Recommendations: Part II, Developing a Business Case

tfons

July 20, 2012

¶ 1 Leave a comment on paragraph 1 0 Building what is referred to as a business case is a set of steps to enable sound decision making for creating a new service. While libraries’ goals differ from those of corporations, it is helpful to remember that the basic reason for planning in business is to ensure success, however success might be quantified. The structure for building a business case described here borrows heavily from Maul (2011) and is adapted to reflect the research library environment.

¶ 2 Leave a comment on paragraph 2 0 Step 1: What needs to be accomplished? Creating an outcome statement
The first step in case development is to create a very basic objective. Services and solutions need parameters. The outcome statement begins the process of setting parameters that help define the need and the scope of possible solutions. The creation of an outcome statement also begins the process of tying the development of a service to institutional goals and mission and identifying the desired impact that the library seeks to achieve through the new program.
The basic outcome statement is written to envision how a problem might be solved or a need met:

¶ 3 Leave a comment on paragraph 3 0 The Library will provide data management services to assist the University in meeting its 2020 goal of opening its infectious disease research data to scholars around the world.

¶ 4 Leave a comment on paragraph 4 0 The Library will provide digital publishing services to enable the College to showcase faculty scholarship.

¶ 5 Leave a comment on paragraph 5 0 As these example demonstrate, the outcome statement identifies how a service enables the library or its parent institution to reach important goals. Outcome statements should reference key library or institutional metrics, strategic goals, or other signature institutional initiatives.

¶ 6 Leave a comment on paragraph 6 0 At this stage the outcome statement is a broad brush that does not specify a particular solution (e.g., “Install Open Journal Systems”). It must be written to reflect the library’s mission and to take into account organizational culture and the priority assigned to stated goals and objectives. What are the plans to meet a specific institutional goal? To what extent is the library considered a key player in helping to achieve institutional goals? Does library leadership have the ear of top administration? How does a new initiative enable the library to further its mission? The outcome statement should be accompanied by clear and measurable objectives that can be assessed over time: a data management service might respond to an internal goal of increasing NSF awards by 15 percent by providing a framework that meets new NSF requirements for data management plans. A college might want to increase its faculty’s publications, and publishing services might assist in expanding these by 10 percent. Establishing basic metrics at this point lays the groundwork for assessing the success of a project after implementation.

¶ 7 Leave a comment on paragraph 7 0 Step 2: How can it be done? Identifying options
Once the desired outcome has been clarified, a list of all possible options for action should be developed. This stage of case building should follow two rules:

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• Brainstorm every possible option, not just preferred directions, including maintenance of the status quo: “Do nothing.”
• Collect ideas from stakeholders, especially—but not solely—the target audience.

¶ 9 Leave a comment on paragraph 9 0 Talking to stakeholders (faculty, students, research officers, publishers) will produce more ideas than the library might generate internally and will give critical insight into what the library’s users or potential partners identify as valuable to their work. This step also connects any new service development to shared goals, matching the library’s perception of need to actual user demand—this is where the market research necessary in building any service should begin. What does the library’s user community really need? Do they want a prospective service from the library, or do they want it from another source? This highly important step is sometimes missed when libraries implement new services, such as institutional repositories (Choudhury 2008). This step is also the first stage in creating a value proposition, a clear statement by which users are able to see if a service or product has greater value for meeting their needs than its alternatives (Lanning and Michaels 2006).

¶ 10 Leave a comment on paragraph 10 0 Once a full list of options has been generated, library leaders should consult with advisors and key stakeholders within the institution who will be affected by service development as well as those from whom the library will need to request resources. In addition to preparing significant individuals for future conversations on a specific project, and to hear their initial thoughts on various options, this is the best moment to reveal their perceptions of any weaknesses in planning or in the library’s ideas, well before advanced planning is finished and investment is sought and implementation begins. This is particularly crucial in the development of services, especially in the area of data management, where the proposed financial model may be drawing funds from faculty research grants or other income streams beyond the library’s control or area of influence. Such models require institutional policy changes and, in the absence of conversation to build broad buy-in, may be rejected out of hand.

¶ 11 Leave a comment on paragraph 11 0 Finally, the options should be narrowed to a short list of possible courses of action. This is best accomplished by:

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• Choosing those options that most match stakeholders’ expressed needs and institutional objectives and create appropriate impact
• Merging similar options into a single possible solution
• Reviewing how specific options have succeeded—or not—at other institutions
• Eliminating those where the degree of risk is greater than institutional tolerance
• Favoring those that are sustainable over the complex, costly to build, and difficult to scale

¶ 13 Leave a comment on paragraph 13 0 At this point in developing the case for service development, options are not written in stone. Further investigation and conversations may cause the library to eliminate what seemed like a positive direction or reveal a new and promising course of action. It is essential that, at this stage of the process, options remain open.

