June 2, 2007 Special Library Association Annual Conference

1. Calculating ROI in Special Libraries and Information Centers: Consequences of NOT Having an Information Center June 2, 2007Special Library Association Annual Conference José-Marie Griffiths, Ph.D.Sarah E. Aerni University of North Carolina at Chapel Hill

2. Topics Covered in Workshop • Return-on-Investment (ROI) defined • Two examples of ROI projects • ROI of entire special library • ROI of access to journal collections: print and electronic • ROI methods • Communicating results

3. Role of Evaluation • Planning • Resource allocation and management • Justification of new or existing resources • Advocacy, marketing and public relations

4. Conceptual Framework for Evaluation

5. Object of Evaluation • Library • Function • Service • Activity • Resource

6. Conceptual Framework for Library Economic Measures Measurement Perspectives Library Industry/ Sector User Organization Society

7. Library Industry/ Sector User Organization Society Conceptual Framework for Library Economic Measures Measurement Perspectives Industry/ Sector Specific Measures Inputs (Resources)Amount Cost Attributes

8. Library Industry/ Sector User Organization Society Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Inputs (Resources)Amount Cost Attributes Outputs (Products/Services)Amount AttributesQuality Timeliness Availability Accessibility

9. Library Industry/ Sector User Organization Society Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Inputs (Resources) Usage (Use & Nonuse) Amount Factors affecting use/nonuse Ease/cost of use (price paid) Available alternatives Purpose of use Importance of and satisfaction with attributes of output Awareness Outputs (Products/Services)

10. Library Industry/ Sector User Organization Society Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Inputs (Resources) Usage (Use & Nonuse) Outcomes (Consequences of Use and Nonuse) Time saved Improved learning Improved productivity Improved quality of work Improved timeliness of work Value derived Effects on organization goals Higher order effects Outputs (Products/Services)

11. Library Industry/ Sector User Organization Society Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Inputs (Resources) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain(Environmental Characteristics) Target population User/nonuser population characteristics User/nonuser needs/requirements Externalities Outputs (Products/Services)

12. Library User Organization Industry/ Sector Society Inputs (Resources) Outputs (Products/Services) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Derived Measures Performance

13. Library User Organization Industry/ Sector Society Inputs (Resources) Outputs (Products/Services) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Derived Measures Effectiveness Performance

14. Library User Organization Industry/ Sector Society Inputs (Resources) Outputs (Products/Services) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Derived Measures Effectiveness Performance Cost-Effectiveness

15. Library User Organization Industry/ Sector Society Inputs (Resources) Outputs (Products/Services) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Derived Measures Effectiveness Performance Cost-Effectiveness Impact

16. Library User Organization Industry/ Sector Society Inputs (Resources) Outputs (Products/Services) Usage (Use & Nonuse) Outcomes (Consequences of Information) Domain Conceptual Framework for Library Economic Measures Measurement Perspectives Specific Measures Derived Measures Effectiveness Performance Cost-Effectiveness Impact Cost/Benefit; Return-on-Investment

17. Evaluation Involves Comparison • Over time • Between services • Between the current and the anticipated • Between inputs and outputs/outcomes

18. ROI is a Comparison Compare Returns and Investments • Investments or Costs - to the library (or service within) - to the library user - to the organization • Returns - to the library - to the library user - to the organization

19. ROI is a Comparison Investments or Costs • to the library (or service within): $ spent • to the library user: time and $ spent • to the organization: total time and $ spent

20. ROI is a Comparison Returns Important to distinguish between: outputs - produced as result of expenditure, e.g., larger collection use - extent to which outputs are used, e.g., increased use of library materials outcomes - consequences of use, e.g., learned something new, saved time, etc. Use contingent evaluation

21. Return-on-Investment Defined • Investment • Library expenditures and organization overhead • User time in wages and overhead • Cost of other relevant resources • Return • Contingent valuation of the additional cost to users if there were no library services • Changes in user outcomes e.g., productivity, information needs satisfied, and other relevant indicators

22. Definition of Contingent Valuation • Contingent valuation is an economic method used to assess the benefits of non-priced goods and services (e.g., libraries or specific library services) by examining the implications of not having the product or service

23. Case Study 1:Library ROI (Availability & Use)

24. Investment - Total • Library expenditures • User expenditures • Total organization investment

25. Special Library Investments • Library expenditure • $610 per professional • User cost to use library services • $1,090 per professional • Total organization investment • $1,700 per professional

