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-effectively within 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 librarys 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
Example 1
Medical library Münster
Expenditure in 1000
Journals Cost per use
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
Journalscost 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 librarys
  value ?
• Is it worth its price ?

Poldoc 2005
27
There is no economy in going to bed early to save
candles
if the result is twins