¶ 14 Leave a comment on paragraph 14 0 Step 3: What do the options entail? Gather data and estimate time frames
Once a narrowed list of options has been created, two questions should be answered:

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• What information is needed to understand the benefits, viability, and costs of each option?
• How long would it take to implement and attain the benefits of each option?

¶ 16 Leave a comment on paragraph 16 0 The objectives developed when the outcome statement was created provide the framework for the data that will be needed. If the university is focused on a particular program as a growth area for research, what kind of data do researchers in that program generate in the course of their work? Are there possible early adopters among the college’s faculty who would be eager to use in-house digital publishing services? Does the college’s tenure and promotion structure focus on publishing with established, traditional publishers? If one option is to channel data management to a commercial publisher, what have its costs and annual price increases been in comparison with other publishers? If one option is to use a contractor for some or all of a particular service, what has its fee history been with other institutions? If staff need to receive special training, what is its availability and cost, and how long will it take trained staff to become proficient?

¶ 17 Leave a comment on paragraph 17 0 As in the option-generation phase of developing a case, data gathering will require casting a broad net and talking with a variety of stakeholders and different offices within the institution as well as with a potential partner’s management. It is not possible for the library to have all of the data points in hand. Other prime sources of information are contacts within other institutions: while the conventional library literature provides few examples of rigorous analysis of new scholarly communication services, the profession itself is well known for its willingness to share information. Visiting one or more libraries for in-depth discussions on how a service works, what it costs, what it took to get it up and running, and to observe it in action is far less costly than building an unsustainable service. Contact and discussions with other libraries at this stage of case development is imperative if a strong option is an interinstitutional service.

¶ 18 Leave a comment on paragraph 18 0 The second step in the data-gathering process is to project a time frame for implementing each option and attaining its objectives. It is essential that projections be reasonable. Building a service where the best-case scenario is assumed at each step of development greatly increases the risk of not meeting targets or goals. What is a reasonable timetable for training staff, for directing new work to them from researchers or publishers, and for seeing the objectives of a service achieved?

¶ 19 Leave a comment on paragraph 19 0 Step 4: How does this work? Analyzing the options
Gathered data must be analyzed in order to evaluate different service options before a course of action can be selected. As in the data-gathering step of the case process, the analysis should address the metrics and objectives that underlie the outcome statement. How will a specific option advance the library’s goal(s) as described in the outcome statement? What are the real costs of attaining the goal(s) through each option?
Questions to be answered at the analysis stage should include:

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• What is the market for this service?
• What are all of the costs?
• What are all of the benefits?
• What are the savings?
• What is the time period between initial steps to full implementation, or to offsetting other costs, where this is a goal?
• Is this service appropriately located for its desired scale? Should it be in the library, or created in collaboration with another campus entity, or in collaboration with other institutions?
• How could this option be sustained financially over time?
• What are the impacts on other institutional goals?
• What are the unquantifiable costs and benefits?
• What is the overall institutional impact?

¶ 21 Leave a comment on paragraph 21 0 Market research is critical in the development of any possible service. At this point in the business case, market research includes understanding who is the core audience (market) for a service, their ability and willingness to use it, what their alternatives are, how they want to use a service, and if it is affordable. Without spending time on market research, library leaders risk constructing a service that will not be used.
In addition to including figures for actual expenditures, it is important to note any other costs that may be avoided if an option is implemented: contracting with a third-party provider might save dollars that would otherwise be used to add new staff, equipment, and other costs. The cost of providing metadata services in-house for data maintained on institutional servers might be less expensive than licensing access to data if it were transferred to a commercial publisher. The cost of managing an installation of Open Journal Systems to be used by a small society publisher might be less expensive than the cost of finding alternative content should its journal cease publication. In the same vein, does a particular option entail other kinds of less quantifiable costs? If staff are retrained to take on new responsibilities, who will take on their previous work? If the library scales down or ceases to offer other services, what is the impact on students and faculty?

