Library Acquisitions: Practice & Theory, Vol. 16, pp. 251-263, 1992 Printed in the USA. All rights reserved.

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CONFERENCE REPORTS

LIBRARY ACQUISITIONS: BUDGET STRATEGIES, VENDOR SELECTION,

VENDOR EVALUATION

Report of a Conference

OCTOBER IVINS

Head, Serials Services

Louisiana State University Libraries

Baton Rouge, LA 70803-3342

Since 1986, the University of Oklahoma Libraries and the University of Oklahoma Foun- dation have sponsored an annual conference, chaired by Dean of Libraries Sul H. Lee. Com- monly referred to as “the Oklahoma conference,” each conference addresses a specific aspect of the impact of rising costs on library administration, and each has attracted an interesting mix of collection development, acquisitions, and serials librarians as well as library admin- istrators, educators, and vendors. The concentration on a well defined theme is one of the most attractive aspects of these conferences. The 1991 conference was held February 21-22 on the specific theme of “Library Acquisitions: Budget Strategies, Vendor Selection, Vendor Evaluation. ”

Following tradition, the 1991 program was limited to eight speakers, who were each allowed an hour, including questions. This practice encourages more substantial papers than is typi- cal with many conferences. Speakers often repeat from year to year (for instance, four speak- ers at the 1991 program had also spoken in 1990), which has both positive and negative results. On the positive side, all of the speakers were proficient and well prepared and a certain con- tinuity is achieved. On the other hand, some speakers pointed out that their expertise was not

in the assigned topic, and they chose to present a related, but more general, one. The relatively small audience and absence of concurrent sessions contributed to the intimate

and focused atmosphere. Scheduling the conference for two half-days (an afternoon and fol- lowing morning) rather than an entire day aided travel arrangements and helped to create an atmosphere that encouraged attention without exhaustion. In recent years, attendance has been about 120 people, but only 80 attended in 1991, apparently a result of the combination of diminished library travel budgets, reluctance to fly during the Gulf War, and a scheduling conflict with the Texas Automation Conference in Houston. Overall, it was a very good meet- ing and the papers presented deserved a larger audience. The remainder of this report will ex- amine the papers, all of which will be published as one issue of the Journal of Libraty Administration.

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Speaking first, Ann Okerson, Association of Research Libraries, gave an energetic and wide-ranging call to action in “The Old Order Changes: A Plan for Action.” Noting that most papers follow an 80/20 rule in which 80% is description and 20% suggested solutions, she al- tered the proportions so 50% of her remarks addressed solutions. She began with a review of the information crises in libraries, covering size of the literature, growth of the literature, own- ership of the literature, and the backdrop of pervasive technological change. Okerson high- lighted the inherent conflict generated when publicly produced research passes into private ownership. She next outlined current library strategies, noting that most are “bridging” rather than long-term solutions. These include shifting funds into acquisitions from other lines, mak- ing a case for more money for collections, cancelling subscriptions, and buying fewer mono- graphs. Current methods with some long-range potential are collection sharing via interlibrary loan and high-tech experimentation, shifting materials budget and staff into access as opposed to local ownership, trimming purchases to fit closely to local needs and programs, and pro- testing to publishers about high prices and other unacceptable practices.

The heart of her talk was an urgent description of the critical need to translate our efforts into “a broader endeavor for the library profession” and stating, “the overarching objective is a shared information conscience.” We must encourage the active participation of scholars and researchers and take our concerns beyond the library. She suggested that a shared con- sensus should address consumer issues, competition and ownership, academic incentives, and technology and experimentation. Okerson then reviewed an impressive number of activities undertaken by the ARL Office of Scientific and Academic Publishing during its first year, tak- ing care to note that ARL activities benefit other academic and research libraries, not just member libraries. One group of activities involves libraries, library consortia, and related as- sociations. A second group of activities focuses on the development of new relationships and dialogues with other groups, including the American Association for the Advancement of Sci- ence, the American Mathematical Society, and the American Association of Publishers. It is a remarkable record for a single year, and Okerson minimized her personal role by stressing the debt ARL owes its many active members.

