2016-10-27

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Costs associated with maintaining quality academic

library and information servicessupporting both teaching and research

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AuthorsMs Laila Vahed and Mr Glenn Truran

VahedL@unizulu.ac.za and director@sanlic.org.za

Presentation Roadmap and key assumptions

• About SANLiC, the role it plays and why it is working• Access to high-quality scholarly electronic information is the lifeblood

of research, teaching and learning in Public Higher Education and Research Institutions

• High-quality scholarly electronic information is costly• Library collections budgets are declining in real terms leading to

cancellations of resource subscriptions• Currency depreciation in past five years has had a serious impact• If financial support is not increased urgently institutions will decline

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National umbrella coalition

• Coalition of South African Library Consortia (COSALC) – 2003

• South African Site Licensing Initiative (SASLI)

• South African National Library and Information Consortium (SANLiC) -2006/2011

• 25 universities, • two new entrants

(Sol Plaatje + Mpumalanga)• six national research councils

(SANRIC)• National Library of South Africa

(NLSA)

• Clients - two universities in neighbouring countries

• Largest university >100,000 FTEs• Small research councils <100

researchers• Open to other public entities

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Why a library consortium?

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SANLiC – the “buying club” for libraries

• Assists member (and client) institutions to acquire better value-for-money digital collections than they could individually.

• Working on a non-profit, cost recovery basis.

• Harnesses the collective buying power of member institutions to negotiate and secure electronic license agreements for digital content.

Key Collaboration elements:• Collective buying power• Open Access• Information Sharing • Economies of scale

• Legal due diligence• Negotiations

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Harnessing buying power

• Cost avoidance – value for money

• Group Discount and / or savings• Big deals

(Four for the price of two)• Tiered pricing structure

(size counts)

• Lower annual increases

UKZN – 2003 Database Discounts

Saving / Discount

Consortium Price

ATLA Religion database + 73% 27%

Beilstein/Gmelin 60% 40%

EbscoHost 81% 19%

Global books in print 55% 45%

INSPEC 5% 95%

Oxford English dictionary 75% 25%

Web of Science 37% 63%

Average 57% 43%

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Tier FTE InstitutionsLarge > 30,000 6Medium < 30,000 10Small < 15,000 7X Small (Research) < 1,000 8

Deal with the devil

“In short, the Big Deal turned out to be a cuckoo: Once in the nest, it tends to consume everything, throwing out the other fledglings in the process.”

Richard Poynder in his article“The Big Deal: Not Price But Cost”

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By Harald Olsen - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1887345

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SANLiC 2016 Renewals - % Increase on Measurable Deals

• Number of deals analysed = 30

• Excludes new deals (no baseline)

• Average Increase = 2.16%

• Average “Positive” Increase = 3.29% (n=28)

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Opt-out clause

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8.2 The Institution may terminate this Agreement without penalty upon thirty (30) days’ notice given by the Institution to [Publisher] if sufficient institutional funds are not allocated to permit it, in the exercise of its reasonable administrative discretion, to continue its Agreement. Notwithstanding the foregoing, if access to the Licensed Material was provided but not yet paid for prior to termination, [Publisher] shall be entitled to receive a pro rata portion of the Fees attributable to the period of time that access was provided.

Comparison 2003 – 2016

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DatabaseSaving / Discount

Consortium Price

Saving / Discount

Consortium Price

ATLA Religion database + 73% 27%Beilstein/Gmelin 60% 40% 23% 77% -37% ↓EbscoHost 81% 19%Global books in print 55% 45% 40% 60% -15% ↓INSPEC 5% 95% 21% 79% 16% ↑Oxford English dictionary 75% 25% 19% 81% -56% ↓Web of Science 37% 63% 74% 26% 37% ↑Average 57% 43% 35% 65% -22% ↓

2003 2016 VarianceChange in

saving

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Key Takeaway 1 – Declining Subscriptions

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Key Takeaway 1 – Declining Subscriptions

• Inflation on scholarly electronic information

• 2014 change in VAT on electronic goods

• Depreciating Rand• Big Deal Package creep• Tier creep?• Annual Increases

• Declining state subsidy per FTE• Inflation on other HE institution

input costs (rates, electricity)

