To begin the discussion at each session, the attached outline of cost categories (identifying every sector in the value chain’s primary value-added activities) was displayed for comment.
Ross Atkinson, Associate University Librarian, Cornell University. He is responsible for collection development, technical services, and preservation.
Malcolm Brown, Doctorate in Humanities, Dartmouth College. He works with their full text, information retrieval system (in conjunction with the library).
Bessie Hahn, University Librarian, Brandeis University.
Gary Strong, Director, Queensborough Public Library.
Susan Phillips, Associate Director for Technical Services, University of Texas at Austin. Her responsibilities include networked information services and other technical responsibilities.
Gail McMillian, Director of the Scholarly Communications Project, Virginia Tech. Publishes electronic communications and experiments with electronic thesis, dissertations, and an electronic reserve system.
Mike Eley, Associate Vice-Provost for Information Systems and Computing, University of Pennsylvania. He is responsible for coordinating academic computing, end-user services, and central systems. He is also a co-chairman of a campus-wide committee on electronic publishing and interactive technologies.
Jerry Munoff, Deputy Director of Libraries, University of Chicago.
Debbie Masters, Interim University Librarian, Georgetown University (has accepted a position at San Francisco State University).
To begin the session, the group viewed the preliminary list of functions that “Buyers” (as a group) perform in the value chain. These included: Selecting; Acquisition/De-acquisition (cancellation); Intellectual Organization (including the preparation of surrogates or representations); Storage; Preservation and Archiving; Training, Retraining, and Support (customer/staff); Access and Delivery; Diffusion (publicity); and Administration. The group was asked to add new functions, remove those functions or activities they no longer perform (or for which they do not have a corresponding cost), and define the list of functions and activities into terms they commonly use (and will be able to assign costs to).
Buyers identified the following areas as important cost centers that should be considered.
Diffusion: The spreading of knowledge of availability (promotion or marketing what is available within the community). Information about what is available.
Delivery: Access and delivery of the primary content of the information.
Surrogates stand for the actual item (representations of the actual item, i.e. a marked record). The ways in which surrogates are related to each other is a second function. The activity or skill to perform this “linking” requires what librarians term “intellectual organization.” Comparing indices with catalogs is one illustration of the difference between the two functions. Surrogates are merely representations and could be prepared automatically by a computer program. However, providing links between representations requires human effort (intellectual organization). There are many ways to add value to surrogates (hyperlinks to other information sources is one way, home pages with online catalogs, and links to actual “topics”–not just to the bibliographic records–are others).
Surrogates are constructed to allow buyers to perform different intellectual organization functions easily (by organizing or managing the information). Buyers indicated that many publishers have the capability to begin performing preliminary intellectual organization functions (that buyers are now forced to perform) if they would tag information so it could be organized by them mechanically. Less buyer intellectual organization time (and cost) would then be required to “fine tune” the information and tailor it to the community being served.
The debate continued as some buyers felt that “preparing or acquiring surrogates” should be recognized as a function under “intellectual organization” and not as its own discrete step in functions buyers perform.
Other buyers disagreed and defined “the preparation of surrogates” as a distinct part of the process. The employment of intellectual organization is the inclusion of a selection process–as the information is now organized (for easier use), becomes searchable, and has additional applications. These buyers believe that while “intellectual organization” and “preparation of surrogates” are in different conceptual classes, surrogate preparation can be placed under intellectual organization–especially when discussing the “historical model.” In the historical model, surrogates are end-user products because they are made available to the public. The fact is that buyers hold items of information which must be accessed (or linked somehow). The method that has developed where buyers refer to information has been to create a name and arrange them to make them available to everyone who wants them. There are distinctions between surrogates, however. The differences are not as important or as critical as other distinctions.
Intellectual organization is the main difference between the historic and emerging models. It is also a function which is very difficult to distinguish in a budget. Many buyers believe (in the emerging model of electronic information) that intellectual organization will become even more important and challenging than in the historic model. Nevertheless, surrogate preparation has become simpler with the aid of electronic information sources and tools–yet still remains in its early stages of development (access tools rather than intellectual organization).
Acquisition includes licensing access (and not just ownership). Even in the historic model, acquisitions costs were present, whether buyers were renting multiple copies or buying them. Costs are much different now–for example, buyers are working closely with attorneys (who were not included in most print acquisitions).
Add the cost of re-training (or additional training) of existing library staff.
There are administrative, personnel, and management cost for all buyer value-added activities (in both models).
A cost category which spans all buyer activities–especially those that are difficult to assign in any one “function” area or that are central to the day to day activities of all functions (the capitalization of telephone lines and computer equipment, for example).
