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Cost Management in Academic Libraries. "It is an unusual business that cannot say how much it costs to deliver any of its products; and I do not believe we will continue to get away with it." (J. Stephen Town). Roswitha Poll University and Regional Library Münster. - PowerPoint PPT Presentation
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ULB MÜNSTER
Cost Management inAcademic Libraries
"It is an unusual business that cannot say how much it costs to deliver any of its products; and I do not believe we will continue to get
away with it."
(J. Stephen Town)
Roswitha PollUniversity and Regional Library Münster
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Reasons for Cost Management• General demand for transparency of costs• Justification of expenditure
• Dwindling resources• Rising prices• New tasks and products in libraries
• Allocation of resources• Outsourcing, insourcing• Enlarging, reducing, introducing services• Service-level agreements
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• What we could answer exactlyThe price of every document acquired or of
one PC bought
• What we cannot answerHow much for one issue?Or for one reference question answered?
How much does a student of philosophy cost per year?
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What we count by now • Income (from different sources)• Expenditure
– on collection building and maintenance– on automation– on the operating of the library– on staff
The new International Standard for Library Statistics (ISO FDIS 2789) contains many differentiations as to expenses, especially with regard to electronic media
But it is all "expenses", and that means items that appear on bills or staff payrolls
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"Costs" are another thing
The recources consumed for one product• can originate in different departments of the
library (document delivery)• can occur outside the library (central heating)• even outside the institution (regional office for
staff payrolls)• can stretch over several years (depreciation)
The consumption of resources to acquire, produce ormaintain goods or services within a defined period
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Occasions for analyzing costs
• Outsourcing services (binding)• Buying products (cataloguing)• Introducing new services (document delivery)
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Project: Cost Management for University Libraries
• Funds Deutsche Forschungsgemeinschaft• Partners Univ. and Regional Lib. Münster (chairing)
Univ. and Regional Lib. DüsseldorfUniv. Lib. Paderborn
• Time 4/1997 – 7/1999• Method Activity-based cost accounting• Product Handbook and Software
Ceynowa, Klaus / Coners, André:Kostenmanagement für Hochschulbibliotheken.Frankfurt a. M.: Klostermann 1999.
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Connection between Costs and Services
Services
Activities
Costs
Resources
...
Cau
se ..
.
.
.. C
ause
...
... n
eed
...
... Consume ... ... Consume ...
Library
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Cost Analysis inPublic Service Institutions
• Products are nonmaterial
• Capacity costs are predominant
• Many costs are fixed
Library
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Cost Analysis in Libraries
• Problems– Availability of Data
– Standards for Depreciation
– Staff Costs: Real or Standardized Costs?
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Model of cost analysis
Which RESOURCESWhich RESOURCES
are consumed WHEREare consumed WHERE
by which ACTIVITIESby which ACTIVITIES
/PROCESSES/PROCESSES
with what RESULT?with what RESULT?
RESOURCESRESOURCES
WHEREWHERE
ACTIVITIESACTIVITIES
RESULT?RESULT?
Cost TypeAccounting
Cost TypeAccounting
Cost CenterAccounting
Cost CenterAccounting
Activity-BasedAnalysis
Activity-BasedAnalysis
Cost UnitAccounting
Cost UnitAccounting
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Cost Analysis in Academic Libraries
• Cost Type Accounting: The ascertainment and calculation of all relevant cost factors of a library within an accounting period
• Cost Center Accounting: The calculation of the costs of the various sections or departments of the library
• Cost Unit Accounting: The calculation of a single unit or performance of the library´s products/services
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Cost Center 3Cost Center 2Cost Center 1
Cost accounting method
P1.1
P1.2
P1.3
P1.4
P2.1
P2.2
P3.1
P3.2
P3.3
Assigning to products
Product 1 Product 2
Processes Processes Processes
Cost types
Staff Collection Administr. Costs DepreciationsOperating Costs
Scanningdocuments
Deliveringdocuments Dealing with
claims
Settlingaccounts
Electronicdocumentdelivery
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Cost structure ULB Münster
66 %
4 %5 %4 %
21 %
Total 24.770.535,31
Staff costs 16.357.001,19Collection costs 5.126.907,43Administration Costs 911.288,96Operating Costs 1.384.577,58Depreciations 990.760,15
Staff costs16.357.001,19 DM
Collection costs5.126.907,43 DM
Adminstr. Costs911.288,96 DMOperating costs1.384.577,58 DMDepreciations990.760,15 DMTotal CostsTotal Costs
24.770.535,31 24.770.535,31 DMDM
Processes
CostCenters
CostCostTypesTypes
Products
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52Cost
Types
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Costs of service areas
11 %13 %
39 %
4 %3 %
3 %
16 %7 % 4 %
Subject librarians 2.711.426,05Book processing 3.284.062,58
Collection maintenance 635.936,12Services for departmental libraries 751.252,30Branch libraries 3.941.089,17General administration 1.856.416,09Data processing 1.033.175,81Total 24.770.535,31
