Themes The business cycle is, to quote Hobbes, “…nasty, brutish and short”; today’s added value is tomorrow’s commodity In local information and communications, we are moving (have moved?) from a world dominated by capital to one dominated by services and activity Which services belong at the system/network level, and which should remain at the local level? The academic world is insulated no longer

4. Outline An example of the fast moving business cycle An example of a long-lived important capital intensive business making a transition Data from Ithaka faculty surveys that indicate increasing pressure on traditional model for libraries What have corporate libraries done? Some questions to think about

5. An Example: Consumer Video Blockbuster’s retail stores. Netflix consolidated capital in warehouse and DVD distribution and an on-demand technologically mediated interface. Subscription business model. Strong recommender systems. TiVo created a locally stored solution enabling users to keep and recall digital video, again with a well-developed interface. Netflix and TiVo both were almost immediately challenged by cable-based and online services that provide video on demand digitally. Further consolidation away from the local. What are Netflix or TiVo’s truly sustainable competitive advantages?

6. IBM’s Transition Sold proprietary mainframes for decades, with profit margins of approximately 50% The client-server model (and later the internet itself) was interoperable across producers, increasing competition and squeezing profits And IBM managers, initially unwilling to cannibalize mainframe profits, did not push to take a leadership position in client-server matters As a result, with mainframe sales in inexorable decline, by the mid 1980s to mid 1990s IBM was in an increasingly threatened position

7. IBM’s Shift from Capital to Services By the mid-1990s, IBM had realized that its major business customers were looking for a single source of advice about whether to pursue new computer systems, how to implement new systems, and actually managing the deployment. It began to compete effectively with major consulting companies and ultimately purchased the consulting business of PricewaterhouseCoopers, doubling its services capacity By getting higher up in the value chain of its consumers, IBM was able to understand their needs better and develop services in response to their demand. IBM has gone from providing outsourced call center and server room management for its customers, to taking on their payroll and benefits administration work, and even customer services

8. IBM’s Trajectory Today, more than half of IBM’s revenues come from its services businesses, which are people-intensive but capital-light It no longer builds hard drives, consumer PCs, or a variety of other tangible, capital-intensive products The genius of this transition seems to be that providing services was always what IBM did best – it created mainframes and helped companies integrate them into their operations. Its value-add now is no longer captured in the production and sales of a tangible object but rather in services created based on knowledge and experience

9. Do Libraries Face a Similar Transformation? To whom are YOU selling? Who has to be served effectively for you to continue to be relevant? Who is going to fight for resources for you and why? How will you continue to justify the resources invested in your organization?

10. Do Libraries Face a Similar Transformation? Users are shifting from relying on capital as the vessel of exchange – a physical journal or book – implying a need for services built around knowledge exchanged in non-physical media Efforts to re-establish the physical space of the library as campus center or crossroads are valuable as places of teaching and learning, but they are still about capital. How can space be leveraged to connect deeply with knowledge that is being developed, shared and disseminated in ways disconnected from physical objects and space? Findings from Ithaka’s faculty surveys collectively tell a story of changing perspective of faculty, obviously an important campus constituency.

11. Value of Library Functions “How important is it to you that your library provides each of the following functions?” • The library is a starting point or “gateway” for locating information for my research. • The library pays for resources I need, from academic journals to books to electronic databases. • The library is a repository of resources – in other words, it archives, preserves, and keeps track of resources.

12. How Faculty Members Value Library Functions • The buyer function is most highly valued, across all disciplines. • Is this the function to which the library adds most value? • Are there other functions where the library has potential to add greater value over time?

13. Scientists Decreasingly Value Libraries’ Gateway Function • Libraries devote a growing share of their collections budgets to the sciences… • …While scientists value library-provided discovery services less and less (as are economists). • Should the library find better ways to provide (or communicate) gateway value? • Or should it provide more valued services to them?

14. As Faculty Valuation of Legacy Services Declines, so Does Their Perceived Dependence on the Library • Disciplinary groupings mask some alarming individual disciplines: • Economics: 30% • Physics: 48% • Dependence is expected to decline further over the next five years. • Libraries are losing the support of scientists. What will happen to humanists?

15. Percent of economics faculty responding very dependent to: “How dependent would you say you are on your college or university library for research you conduct?”

16. Percent of economics faculty responding very dependent to: “How dependent would you say you are on your college or university library for research you conduct?”

17. Percent of economics faculty responding very dependent to: “How dependent would you say you are on your college or university library for research you conduct?”

18. Percent of economics faculty responding very dependent to: “How dependent would you say you are on your college or university library for research you conduct?”

19. How Does This Translate Into Support for the Library? “Because scholarly material is available electronically, colleges and universities should redirect the money spent on library buildings and staff to other needs.” • Note this question is carefully worded – it refers to cutting staff and building expenditures but allows for the continued presence of the “buyer” function. • Every library should want faculty to respond, on a ten-point scale, with 1s and 2s and 3s – indicating strong disagreement. • But in 2006…

20. With Declines in Valuation and Dependence, Expect Reduced Faculty Support for the Library • Disconcerting levels of agreement with this statement, especially in the sciences and some of the social science fields. • Reduced perceptions of dependency and value are beginning to translate into declining faculty support for the library on campus. • Note: This graph reflects “agreement” (responses between 6 and 10 on a 10-point scale) rather than “strong agreement.”

21. Corporate Libraries Faced a Similar Dynamic Faced with declines in the value of their traditional collections and services, corporate libraries have transformed or died The successful ones have emphasized deeper services targeted towards specific populations of interest The general momentum is away from providing broad transactional support and towards working on a smaller number of higher importance problems in greater depth. In this way, the library can resist the forces of disintermediation and more clearly demonstrate its unique strengths and abilities

22. Questions and Thoughts to Ponder Can academic libraries benefit from pursuing similar strategies, focusing on services for faculty? What might be learned from serving scientists or economists, for example? Should libraries move away from a reliance on capital and towards a more exclusive dependence on human capital and the services they can provide? The restructuring necessary to accomplish such a goal would be painful and difficult, but is it necessary for libraries to serve faculty research needs in a newly competitive environment?

23. Sources and Further Reading Nicholas Carr, The Big Switch: Rewiring the World from Edison to Google, W.W. Norton & Co., New York, NY Peter J. Coughlan and Jennifer L. Illes, “Blockbuster Inc. & Technological Substitution,” a series of four Harvard Business School Case Studies, 2004. Ross Housewright, “Themes of Change in Corporate Libraries: Considerations for Academic Libraries,” portal: Libraries and the Academy 9:2 (April 2009), 253-271, available at http://muse.jhu.edu/login?uri=/journals/portal_libraries_and_the_academy/v009/9.2.housewright.html Ross Housewright and Roger Schonfeld, “Ithaka’s 2006 Studies of Key Stakeholders in the Digital Transformation in Higher Education,” available at http://www.ithaka.org/publications. Robert D. Austin and Richard L. Nolan, “IBM Corporation Turnaround,” Harvard Business School case study, 2000.

24. Conclusion or Discussion?