Buyers would include “staff” costs (the people providing reviews and making decisions) and tools for selection (book reviews, citation indexes) as well. Area studies and acquisition/selection trips are other selection costs. A vendor’s approval plans (assessing books and setting-up profiles or other products) should also be considered. Opportunity costs (storing things not being used, for example) and gifts also have costs to buyers (a staff member must sort through each gift item to decide what to keep and what to dispose of and then have it cataloged.
Many buyers claim that it will be difficult to define their budgets in these terms. “All of these items may be somewhere on my budget, but they would not be on a traditional collections development budget.” Most buyers did indicate, however, that they would be able to identify some (but not all) costs–having particular difficulty with many items in their “selecting” function. In many cases, buyers simply do not define costs by function/activity.
Tools (such as book reviews), vendor approval plans (profiles, assessing, etc.), gifts, opportunities (both those lost and taken), and costs associated with the interface with faculty are all buyer costs assigned to the selecting function (several others identified by participants have been placed in G&A, i.e. staff).
Materials budget. The cost of materials (including shipping and handling), the preparation and filing of dynamic publications (looseleaf services in a law library, for example).
Buyers indicated two distinct types of acquisitions–one to purchase books, monographs and other “single-order materials” and a second to purchase serials, continuations (looseleaf or dynamic publications), and periodicals. Much of the measurable buyer cost here is generated by staff or is staff-oriented. Some librarians believe that networked information may replace much of the staff cost–although it may prove difficult to track the change over time. A new CD-ROM, for example, replaces staff filing costs as the CD is updated automatically. Another example is the change from index cards to an online system to check-out and monitor collection materials.
The preparation and filing of dynamic publications (looseleaf services in law libraries, for instance), the library’s check-in and collection monitoring system (index cards or online) and legal or regulatory costs were all indicated by buyers as important costs.
Staff costs for shelving and re-shelving materials. Transportation costs (to and from remote storage, for example). Specialty supplies related to storage (inks, labels, bar codes, etc.). Security, special climate control, and use of a unique locator system, are all costs specific to the storage function.
Off-site or specialty storage space and furnishings. Specialty staff, transportation (to/from remote storage, for example), and supplies (specialty inks, bar codes, etc.). Individual and/or separate operating, security, climate control, equipment, and unique locator system costs should all be considered.
Specialty staff, binding, format replacement (reformatting to microform, for example) and other specialty supplies are the dominant buyer costs associated with this function/activity. Specialty environments (fumigation, for example), special transportation costs, disaster recovery, and other contractual costs should also be placed here (the requirements of map and manuscript restoration, for example). In addition, records management and management or coordination of the institution’s participation in a library system–and providing archival services to parent, state (SUNY or California State), or other municipalities–must be identified as they are significant costs to many buyers.
User support (both internal and external support) should also include costs borne in anticipation of an actual need (training) as well as costs at the moment of the need (support). Curriculum development (for example, traditional bibliographic instruction) and consultants (external trainers like OMS from ARL, for example) are several examples of training and support costs. The cost or travel and specialty materials were also identified by buyers as important cost considerations.
At present, there is not a very robust marketplace providing buyers with training and support materials or activities. For the most part, buyers have developed their own programs and applied them to their organizations (although professional associations do provide some support). This is also true for users (even more) than for training library staff. Teaching users to use products properly is the most common type of support training available.
Curriculum development and consulting (external trainers) are the largest cost components to buyers of the training and support function. Additionally, many libraries are forced to provide much of the training and support themselves, as there are few providers of training materials and services–especially with regard to specialty services and materials.
Access tools (abstracts and indexes, for example), reserve room specialty supplies, inter-library loan and document delivery, microform readers and printers (and other specialty machines and equipment), royalties, permissions, legal and regulatory costs, and the cost of negotiating agreements for documents and access to information online are the primary cost areas to buyers under this activity/function. In addition, buyers indicated that specialty publications deserved mention and consideration when discussing their access and delivery costs (newsletters, bibliographic references, book lists, displays and exhibits at conferences and shows, are several examples).
OCLC (and other tools or storage management utilities), specialty equipment, and the software to manage surrogates that arrive from other sources are primary cost areas.
In the past, librarians failed to control the marketplace by not dictating the format for the organization of serial publications–especially journals. Abstracting and indexing publishers filled the void in the market and librarians were left with managing bibliographic material. Many buyers would prefer a more commanding role in the new electronic information environment–especially with regard to the intellectual organization of information.