User services 9.640.321,81Services as regional deposit library 916.855,38
Processes
CostTypes
CostCostCentersCenters
Products
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44Cost
Centers
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Cost Centers
10 ACQUISITION 20 CATALOGUING 30 USER/PUBLIC SERVICES
40 TECHNICAL SERVICES
50 CENTRAL RESPONSIBILITIES
60 OTHER 70 BRANCH LIBRARIES
11 Subjects 21 Author catalogue 31 Local lending 41 Purchasing and materials dept.
51 General admin. 61 Old stocks dept. 71 Branch library social sciences
12 Purchase:monographs, electr.media etc.
22 Retrospectivecataloguing
32 Interlibrary loan 42 Mail room 52 Data processing 62 Dept. HistoricalCollections Westphalia
72 Branch librarymedicine
13 Purchase:periodicals
23 Münster'speriodicals directory
33 Textbook coll. 43 Printing office 53 Centralized cata-loguing
63 Northrhine-Westphal. bibliography
14 Newspaper dept. 24 Subject catalogue 34 Reading rooms 44 Book preparation (binding unit, bindery, technical processes)
64 Preservation (incl. newspaper microfilming)
15 Integr. processingof deposit copies
35 Information 45 Stacks 65 Projects
16 Gift and exchangedept.
36 Entrancecontrol (foyer)
46 Janitor services
17 University publ.dept.
47 General traffic and technical areas
10 ACQUISITION 20 CATALOGUING 30 USER/PUBLIC SERVICES
40 TECHNICAL SERVICES
50 CENTRAL RESPONSIBILITIES
60 OTHER 70 BRANCH LIBRARIES
11 Subjects 21 Author catalogue 31 Local lending 41 Purchasing and materials dept.
51 General admin. 61 Old stocks dept. 71 Branch library social sciences
12 Purchase:monographs, electr.media etc.
22 Retrospectivecataloguing
32 Interlibrary loan 42 Mail room 52 Data processing 62 Dept. HistoricalCollections Westphalia
72 Branch librarymedicine
13 Purchase:periodicals
23 Münster'speriodicals directory
33 Textbook coll. 43 Printing office 53 Centralized cata-loguing
63 Northrhine-Westphal. bibliography
14 Newspaper dept. 24 Subject catalogue 34 Reading rooms 44 Book preparation (binding unit, bindery, technical processes)
64 Preservation (incl. newspaper microfilming)
15 Integr. processingof deposit copies
35 Information 45 Stacks 65 Projects
16 Gift and exchangedept.
36 Entrancecontrol (foyer)
46 Janitor services
17 University publ.dept.
47 General traffic and technical areas
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Analyzing the processes: Circulation
CostCenters
CostTypes
ProcessesProcesses
Products
CIRCULATION
Recording loansRecording loans
Cancelling loansCancelling loans
Issuing user cardsIssuing user cards
Monitoring loan periodsMonitoring loan periods
Account of finesAccount of fines
Delivery in electronic formDelivery in electronic form
etc.etc.
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442Processes
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Analyzing the processes: Subject librarians
CostCenters
CostTypes
ProcessesProcesses
Products
SUBJECT
LIBRARIANS
Process 1: Subject cataloguingProcess 1: Subject cataloguing
• Percent of staff time: 17,6 %• Process time: 3 man years• Process time: 4.467 hours• Process costs: 477.221 DM• Number of documents catalogued: 14.635• Unit costs: 32,60• Time per unit: 18 Min.
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Products: Examples
CostCenters
CostTypes
ProductsProducts
Processes SubjectreferenceSubject
reference
Internet-servicesInternet-services
CollectionBuilding
CollectionBuilding Undergraduate
LibraryUndergraduate
Library
Usereducation
Usereducation
ExhibitionsExhibitions
Collectionmaintenance
CollectionmaintenanceReference
ServiceReference
Service Service fordep. librariesService for
dep. libraries
Documentdelivery
Documentdelivery
CirculationCirculationOnline-
searchesOnline-
searches
Library ProductsLibrary Products
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55Products
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Product: Book processing legal deposit documents
CostCenters
CostTypes
ProductsProducts
Processes
Search for titles 44.573
Claiming 37.876
Inventory 37.645
Cataloguing 86.144
Subjectcataloguing
78.100
Technical proces-ses (binding...)
11.223
Shelving 5.308
Total:
300.869 DM
6.695 books
= 44,90 DM
per unit
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Managing costs by processes...
3,5man years
6.000units
3,5man years
7.500units
Capacity adjustment
2,5man years
6.000units
Optimizing processes
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Possible starting pointsfor process optimization
Differentmedia usedDuplicate
processes
Errorcorrection
Waitingtimes
UnnecessarycontrolsDetours
Muddled re-sponsibilities
Processestoo complexInterfaces
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Optimizing processes: Cataloguing
8. Controlling cataloguing 10,62% 0,52 57.336,689. E-mails in cooperative cataloguing 2,78% 0,14 14.992,28
Disposable
capacity
0,66 man years
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Rate of capacity utilization:Undergraduate Library
• maximal capacity?
• normal capacity?
• surplus cover?
Acquiredvolumes 5.8695.869 4.5644.564 7.2527.252 8.0518.051
Period 19941994 19951995 19961996 19971997
Staff capacity in the process „processing undergraduate books“: 4.689,29 Std.
8.0518.051
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•Gain in productivity without higher costs•Cost reduction without loss in productivity
To produce more/betterwith lower costs
= Efficiency
Optimizing processes results in...
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The use for management decisions• to justify claims for resources
(e.g. service level agreements)• to estimate costs
– For new or enlarged services– Gained by reduction or deletion of services– For taking fees
• benchmarking• decisions on outsourcing• process optimization, especially to adapt
capacity costs to output• comparing cost-efficiency and quality
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Good or cheap?• Example 1: Reference service
– Cost of 1 reference question 4,53 DM– Reference fill rate 60 %– Satisfaction rate 1,9
• Example 2: Subject cataloguing– Cost of 1 document 32,60 DM– Subject search success rate 87 %– Satisfication of partners in
cooperative cataloguing „Best quality“Subject librarian with full academic qualification.
Subject indexing department controlling.Subject librarian with full academic qualification.
Subject indexing department controlling.
Professional librarians from 800 to 1900Professional librarians from 800 to 1900
Is itworth-while?
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The price spoils the pleasure(French proverb)
... if money go before, all ways do lie open
(Shakespeare)
Penny and pennylaid up will be many
(English proverb)
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