¶ 22 Leave a comment on paragraph 22 0 Developing business models—structures for providing ongoing funding streams—must begin at this stage. Any service or program needs ongoing funding streams if it is to be sustained over time. Maron and Loy (2011) reflect on the large number of digital projects that, after initial funding ends, become obsolete or disappear. This may be avoided by early planning and then implementation of appropriate business models. Crow (2009b; 2011) and Guthrie, Griffiths, and Maron (2009) suggest models that sustain publishing programs successfully over time. Esposito (2011) offers very clear descriptions of publishing business models and suggests that a combination or hybrid approach may be more effective than relying wholly on one model. “À la carte” service models, where editors or societies working with library publishing programs pay varying amounts for different levels of service, could fund a broad array of services over time. A library partnering with a press should turn to the press for an understanding of first-copy costs, which account for many of the fixed costs in publishing.

¶ 23 Leave a comment on paragraph 23 0 In the area of data management, business models are currently very limited. DataNet Partners have been tasked with developing these, and their work is ongoing. Nevertheless, it is imperative to put funding streams in place to keep services viable. Libraries will need to work with their institutional leaders and research offices to include appropriate funding in grant proposals or to use overhead income to support programs.
Scalability must be fully analyzed. Is the new service appropriately located locally, in the library alone or in a collaboration between the library and another campus entity, such as the research or IT office? While one of the great benefits of the Internet is that virtually anyone may become a publisher, one of the great problems libraries and publishers now face is that most everyone wants to become one. If the library has a stated goal of participating in the transformation of scholarly publishing, is that goal best served by publishing one or two journals or monographs on its own? Or do many small, repetitive efforts thwart the transformation that libraries seek? Real impact will likely require that libraries create collaborative efforts that by their very nature can be better financed and more powerful, which translate into stability and sustainability. One clear example of the benefits of scale is HathiTrust (Christenson 2011; Malpas 2011), where the digital repository is not only larger than a single library could maintain, but can also provide levels of service and security (such as TRAC certification) far beyond the scope of local abilities. The Trust affords a powerful example to libraries interested in creating truly transformative scholarly communication services. Trust-like structures for publishing might enable real competition with commercial publishers. Trust-like structures for data management and curation, perhaps in disciplinary hubs, may be a feasible way forward. Thinking about scalar emphasis (Dempsey 2010) must remain in the forefront of local decision making.

¶ 24 Leave a comment on paragraph 24 0 Listing the impact on other institutional goals beyond those that are key to the development of a specific service will provide greater insight into the value that a library’s services offer to its parent institution. Enhancing institutional reputation, creating an environment for deeper learning, supporting faculty activities in a time where a university may be trying to grow its faculty, or offering support services that keep top researchers satisfied and less willing to move to other institutions are all important additional benefits that may accrue from new services. Institutional leaders should be made aware of the full impact derived from their investment of trust and resources.

¶ 25 Leave a comment on paragraph 25 0 Step 5: What would happen if . . . ? Selecting an option and calculating risk
After the analyzed options have been reviewed, varying degrees of scalability, sustainability, costs, and impact among the different options should be clearer. The best possible option—one that provides the best balance of these variables—should be selected.

¶ 26 Leave a comment on paragraph 26 0 Risk is inherent in any course of action. No innovation is achieved, no new directions can be explored without it. Risk is best managed and mitigated when clearly identified. It will remain, but can be dealt with. To understand and weigh the risks that come with any specific service implementation, the following sets of questions are helpful.

¶ 27 Leave a comment on paragraph 27 0 How will the library implement this service? Does it have the appropriate staff? Can deadlines for development be met with the resources in hand? What will happen if developmental milestones cannot be met? If primary goals are not attained? Is the service really scalable and sustainable? Does it need to be?

¶ 28 Leave a comment on paragraph 28 0 What is the impact of the new service on the library and the institution? What would the consequences be for the library if the new service is not successful? Could this service draw needed resources away from supporting the core work of faculty and students? What would happen if the service were more successful than forecasted and grew beyond the stated goals? Would it divert attention and staff from supporting students and faculty? Would it divert attention away from the library’s core mission?

¶ 29 Leave a comment on paragraph 29 0 Is the proposed business model parallel with others within the institution? If fee-for-service structures are planned, are these contrary to the organizational culture? Can fee-based services be structured to ensure that there is no real or perceived degradation in core services to students and faculty?

¶ 30 Leave a comment on paragraph 30 0 Could the success or failure of this service adversely affect a particular individual or group within the institution?
To what extent are the risk factors within the libraries’ control and sphere of influence or beyond its control and influence?
Maul (2011) aptly calls this assessment sensitivity analysis. It identifies unintended and possibly unforeseen consequences of both the best and worst possible outcomes. As a result, steps may be taken or failsafes put in place to reduce risk or possible direct or collateral damage should the service not perform as planned.