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Key Takeaway 2 - Cost Avoidance

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Key Takeaway 2 - Cost Avoidance

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• 2016 → Consor um Price = 19%

• 2003 → Consor um Price = 43%

• 2016 → Cost Avoidance = 81%

South Africa–Declining purchasing power• Majority of subscriptions are

invoiced in foreign currency -USD ($), EUR (€) and GBP(£)

• Rand (ZAR) depreciated,• 33% against the US dollar ($), • 21% against the Euro (€) and • 31% against the pound sterling (£)

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Exchange Rate Fluctuation –ZAR per 1 USD (1970-2016)

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1970-01-01 = 0.632016-01-04 = 15.64

• 2011-01-03 = 6.62 • 2016-01-04 = 15.64 (136%)• 2016-10-05 13.74 (108%)

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Currency Inflation and CPI Inflation?

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• 2015-01-02 = 11.62 • 2016-01-04 = 15.64 (35%)• 2016-10-05 13.74 (18%)

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Key Takeaway 3 - Internal Rate of Return

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Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. Internal rate of return is used to evaluate the attractiveness of a project or investment.

Date 1 USD / ZAR Period Period Exchange IRR Inflation IRR

2003-01-01 R 8.57 2003-2016 13 Years 4.73% 5.53%2006-01-03 R 6.30 2006-2016 10 Years 9.52% 6.15%2011-01-03 R 6.62 2011-2016 5 Years 18.72% 5.39%2015-01-02 R 11.62 2015-2016 One Year 34.35% 4.57%2016-01-04 R 15.64

Library Collections Budget Proxy

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Internal Rate of Return

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Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. Internal rate of return is used to evaluate the attractiveness of a project or investment.

DatabaseMarket value in

RandsConsortium pricing

Market value in Rands

Consortium pricing Market ValueConsortium

pricingGlobal books in print R 27 438 R 12 438 R 59 716 R 35 834 6.16% 8.47%INSPEC R 133 720 R 127 576 R 484 600 R 384 610 10.40% 8.85%

Oxford English dictionary R 14 936 R 3 736 R 129 554 R 120 283 18.05% 30.57%

Web of Science R 449 350 R 283 236 R 4 742 997 R 1 407 322 19.85% 13.11%Total R 625 444 R 426 986 R 5 416 866 R 1 948 049 18.04% 12.37%

2003 2016 Internal Rate of Return

Library Collections

Budget Proxy

Date 1 USD / ZAR Period Period Exchange IRR Inflation IRR

2003-01-01 R 8.57 2003-2016 13 Years 4.73% 5.53%2006-01-03 R 6.30 2006-2016 10 Years 9.52% 6.15%2011-01-03 R 6.62 2011-2016 5 Years 18.72% 5.39%2015-01-02 R 11.62 2015-2016 One Year 34.35% 4.57%2016-01-04 R 15.64

Key Takeaway 4 –Apply IRR to Library and HE budgets

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Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. Internal rate of return is used to evaluate the attractiveness of a project or investment.

SANLiC Mid-year Poll:Have library collections budgets actually declined?

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Percentage of member institutions reporting a…Actual

Increasefor 2016

Budget cut / reduction (between -9.1% and -12.5%) 14.3%Zero Budget increase 14.3%Budget increase between 1% - 10% 19.0%Budget increase between 11% - 20% 33.3%Budget increase between 21% - 43% 19.0%

Totals 100% of respondents

Expected increase for 2017

4.8%38.1%47.6%4.8%4.8%

100% of respondents

Consumer Price Index year-on-year rates (Statistics South Africa - July 2016).

4.6% (2015)

71% 52%

6.3% (2016)

85%

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SANLiC Mid-year Poll: Are you planning to cancel any of your current subscriptions for 2017?

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Are you planning to cancel any of your current subscriptions for 2017?Already done cancelling in recent years 4.8%Yes, definitely 23.8%Most Likely 33.3%Not sure 14.3%Not likely 4.8%No 19.0%

Total 100%

57%

2016 17.50%2017 -36.17%

UKZN Library Collections Budget

Future Scenarios?