It is argued by many librarians that intellectual organization will become a much larger cost in the future. In many buyer institutions, intellectual organization has always been the greatest part of the cost structure (New York Public Library Catalog and Library of Congress subject headings, to name just two). Suddenly, now, there are tools (GOPHER, for example) where a buyer can develop his own organization. Intellectual organization is one of the few areas where a library can specialize and not have competition from areas outside library community. Cataloging is a primary strength at most libraries.
It is a large part of what the library does (especially in the historic model) and while technology has altered the ground rules it has created an opportunity. For example, buyers have performed intellectual organization on tangible physical objects that, in the past, were owned by the library (marked records, bibliographic, catalogs, etc.). The concepts are changing (as often the items are not physical objects or they may not be owned by the library). However, buyers (and users) still need access to them. It may be for these reasons that libraries remain very concerned about control of this function.
Infrastructure for each function or activity performed by buyers (telephone, operating costs, supplies, paper, pencils, pens, are only a few examples). Others include costs associated with the physical library building and its maintenance. General and Electronic equipment (typewriters, copiers, and computers–including maintenance), travel including shows, conventions, and selection trips. Staff (selection staff, acquisitions and de-acquisitions staff, bibliographers, etc). Other furniture and staff equipment. Travel costs (area studies, for example). Accounting, management, bookkeeping, and financial management (including any interface between library and parent organization or library system). Gifts (including transportation and special storage, if necessary). And other general and administrative costs that were not identified by buyers at the session (as this was not a discussion area).
The emerging model is one of many possible models of information handling. For this session, buyers were asked to assume that a mixed model would exist for the foreseeable future. By “mixed,” we mean to some degree (or for certain products), different models of information access and delivery will co-exist.
From the perspective of the buyer, the future publishing model will appear as: 1) buyers will purchase and distribute some products which employ a totally historic model (analog manufacturing and distribution), 2) buyers will purchase some products where the means of manufacturing, or updating, is performed digitally–but the product is still the same print product (modernized model), 3) and digital information which is delivered digitally to the user.
Simply put, from a user’s point of view, digital technologies will have the capability to deliver some products and services directly to the user. The user, on the other hand, may access information in any way they choose (analog, digital, or print).
In a digital information model, the library would only have a cost of acquisition. As users encounter the information electronically over networks, rather than paper as the output of the value chain (although often users may fabricate print copies), acquisition costs would be limited to electronic costs.
Since it is the scholarly, research, and professional users that most concern us in this discussion, public librarians identified an entire set of users who do not use employ electronic services. From a user viewpoint, those who access information in public library settings will not be part of this environment. The definition of “scholarly information” was also an issue with another librarian (as she recognized that much of her collection was not considered scholarly).
Buyers are divided into two distinct points of view over the role of the library in managing networked information–especially with regard to “selecting” material. One faction sees the academic library as assuming responsibility for selecting materials, while others feel that users will assume that responsibility. The reason some buyers feel the library will select materials is that, with the wealth of information available, users will be overwhelmed unless it is managed and pre-selected to some degree.
Still other buyers view this area as an acquisitions function. Providing access to individual units of information that the buyer requests is an acquisitions function. These librarians feel that if a database has been arranged in such a way that users know what is available, then the user is capable of requesting access and it then becomes the library’s acquisitions function to provide access. There are circumstances in which the library provides access (to the Internet) but not to what the user can find on the Internet. The library provides the “gateway,” yet the user pays for the services. Nevertheless, even when only providing access, there is cost to the buyer.
The two systems now compete and libraries are forced to choose their overall roles based upon financial management and budgeting necessities and their role within the organization or institution. This is quite a volatile area (mostly because of control over information). For example, some online newsgroups are inaccessible to library users, while others are fully accessible–and decisions are often based only upon cost.
The entire mission of the library is also being revaluated at many institutions. (A common question is: “Should users select materials– after all each department has always had a small individual collection?”) It was for this reason that most libraries were designated “an overall benefit to the entire university” and charged to gather, catalog, manage, and distribute publications efficiently. However, given the changing economics of networked information, it is difficult to determine which direction is superior. It is important to note that libraries do not now (and never did) offer access to everything–a statement that will not change in the foreseeable future.
This is what many buyers call a mixed model of “centralized” and “decentralized” information access. Most believe it will prevail into the future. In some instances, information will be centralized (access will be “held” through the library). In others, access will be decentralized (based upon individual department need and under separate agreement than the library). For some information, access could be from both avenues.
There are benefits and risks in each model. In a centralized system, for example, buyer travel costs may vanish (travel to acquire material for the library, for example) as material could be placed online.