26. Contingent Valuation - Library Availability • User cost to use library services • User cost to use alternative source for service or information • Net benefit or return (availability) is difference between current cost to use library and anticipated cost to use alternatives

27. Special Library ROI Net benefit or return: User additional cost to use alternatives $5,010 per professional Library ROI (availability) ($5,010÷$1,700) or 2.9 to 1

28. Returns from Library Use • Amount of use of information resource or service • Benefits derived from that use (time saved, $ saved, etc.) • Assume a fixed willingness to invest • When using costlier alternatives, some uses would be “lost”

29. Library ROI • Benefits derived • $310 per journal article reading • $650 per book reading • $1,090 per internal report reading • Total savings across all readings • $31,300 per professional for reading journal articles • $28,000 per professional for reading books • $42,500 for reading internal reports

30. Library ROI • Labor ROI • Labor savings divided by time spent reading • 8.3 to 1 for reading journals articles • 7.9 to 1 for reading books • 14.2 to 1 for reading internal reports. • Overall ROI (Labor) is 8.3 to 1 • Lost Benefits $12,240 per professional • Library ROI (Use) • Ranges from 5 to 1 …. 16 to 1

31. Outcomes of Special Library Use • Special libraries help increase productivity • User time and/or other expenditures are saved in over one-third of library uses • User time and/or other expenditures are saved in about 40 percent of readings of library documents • Five indicators of user productivity are correlated with amount of library

32. Outcomes of Special Library Use • Special libraries contribute to users’ quality of work • Users indicate that that the library services are absolutely essential to their work for nearly 40 percent of uses • Users indicate that the library services improves their quality of work in nearly 60 percent of uses • Users whose work has been recognized through awards, etc. use libraries more than cohorts and non-award winners

33. Case Study 2: Library Journal Collection ROI

34. Trends in Special Library Journal Collection Use • Examine patterns of information seeking • Examples of scientists and engineers • Amount of journal reading by scientists is up • Reading from special library journal collections is up • Increases due in part to electronic journals

35. Patterns of Information Seeking • Focus on article reading • Time spent reading • How read articles are identified • How the articles are obtained • Format of the articles • A trend in the influence of libraries • Effect of e-journals on library cost

36. Many Ways to Identify Articles • Browsing through print or electronic journals (mostly for current awareness) • Searching in search engines in bibliographic and e-journal databases (mostly for research and writing) • Follow-up of citations in journals and other publications • Recommendations from colleagues, etc. • Other (e.g., alerts, preprint services, etc.)

37. Many Sources of Articles • Personal subscriptions • Library collections • Authors, colleagues, etc. • Other

38. Where Do Readers Obtain Articles? Trends

39. Amount of Reading Depends on Where Readers Works • University scientists average reading more than non-university scientists served by special libraries • University scientists: 252 readings/year • Non-university scientists: 113 readings/year HOWEVER • Non-University scientists account for 75 percent of all reading in U.S. AND • University scientists write nearly 75 percent of articles published by U.S. authors

40. Trends in Reading Patterns of Scientists Served by Special Libraries • The appear to be reading more • They rely on libraries more • Reasons for increased library use

41. Average Annual Reading by Scientists Served by Special Libraries

42. Average Annual Reading by Scientists Served by Special Libraries by Source of Articles Read

43. Reasons for Shift to Reading from Special Library Collections • Decrease in personal subscriptions • More reading of articles identified by online bibliographic searches • Electronic collections have broadened access to articles

44. Average Number of Personal Subscriptions per Scientist

45. Average Number of Articles Identified by Online Search

46. Electronic Collections Contribution • Personal subscriptions - 90% print • Library collections • 80% electronic • Broadens journal availability • Saves readers about 20 hours per year • Breadth of reading has increased • Read from about 13 journals in 1977 • Over twice that amount now

47. Library Journal Collection Investment • Library expenditure (amount allocated to faculty and staff use) • $1.87 million • Faculty and staff cost to use the library collection • $1.56 million • Total organization investment • $3.43 million

48. Library Journal Collection Return (Availability) • User cost to use alternative sources of article information ($11.38 million in time, $2.1 million in purchases) $13.48 million • Return/net benefit ($13.48 million - $3.43 million) $10.05 million

49. Library Journal Collection ROI (Availability) • ROI (Availability) ($10.05 million ÷ $3.43 million) 2.9 to 1 PLUS • Potential lost benefits in savings, productivity, etc.

50. Library Journal Collection Return (Use) If the journal collection were not available, professionals said they: Did not know 37% Would use another library 28% Would use another source 21% Would purchase the item 6% Would take another course of action 8%