Having a tough act to follow, Joseph W. Barker, Head of Acquisitions at the University of California, Berkeley, gave an excellent paper: “What’s Your Money Worth? Materials Budgets and the Selection and Evaluation of Book and Serial Vendors.” He began with a review of pertinent environmental trends and related them to future library and vendor ac- tivities. The environmental factors covered the continuing development of automation, pub- lishing changes caused or facilitated by automation, and economic trends. For libraries, he expects inadequate public funding to have a negative impact on staff size and space. Librar- ies will have to rely even more on vendor services, but automation will allow sophisticated vendor performance evaluation and perhaps cost effective alternatives for direct ordering. Li- braries will become increasingly interdependent. The trend toward professional maturation will continue. In vendor behavior, he expects higher service charges and lower discounts to result from a static academic library market and accelerated changes in publishers and their products. Different marketing and sales approaches from vendors will develop. “Unbundling” or the “commodization” of vendor marketing will be one result; another is that vendors will develop ways to appear more accountable. Vendors will pursue further diversification; many will internationalize.

In the second part of his talk, Barker discussed the range of service changes available from subscription agents and discounts available from book dealers, by presenting detailed infor- mation about service charges paid and discounts earned at his library. For example, he showed that with five major vendors, prepayment discounts offset negotiated service charges so that

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the total serials service charge is 3%, or 1.75% of the materials budget. For approval plans, five vendors’ discounts range from 8% to 13070, with an overall rate of 10.7% before prepay- ment rebates, which range from 4% to 6%. The overall discount for firm orders is 7.2%. On the final overhead, he illustrated that the combined credits from each type of credit and dis- count totaled $86,580, or 1.44% of the materials budget. But if none of the credits or dis- counts was achieved, the cost to the materials budget would be 3.33% or $200,000.

He followed this detailed discussion with an analysis of what would be required to achieve additional savings and concluded that at a certain point it is unrealistic to pursue more favor- able deals. (While I agree with his analysis that Berkeley is unlikely to improve its savings, I think Barker was too optimistic in his assessment that other librarians have already achieved optimum savings within the context of their own collections. His specific examples of what is possible ought to encourage other acquisitions librarians to review their own bottom lines.)

The third part of his talk tied the first two together with five cogent and practical sugges- tions for action by librarians. Briefly summarized here, all concern aspects of evaluating ven- dor performance and a library’s need for and use of services. The first is to redouble monitoring of vendors’ service charges and discounts; pull random samples of invoices at least yearly and calculate service charge rates. Second, watch for deterioration of customer service from vendors. Third, be systematic in evaluating vendors’ speed, fill rates, renewal reliabil- ity, and claiming support; build a performance history for each vendor. Fourth, question the value and price of both established and new fancy services with specific and assertive actions; determine your own cost for performing the same activity and compare it to a dollar quota- tion for vendor service. Finally, be even more mindful of your rights and responsibilities as vendors’ customers; if you are dissatisfied, communicate the standards you expect and help set a high national standard for vendor work.

In this last area, Barker broached the topic of ethical conduct regarding vendors entertain- ing librarians. Barker concluded his talk with a reminder that it is easy to “get caught up in fighting the wrong battle, or fighting the right battle wrongly.” Instead, we need “to set goals for our materials budgets-new policies-that fit the funding, demographics, cooperation pos- sibilities, and technologies lurking beyond the next couple of horizons in the future.”

Daniel T. Richards, Collection Development Officer at the National Library of Medicine, in “The Library/Dealer Relationship: Reflections on the Ideal,” first presented his perception of the ideal library/dealer acquisitions relationship, then surveyed several trends and influ- ences and concluded with suggestions for evaluating vendor performance. He characterized the ideal library/vendor relationship as both critical and symbiotic and suggested that quali- ties such as communication, joint interest, mutual benefit, understanding, trust, and flexibil- ity are fundamental. Two significant factors prevent the ideal from being realized: first, no two library/dealer relationships are identical, and second, “each partner exists in a dynamic environment and that environment is subject to a wide range of influences.”