If information is held locally by the library, then the buyer could foresee an increase in storage and computer space costs. Should information be held remotely, then the library would not see an increase in storage or space costs. In terms of physical space, the square footage necessary to hold information will decline–regardless of the type of model in effect.
New costs will emerge. Coordinating the holdings of different decentralized departments with the management of stored centrally accessed material would add new costs to the library. “Who will hold what” will be decided by staff selection. Most feel that the selection process would become more difficult and more costly or, at the very least, just about cancel any cost savings.
Most librarians believe that users will occupy a much greater share of the selection costs in a new decentralized environment. Those selection costs will be subsidized by the institution in much the same way they are subsidized now. Selection costs that were previously assigned to library staff will now become a cost to the user (at least in terms of time and training).
In either case, the selection process itself will change drastically–as librarians and end-users will certainly employ different selection criteria. For example, librarians will select only a limited number of items (rather than many) from a publisher and will negotiate access to others when required by demand.
Opponents say the problem with this model is that it chooses an item from a limited number of items and does not consider the explosion of information on the Internet. The time necessary just to select items to choose from (let alone finding the appropriate one) will drive overall costs upward–even though buyers may still only purchase a single item.
If technology allows decisions to be made in a decentralized way, then decision information costs will decline (selectors will not have to chase-down faculty), yet agency costs will increase (as librarians will spend more time making sure that the decisions being made are in accord with community standards).
There are strong ramifications in the decentralized model in terms of cost. For example, overall costs to the buyer associated with negotiating site licenses and other agreements for networked information are likely to increase. Should each department negotiate independently, legal fees and service costs undoubtedly will greatly increase. Several participants have already experienced this new phenomenon and have found that, while selections were decentralized, some costs (especially legal costs) re-emerged centrally. One interesting outcome is that the selection process at many institutions has grown in complexity because of the need for input (if not consensus) from each department or academic community. There are significant costs to the library in managing the selection process in the new electronic environment.
Most buyers feel selection sources will exist in the future and that costs associated with them will increase. Should the library be forced to create them (traditionally not an activity performed by the librarian)–then costs will certainly increase. Buyers could foresee selection source costs declining as vendors shift resources online. If selection sources become decentralized, then they will not have anything to do with the library and, subsequently, selection sources will be employed and paid by the user.
Years ago, academic libraries assumed selection responsibilities for the user (for many reasons–one of which was that users did not select in a balanced way). In an electronic world, this approach may no longer be true. Institutions are now selecting networked information and network suppliers rather than networked publications. Buyers now select how the user will access available information as much (or more) than what they can obtain when there.
If “selection” is deciding what to get, then “acquisition” is the getting of what was selected. This new model may shift the cost of selecting to the user. Many librarians feel that their costs should cover intellectual organization as well as training and support in the overall buying system. Travel and storage costs should decline as libraries alter their thinking (from storage in square feet to storage in gigabytes). However, along with these cost savings, coordination costs will increase–especially in resource sharing situations (reference decision information vs. agency costs, i.e., Gurbaxani and Whang).
Libraries have the ability to select articles–rather than journals (one example of declining costs to the library). Many questions must still be answered. “What if every department has to negotiate a license?” for example. In response, many site-license negotiations are being handled by the library. Additionally, should libraries be forced to create source materials (an activity that has been moved to others), library costs will increase.
Additional equipment will be needed to provide greater access to files. However, there will be greater benefit for each equipment unit. Cost transfers from the library to the end-user (or to the parent organization) may also occur. Many buyers have already seen that travel, storage, and square-footage costs will significantly decline. Staff costs may increase (even in a decentralized environment)–especially if “agent” technology (knowbots or other intelligent search agents) become widespread. Overall, most librarians agree that their costs should remain, at least, constant in the near future–or increase slightly.
Approval and vendor plan costs may decline, or be shared or transferred to other members of the value chain. In any event, approval plan costs to the buyer are not included in costs of selecting (and may move to another buyer function/area–possibly acquisitions).
Buyers indicated that costs for both the centralized and decentralized models should be discussed. In a decentralized model, some costs previously associated with library acquisitions will be assumed by the user (and removed from the library).
A decentralized acquisition process is one in which individual departments would acquire their own information. For example, the surgery department or biological sciences department have individual accounts on an online service (Medline for example). Each funds its own area, negotiates individual contracts and arrangements, and accesses its information through its own system (a Netscape Homepage, for example). In this scenario, there is no access allowed through other campus systems, departments, or library sources.
In the aggregate, costs would be tremendous and likely not justifiable–as an individual library building for each department would also be unjustifiable (and this would be the same process electronically). Six different accounts (from a single university) on Medline would cost far more than a single account–with six different areas (owing to quantity discounts). A single contract for all to negotiate and sign is far less expensive than four sets.