¶ 31 Leave a comment on paragraph 31 0 Risk mitigation will most likely require enlisting the expertise of others outside the library. A divisional or university finance officer might review the financial plan for a service. The general counsel’s office should advise on the development of contracts. A consultant might prove useful for a service in a new area for the library, such as publishing, where the library’s industry knowledge is limited to the consumer side. Another key step in risk mitigation is moderating the objectives. If optimal, best-case impacts, time frames, cost projections, staffing factors, and other estimates have been used, they must be recalculated. To assume that the least effort for service development will produce the best results is to create unnecessary risk and to set up a new service for failure. The overriding question that should be asked throughout each step of service case development is, Can this succeed?

¶ 32 Leave a comment on paragraph 32 0 If a review of risks reveals that these might be intractable or beyond institutional tolerance, another option should be chosen and assessed.
If the risks attached to a preferred option can be successfully mitigated, the outcome statement should be rewritten to address how a particular service, based on that option, will meet goals and user needs:

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• The library will create a distributed data management service in conjunction with the other Rocky Mountain Native Species Research Consortium libraries to enable efficient data harvesting, sharing, and curation for researchers within the consortium.
• The Scholarly Communication Officer, working with leadership at the University Press, will negotiate the provision of online publishing services for print-only journals published by scholarly societies that have been identified as high value, at risk titles by the History Department.

¶ 34 Leave a comment on paragraph 34 0 Step 6: This is what we’re going to do. Create the implementation plan
Congratulations are in order. A plan has been identified to meet the expressed needs of the library’s users and to promote institutional goals. This plan was decided upon after a frank and wide-ranging review of all possible options, after extensive conversations with stakeholders within and beyond the university, and informed by a clear sense of what users think is valuable to their work. Now the outcome statement must be turned into an implementation plan accompanied by a clear value proposition.

¶ 35 Leave a comment on paragraph 35 0 An implementation plan includes the action items, dates, and staff needed to bring the service plan to fruition. It must be documented to stay on track and to provide the service markers that future assessment activities will measure, and because there are multiple people and groups who need to have a shared understanding of what is being built, what their roles are, and how it will indeed meet the needs that they have expressed to the library. It need not be elaborate, but it must be clear.

¶ 36 Leave a comment on paragraph 36 0 The first step is to sketch out developmental milestones—the time frame for moving from one step of implementation to the next. Milestones also help developers to understand what action items are needed to permit advancing to the next step (e.g., when training needs to be completed). This is a critical component of project management.

¶ 37 Leave a comment on paragraph 37 0 Month One: Announce service to Library and University. Contact staff identified by Library and Computing for training and participation. Work with managers to plan how responsibilities will be reassigned. Determine training opportunities.

¶ 38 Leave a comment on paragraph 38 0 Month Four: Assess training needs and secure access to training. Gather information on and current prices for software platforms.

¶ 39 Leave a comment on paragraph 39 0 Month Seven: Complete training . . .

¶ 40 Leave a comment on paragraph 40 0 The action items arise from the milestones: “Have applications for certificate program in by April 1;” “Determine which journal management systems can support subscription access.” The action items may not need to be available to institutional leadership, but the library should be prepared to share the milestones.

¶ 41 Leave a comment on paragraph 41 0 Developing the milestones and action items exposes what resources will be needed in advance of needing to have them available. How—and by how much—will the library’s budget need to be adjusted to bring the new service online? What individuals—by name and title—will move into new responsibilities? Without financial figures and names, it is likely that central administrators will think that a new initiative will be paid for from internal reallocations.

¶ 42 Leave a comment on paragraph 42 0 The implementation plan must also describe the intended benefits or value that the new service will provide. This is the next step in creating the value proposition, and it is included here in order to reaffirm the rationale for moving ahead. A new service draws dollars, staff, time, and attention away from other activities. It also requires that its intended users change their current behaviors or move their work into the new service, demanding effort on their part. Success is based upon the user’s assessment that it is worth making the effort because of the value that results in using the new service, value that is greater than received by not changing his or her routines or by choosing from other alternatives. Understanding what the value is in support of their own work will promote user acceptance of a new service. Understanding what users will find sufficiently valuable promotes creation of good services. That is the strength of the value proposition. Indicating it in the list of benefits and value to be provided is a strong motivator in moving a service from plan to reality and a strong motivator for supplying the resources needed to make it possible.