His discussion of trends and influences focused on the expanding role of information in electronic formats, noting that many products are not new information but an enhanced re- constitution of previously published material. A second trend is the change in selection cri- teria from predictive use to immediate use, as static budgets are confronted by a still-growing universe of materials. Two more trends are increased accountability for library decisions and actions, and adjustments in collection development in response to resource sharing. Preser- vation concerns are competing for scarce library funds, and preservation consciousness in- forms acquisitions decisions from acquiring Third World materials to replacement criteria.

This environment demands “a more rigorous evaluation of library/dealer relationships by both parties.” Despite the range of services that may be offered or used, the single most im-

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portant criterion should be a dealer’s ability to serve as a buying agent. Many other criteria can be considered, but evaluations should be conducted periodically and should examine as many aspects as possible. Richards suggested that the assessment model described by Van House, Weil, and McClure [l] can be adapted to evaluate the library/vendor relationship.

He also suggested several ways in which collective action might be effective. Among them is for librarians to take advantage of many educational opportunities to become more knowl- edgeable about vendors. Returning to the trends discussed, Richards stressed that since all of them will affect the library/dealer relationship, “we must become active, enlightened, com- parison shoppers” in vendor selection and evaluation. “Increased fiscal responsibility must be- come our goal; it is already our professional duty.”

The final paper of the first day was written by Charles A. Hamaker, Assistant Director for Collection Development at Louisiana State University Libraries. In “Some Measures of Cost Effectiveness in Library Collections,” Hamaker chose to address the “budget strategies” por- tion of the conference theme, noting that “concern for better management of resources,” such as vendor evaluation, leads also to “a more rigorous examination and justification of . . . se- lection and purchasing decisions.” Hamaker was unable to attend, and his paper was read by this reporter. His paper described four studies, two each for monographs and serials, con- ducted at LSU to explore use patterns and cost effectiveness of current collection decisions. The first monograph study analyzed the circulation of newly cataloged books cataloged dur- ing September 1990. When evaluated in February 1991, 43% of the books had circulated at least once, and 12% had circulated at least twice. This result raised many issues: can high-use titles be identified in advance, or early enough to obtain duplicate copies? Since LSU avoids ordering duplicates and is reluctant to shorten the length of the circulation period, what re- sponse to such use pattern is appropriate?

The first serial study examined current periodical use compared to cost. The results indi- cated that science and technology classifications received 15% of use while requiring 50% of subscription costs. The second serial study was based on rankings for every purchased title by every university department. The pervasive level of interdisciplinary use was unanticipated and suggests problems in attempting to conduct cancellation reviews by giving academic de- partments control of titles by discipline. For example, chemistry faculty assigned a ranking of “essential” to titles costing $500,000; only $50,000 of these titles were not also ranked es- sential by at least two other departments. Overall, fewer than 25% of purchased titles were ranked as “unique,” and 43% of the unique titles were in four departments (English, geog- raphy/anthropology, library science, and mathematics). Fewer than 10% of purchased titles are available for “swap out” by departments in the sciences that have the most expensive titles.

The second monograph study also highlighted interdisciplinary use of library collections. It examined faculty departmental use and found patterns similar to that for education: edu- cation faculty were responsible for only 12% of faculty circulation of books in the LC clas- sification. The LC class received the highest circulation, followed by psychology, philology/ linguistics, and general philosophy.

Hamaker concluded his paper with a call to redress the imbalance between books and se- rials in academic libraries by increasing the amount of money available for book purchases. He stated that these four studies support the need to lobby for a “national minimum formu- lation for adequacy in academic institutions” and cited information from ALA president-elect Marilyn Miller that indicates book purchasing in secondary school libraries has also declined. His recommended standard of “one new book purchased per student per year” would repre- sent a doubling of the current level of purchasing. He asserted that “a national standard of one new book purchased per student per year is not only reasonable, it is unreasonable to ac- cept less.”