Generally, acquisitions staff costs are likely to increase as staff are introduced to new skills. There is no parallel between this new environment and the historic model print library. Buyers anticipate requiring fewer clerical staff and a greater number of highly paid and trained staff. “Traditional” staffing level (for example, those who worked with monographs only) will be accessing monographs and using other media as well, since there will be fewer hard-copy subscriptions to manage. While there is much debate, many librarians anticipate that materials costs will increase greatly (if past experience applies). Subscriptions (books and journals) will be accessed in many different ways (in pieces, for example), and each one will cost more (as is the case with most access to electronic material).
Librarians who disagree believe there are scenarios where (at least) areas of material costs will decline in the future. For example, licenses for subscriptions (at a base cost and a unit cost for access–provided it is not a site license) will decline. These librarians offer that history may not be the best judge, suppliers are modernizing and that reduced costs will eventually be passed along to them. Additionally, they argue costs may begin to decrease, especially with new agents in the marketplace providing information at reduced costs (scholarly societies, for example).
Several buyers proposed that a new model for the distribution of creative efforts could emerge in the new environment created by electronic publishing.
- Eliminate/reduce the importance of the library. A business office at a university could connect users with producers (for materials available online).
- Eliminate the publisher. Connect authors to readers directly.
- Internet as intermediary. Between users and producers there is only a search engine or agent.
- Networked licensing. Traditional model but the network is licensed (telecommunication companies and cable companies) replace the buyer.
- University as publisher. The university’s own system creates, disseminates, and also uses the electronic information. Many librarians are frustrated by the process of the faculty of the university creating data, then giving it away, only to have to buy it back again.
From the buyer’s viewpoint, STM publishers have seen the marketplace of the past as low volume/high price. That economic model has come to an end and a new one is being encouraged–high volume/low price.
Some buyers feel this model is based upon a misconception–publishers view a “unit” as a “user.” This perspective is not shared by buyers. Buyers believe that publishers may not be able to produce the small volume of specialized materials required by the library to meet “high”-volume economic models. If that is the case, libraries will be forced to do something to augment electronic materials produced by publishers–at additional cost.
A decentralized acquisition process may cost buyers much more than current models. For example, six different Medline accounts (each falling below a minimum discount level) would be very costly–as would the six sets of negotiations, legal fees, and training and support classes.
The way buyers manage this process should not be by restricting access. Instead it should be in making good access decisions. In the future, it is likely that users will make item selections and institutions will make source selections. To manage this new model, however, different staff, equipped to handle networked information and legal and technical details are necessary. Generally speaking, these librarians are also more expensive (as well as more highly trained) than those they will replace.
Many librarians have soured on the publisher/library relationship of the future. Spending more of their budgets on highly skilled administrators and staff (or in retraining existing workers), employing additional technical staff members to maintain new electronic infrastructure, and the possible reduction in clerical help (as supervisors claim fewer print magazine subscriptions warrant less clerical staff), will further stress library budgets and working environments. Historically, many librarians claim, publishers have taken such an opportunity to increase prices. Regardless of any reduction in publisher costs, publishers will claim to add more value (or repackage existing materials) and actually increase buyer costs.
The new marketplace is expected to be high-volume/low-price, yet buyers cannot yet see instances of sustained “high”-volume practices in STM publishing. Another difficulty buyers face is internal fund accounting. At present, it is very microscopic and territorial, especially when databases (rather than print items) are the primary products. Additionally, the library’s interface with the university’s accounting system needs to be improved.
Buyers now reformat (when converting to microform). In an online environment, buyers will also digitize information. However, costs are not similar when discussing digitizing information.
When buyers discuss storage costs there are two areas to consider: new information on a network, and older materials that must first be digitized in order to mount electronically. These employ two different cost structures. Preservation sparks the conversion of print materials into digital form (and some buyers argue it is a form of selection). Another factor to consider is the construction of a national information archive. A company could pay to subscribe and thus unburden the library of digital storage requirements (similar to sending materials to UMI for reformatting). Buyers identified many costs that relate to the storage issue (selecting, acquiring, and processing).
Operating expenses (telephone, photocopying, etc.) are they directly related to staff costs? If you have unique resources at an institution how are they digitized? They must be a cost set aside for that activity.
Costs associated with refreshing information should be included in the original fees paid to archive material, as most libraries indicated they prefer not to have annual costs for refreshing information. Buyers expect publishers to begin archiving electronic information. Buyers could see additional costs associated with specialty supplies, while environment costs and transportation costs should decline–but only for the conversion of historic materials.