• 2013-2014 ↑ 8%(+64)

• 2014-2015 ↓ -9%(-76)

• 2015-2016 ↓ -11%(-83)

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2016 17.50%2017 -36.17%

UKZN Library Collections Budget

+2%

+10%

+16%

+22%

95%

100%

105%

110%

115%

120%

125%

2014 2015 2016 2017 2018 2019SCOAP3 2% 3% 4%

Example yearly subscription cost increases

SCOAP3 contribution vs. subscription costs

Phase 1Phase 2

Open Access – opportunity or threat

• SCOAP3, a CERN partnership• >50% High Energy Physics

publishing• >10,000 articles • Eight journals• One of the Lowest known

average effective APCs• Collective bargaining

• Phase one (€5,500 p.a. for 2014-2016)

• Share of authorship• Phase two (€26,950 p.a. for 2017-

2019)• Saving on subscriptions - ten

journals (€ 78,440 p.a. in 2014) • If South African authors were

directly responsible for paying APCs (an estimated €186,000 p.a.)

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Publishers Libraries / Consortia

SCOAP3

- No change in behavior

- Support OA policies

- Use existing funds

- No operations

Researcher- No burden- Retains the copyright

Reduction on Subscriptions

Icon made by Freepik licensed under CC BY 3.0

The SCOAP3 Business Model

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SCOAP3

Researcher

Reduction on Subscriptions

Icon made by Freepik licensed under CC BY 3.0

SCOAP3 Financials ZA- 289 ZA articles in SCOAP3

- ca. 130 articles / year

South Africaninstitutions

€ 78,400 p.a.

Sour

ce: G

oogl

e M

aps

Phase 1: € 5,500 p.a.Phase 2: € 27,000 p.a.Value of ZA

articles: € 186,000(each year)

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Cost Avoidance

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Euros€ 162 870 815

€ 30 433 768€ 132 437 046

Open Access – opportunity or threat

• Negotiate Article Processing Charges?

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Open Access Scenario

• 2016 SANLiC Consortium Price = € 30m

• Estimated Worldwide Publishing Market = € 7.6bn

• SANLiC = 0.39% of market• Key Question: Will South Africa’s

publishing burden go up or down in a switch to Open Access?

• Research output ratio• Subscriptions Volume

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Scholarly Output – Flip to Open Access

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• #2m• 0.69%• 13,800 articles• @ €2,000 pa• €27.6m• Currently

€ 30m• Estimate!

Scholarly Output – Flip to Open Access

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• #2m• 0.69%• 19,224 articles• @ €2,000 pa• €38.44m• Currently

€ 30m• Estimate!

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Centrally Funded National Site Licensing Initiative• Confidentiality of Report• Top Slicing Institutional Funding - no additional funding• Address Weaknesses in current model

• Access to resources?• Better negotiation capability?• Governance?

• PFMA and funding• Role of SANLiC• What will change / improve?

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Future Scenario Options?

Scenario1. Business as usual - no intervention2. Greater co-ordination and

leadership3. Greater co-ordination and

leadership plus appropriate funding4. Centrally Funded National Licensing5. Open Access 2020 – “Flip”6. Online Library

Possible Outcome1. Decline2. Decline but slower3. Optimised outcomes4. Unclear: What will improve? Slower

Response? Less autonomy? Top slicing Higher Education Budgets? Cross-subsidisation? Deck chairs on the titanic?

5. Unclear – more research required. Requires collective action.

6. Unknown 35

Conclusions

• The scope, value and quality of library collections have improved dramatically through the consortium model

• “At the heart of the matter is the fact that access [to higher education] has increased faster than funding”; (paraphrased) Pravin Gordhan, Medium Term Budget Policy Statement , 26 October 20156

• Funding access to high-quality scholarly electronic information is core competency of world-class research and teaching

• Current funding levels are not keeping pace with electronic information inflation• Failure to address the funding will result in a decline in research and teaching

quality and output• More evidence is needed before decisions are made about

• Centrally Funded National Site Licensing• Open Access Policies and strategies

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2016-10-27

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AuthorsMs Laila Vahed and Mr Glenn Truran

VahedL@unizulu.ac.za and director@sanlic.org.zawww.sanlic.co.za