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Robert L. Houbeck, Jr., Head of Acquisitions and Serials at the University of Michigan [2], was the first speaker of the second day. “ ‘Listening to the Technology’, or Libraries and the ‘Higher Capitalism’ ” was a thoughtful, philosophical examination of the problem of ac- ademic research and the lessons that can be applied to “manage our shrinking budgets and indeed the future of our institutions.” He drew the title of his talk from the work of two scientists. Carver Mead, a professor at the California Institute of Technology, foresaw the development and impact of the micro chip in the 1960s and called his method of research “listening to the technology” to “sort out what the thing was really trying to tell me from the things the experts were telling me” [3]. Houbeck invited the audience to listen to the problem of academic research, which he characterized as resulting from the increase in the numbers of scientists; tradition of precedence of discovery going to the first to publish; and the uni- versities’ quest for patents and the revenues they generate. This reflection led to his consid- eration of the twenty-year-old predictions of Robert Nisbet, a sociologist and administrator at the University of California, that the scramble for research money represented “the single most powerful agent of change that we can find in the university’s history” and labeled this new phenomenon “the higher capitalism” [4].

Houbeck next used graphs to illustrate the results of research he conducted on the relation- ship between the availability of federal research funds and the publication rate of articles. He concluded, “the data indicate . . . article output tends to vary directly with funding at an in- terval of one year.” He then shifted his focus back to the modern university, observing that as Nisbet and others predicted, the emphasis on big research has been at the expense of teach- ing and individual, non-grant-funded research. This shift is part of the reason why many uni- versity administrators and faculty no longer see the library as central to the mission of the university; “libraries too frequently are seen as consumers, rather than producers, of wealth.”

Houbeck offered several responses for libraries that include “offering differentiated re- sponses to our different internal constituencies”; ensuring that candidates for senior faculty positions visit the library and include funding for library support in their negotiations; and making sure the library is receiving its share of indirect cost reimbursement from research grants. He also suggested that we develop a clear idea of our strengths, leading him to a pos- itive and hopeful conclusion:

The business of the university needs money to operate, but it is not about money. It is about schohu- ship in the learned disciplines, a cumulative undertaking, an undertaking at once about the discovery of knowledge and its transmission. Its model, in some ways, is that of Acquinas, who as Josef Pieper observed, devoted “. . . the best energies and the best part of his life . . . not to a work of ‘research’ but to a textbook for beginners” [S]. Libraries, as cumulative enterprises, form a key role in both the discovery and the transmission of such knowledge. The technologies of transmission may change. But what is essential in our role, I am quite certain, will not.

Frederick C. Lynden, Assistant University Librarian for Technical Services, Brown Univer- sity, followed with “Strategies for Stretching the Collection Budget.” He explained his prem- ise, that “collection librarians must operate under the constraints of heavy inflation for the foreseeable future” and outlined areas that require more investigation. Research about user needs and collection evaluation is needed, as is enhanced interlibrary cooperation in catalog- ing and preservation as well as purchasing and cancellations. Noting that his survey of present collection strategies revealed many scientific approaches, he agreed with Barker that “profes- sional maturation” was evident.

The body of his paper was an articulate description of pragmatic suggestions based on ac- tivities already underway in a variety of libraries. In his comprehensive and well-documented discussion, 30 or so suggestions were grouped as collection management measures, budget-

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ary strategies, and political factors. The collection management measures emphasized consor- tium or cooperative solutions: coordinated consortial buying, cooperative database use, fax network for document delivery, use of common ordering software to reduce duplication, and creating a common storage facility. Solutions available to individual libraries or consortia in- clude cancellation projects, more rational collecting, obtaining the best value from vendors and publishers, adopting measures to reduce costs, and employing an online access program for articles.

The budgetary strategies included some innovative recommendations such as purchasing currency abroad to get favorable exchange rates, establishing endowment funds to support pe- riodicals, and seeking allocations from academic departments. More common suggestions in- cluded using a contingency fund for targeted purchases, transferring funds from other budget lines (such as binding or monographs), keeping close track of expenditures, careful allocation of one-time funds, and strong justifications for budget increases. The political factors sug- gested were educating the faculty, students, staff, alumni, and friends about the situation; forging alliances with faculty and with other institutions; establishing a university level com- mittee; encouraging donations of either subscriptions or money; challenging publishers; and advancing access rather than acquisitions.

