22
Using Return on Investment in Collection Development Larry Nash White, Ph.D. NELINET Webinar April 15, 2009
Using Return on Investment in Collection Development
Larry Nash White, Ph.D.NELINET Webinar
April 15, 2009
Today’s Agenda
What is Return on Investment?
Benefits of using RIO
Challenges of using ROI
Applications to collection development
ROI Defined
Return on investment (ROI) is simply defined as a ratio of resources (usually financial) or value gained or lost in a process/investment/result to the total amount of resources provided.
A positive RIO indicates that more benefit than cost has been generated by the process / investment / result.
A negative ROI indicates less benefit was generated than the resources provided.
ROI Development in Libraries
(1876) Cutter and cost benefit analysis. Outputs most commonly used then and today
1934 Rider and cost studies to maximize efficiency
“if we don’t assess things and do it correctly, then others from outside of the library will come and do it for us.” (Rider, 1934)
Previous Research on using ROI in Collection Development
MacEachern, R. (2001). Measuring the Added Value of Library and Information Services: The New Zealand Approach.
IFLA Journal, (27, 4), 232-236.
MacEachern discusses the use of creating value with collection resources as a way to justify collection allocations and investment in library acquisitions budgets. The model developed was used to demonstrate the value of collection use for the customer.
Previous Research on using ROI in Collection Development
Carrigan, D. (1992). Improving Return on Investment: A Proposal for Allocating the Book Budget. Journal of Academic
Librarianship, (18,5) p292-97, Nov 1992.
Carrigan discusses the allocation of library acquisitions budgets, especially for monographs, focuses on the proportional use statistic (i.e., a value that compares circulation and holdings in a subject area).
Factors influencing use of ROI in library quality assessment today
Resource allocations (justifying, expanding)
Staff Knowledge, Skills, Abilities (KSA)
Increasing stakeholder awareness / involvement with library strategic planning and decision making
Factors influencing use of ROI in library quality assessment today
Technology Technology use needing assessment Technology being used in assessment process
Lack of innovation and research in performance assessment
Always borrowing tools from others Behind the curve (5-10 year lag)
Factors influencing use of ROI in library quality assessment today
Time Time to perform assessment processes Timeliness of assessment process and results
being available
Lack of consistency In assessment processes In interpretation and use
Factors influencing use of ROI in library quality assessment today
More with less: increasing accountability and a diversity of evidence
Cost / financial emphasis
More quantitative data wanted by stakeholders / more qualitative data by profession
Factors influencing use of ROI in library quality assessment today
Wider scope/size service environment to assess and involve in process
Dynamic alignment Using the right resources and knowledge Using the right assessment metrics / processes To answer the right accountability questions
Potential Benefits of Using ROI
Predictive costing tool for large-scale activities in decision making or planning of larger library systems (i.e. library information system, large capital expenditures, etc.)
Primarily used in the areas of assessment of organizational performance or value creation after implementation.
Potential Benefits of Using ROI
Creates a fiscal assessment of service / product delivery
Offensive and defensive uses
Scalable
Potential Challenges of Using ROI
Lack of consensus in values used in constructing values
Used primarily in defensive / reactive position in libraries
Potential Challenges of Using ROI
Not always reliable in intangible value assessment
Not appreciated by libraries as an assessment tool
How can we apply ROI to collection development?
Developing allocations for acquisitions Evaluating success of previous acquisitions Defending allocations budget against
reductions Provide evidence of value creation / impact
on community of stakeholders Demonstrating efficiencies / values of the
collection development process
How can we apply ROI to collection development?
Developing allocations for acquisitions Evaluating success of previous acquisitions Defending allocations budget against
reductions Provide evidence of value creation / impact
on community of stakeholders Demonstrating efficiencies / values of the
collection development process
How can we apply ROI to collection development?
Developing allocations for acquisitions Evaluating success of previous acquisitions Defending allocations budget against
reductions Provide evidence of value creation / impact
on community of stakeholders Demonstrating efficiencies / values of the
collection development process
How can we apply ROI to collection development?
Developing allocations for acquisitions Evaluating success of previous acquisitions Defending allocations budget against
reductions Provide evidence of value creation / impact
on community of stakeholders Demonstrating efficiencies / values of the
collection development process
How can we apply ROI to collection development?
Developing allocations for acquisitions Evaluating success of previous acquisitions Defending allocations budget against
reductions Provide evidence of value creation / impact
on community of stakeholders Demonstrating efficiencies / values of the
collection development process
What ROI applications to collection development can you think of?