In conclusion, Lynden listed five factors that also play a role in the success of any library in meeting budgetary challenges. Libraries with a high level of technology will be in the best position to follow these suggestions. Memberships in cooperative ventures are crucial, as is a well-educated constituency. The library staff needs an awareness of collection, budgetary, and political issues and a knowledge of what other libraries are doing. Finally, libraries must experiment with new modes of delivery.

“Vendor Selection, Vendor Collection, or Vendor Defection?” was presented by Dana Alessi, Director, Academic Marketing, Baker and Taylor Books, in which she compared the rankings of monograph vendor selection criteria by junior college librarians to those of at- tendees. The top five (of seventeen), with some variation by library size, for junior colleges were: (1) accuracy of order fulfillment, (2) discount, (3) customer service, (4) speed of deliv- ery, and (5) ultimate fill rate. Conference attendees agreed with the first two criteria, but then selected (3) speed of delivery, (4) ultimate full rate and (5) customer service.

The final speaker was Kathleen Born, Marketing Manager, Academic Division, EBSCO Subscription Services, who presented “Strategies for Selected Vendors and Evaluating Their Performance - from the Vendor’s Perspective.” Commendably, she did not use her talk as an opportunity to advertise, but provided well-considered, helpful suggestions about vendor per- formance evaluation without mentioning the name of any firm. She began by explaining that all vendors share the same challenge: “to generate their own capital,” to maintain basic ser- vices, and to stay competitive by developing new services. She summarized agencies as “profit- oriented, market-driven, and highly competitive” firms that strive “to give clients the best possible service at a reasonable price.”

Born suggested that performance evaluation should address three areas: service, price, and automation, and listed questions to ask in each category. She noted that basic, and perhaps obvious, questions about service such as “how are claims sent to the publisher,” “how often,” “how is the library notified of responses,” may elicit important differences in responses. She noted that “price” covers both obvious and hidden costs. Her comments about service charges supported those of Joe Barker, as she stated that most librarians focus on the service charge applied to their main renewal invoice, not recognizing that many other transactions incur ad- ditional fees or other rates that can reach substantial dollar amounts. Other tough questions should address the pricing policy on domestic and foreign titles, company policy on exchange

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rates, what the prepayment discount or credit can cover, circumstances when the stated ser- vice charge may be changed, and so forth.

Discussing automation, Born stated that automation support is no longer considered part of “the bells and whistles” but is essential to library operations. Questions here include how information is added to the database, whether access to the database is available and at what cost, and what type of interface with the library system is actually available as opposed to un- der development. Born acknowledged that “personality” is also a potent factor and should be recognized as such in decision making process. She noted that in some cases, decisions may appear to be based primarily on personality and this is not recommended. Her closing state- ment summarized the type of preparation a librarian can make in selecting or evaluating a ven- dor in a service call.

Concluding the presentations with vendor viewpoints was effective and provoked a lively discussion. Lee kept the conference on schedule by concluding the discussion and making his closing remarks in which he thanked both speakers and audience. He credited Daniel Rich- ards with proposing the theme of collection measurement and analysis for the 1992 program and invited all to return for that meeting. Based on the high quality of the 1991 program, many attendees are certain to accept his invitation.

REFERENCES

1. Van House, Nancy A., Beth T. We& and Charles R. McClure. Measuring Academic Library Performance: a Prac- tical Approach. Chicago: American Library Association, 1990, vii.

2. Houbeck became director of the University of Michigan, Flint, library on July 1, 1991. 3. Gilder. George. Microcosm: the Quantum Revolution in Economics and Technology. New York: Simon & Schuster,

1989, 39. 4. Nisbet, Robert. Degradation of the Academic Dogma: the University in America, 1945-1970. New York: Basic

Books, 1971, 73. 5. Pieper, Josef. Silence of Saint Thomas. Chicago: Regnery, 1965.24.