Part 1 | Part 2

About a month ago I made a post on the value of transportation libraries. Specifically, I calculated my library’s return on investment (ROI) for inter-library loans and cataloging service. In this post, I take a similar approach but focus on two additional areas – circulation and reference services. Seeing as my performance statistics demonstrate what my library has provided to MoDOT, I conclude by tabulating them and calculating a final ROI number.

Circulation

The circulation of material fits at the core of any library’s function. Mine is no exception. It is also worth pointing out that circulation is one of the most comprehensive indicators of library use and is related to nearly all other service areas.

Last quarter my library circulated 569 print and digital items.  Interestingly, this supplemented my inter-library loan and reference service while often making use of the cataloging records I created. Circulation – in the case of my library – then reflects the time saved providing and delivering tangible information to customers (as opposed to finding or analyzing it for them). Moreover, the value of information leads to tangible results as well. That said, there are two savings elements which can be derived from my circulation statistics: time saved by delivering information to my patrons and the value derived from it’s use.

Providing Information

Print items tend to make up a small portion of my circulation numbers. While a minority, these checkouts usually represent information that is not online, so my library saves employee time by managing them. Here’s how. Housed at the State Library, it takes 5 minutes to drive a book to MoDOT’s Central Office. Acting as a central repository the library uses the State’s interdepartmental mail service to provide an efficient and central method of obtaining publications. Now, assuming 5 minutes – with another 5 minutes spent on a return trip – plus another 20 spent parking and walking inside we see that about 30 minutes gets saved per time a print item is checked out. Admittedly, patrons usually check out multiple books at a time. But, because the distance between the two locations in question is so short it serves as a reliable indicator to calculate savings. MoDOT’s Central Office is easily the closest building that my library offers service to.

Multiplied by the number of print items: 30 minutes x 40 equals 20 hours saved in staff time. Assuming an average salary of $26.00 an hour using the Missouri Blue Book a total savings number can be tabulated at $520.00.

Additionally, a similar formula can also help to determine the amount saved by delivering digital items. Many online publications aren’t available to staff and others are sequestered away in databases. Assuming 5 minutes per item to download, save, and e-mail digital publications we can deduce that: 5 minutes x 529 digital items equates to 44 hours of saved time. Multiplying that by $26.00 an hour this totals $1,144 saved through the delivery of digital files. That’s in addition to the $520.00 mentioned earlier and a sum of $1,664 dollars.

Value of Material Read

Ultimately, in spite of operational efficiencies, libraries are in the business of providing information… so researcher use matters. In most environments patrons visit the library to find information, and reasons are manifold, but among them include the hope to eliminate redundant work, confirm worthwhile activities, note unproductive projects, and so on.  In short, library users conduct research to find information that allows them to do their jobs better, faster, and cheaper.

Prior to the 1990′s a deal of work focused on determining the relationship between information and productivity. Several studies, in fact, came to the conclusion that such a correlation is positive. One study reported an average savings of $600.00 per reading of journals, books, and internal reports; a source also cited by MnDOT. Another paper noted a positive correlation between time spent reading and productivity (without identifying numbers). Finally, a FHWA report on “The Value of Information and Information Services” highlighted not only that time spent researching leads to savings but it also leads to an increase in researcher confidence with the quality of their work. Though these reports tend to be geared to a more traditional workplace (they don’t take into account that employees now spend around 25% of their time today looking for information) they do highlight an important fact – quality information is valuable.

But how valuable?

Without a recent study in hand, it’s difficult to determine a quantifiable number, but a few things are apparent. First, information quality on the internet varies, but it’s more reliable in traditional formats. Second, libraries – and librarians – tend to emphasize the use of information from specialized databases and formats which are themselves conservative. Finally, even if access methods have changed over the past twenty years this doesn’t mean that the potential value of information has declined.

Without covering something off topic, it’s generally noted that librarians and information professionals are trained to find and provide information. They can usually do it better and faster than their patrons can. Interestingly, my library’s resources always pass through me. Given this form of quality control it’s reasonable to believe that the average savings per item circulated shouldn’t be much less than the $600 reported earlier. Taking an estimate of $475 per reading, then,  at 569 items x 15% of them providing value… the 85 worthwhile items resulted in a return of $40,375 to my library. This came from the elimination of unnecessary projects, properly set up research, operational improvements, and so on.

While seemingly based on an arbitrary number, Pennsylvania’s State Library conducted an ROI study in 2006 that noted 49% of  the business uses of public libraries were reported to save money. Another 90% improved work and 79% increased productivity! Though the amount saved was not calculated this assessments backs up my general figures.

Reference Service

The final area of service provided by my library comes through the answering of reference questions.  In total, I did this for 24 detailed and 36 short ones last quarter. The detailed questions involved providing comprehensive literature searches and analyzing data. The 36 short questions were more general.

Based on, ”Libraries and Librarians: The Key to Growth and Survival?” – as mentioned earlier - white collar workers spend around 25% of their time searching for and using information. Additionally, most projects that require a literature search take a week of staff time (or longer) to complete. Reconciling this, it means that MoDOT’s employees spend around 10 hours searching for and distilling information per major project. The library offsets these costs.

Multiplying 24 literature searches by 10 hours the library performed 240 hours worth of detailed reference service. Multiplying this by $26.00 an hour the library saved $6,240 dollars in time. As for quick questions, based on a time analysis that was conducted in October, they accounted for 56% of the time that longer ones do. Multiplied, once again, by $26.00 this results in a savings of $3,494 for a grand total of $9,734.

Note: The 25% figure could be lower (at 20%), but the same report also notes that employees tend to stop searching at this point. Given that finding material is part of the library’s job I used the high number to account for a dedicated person proving information.

Conclusion

Based on the methodologies used so far, MoDOT’s Transportation Library provided $55,966 in service last quarter – a return on investment of 3.11 for every dollar spent.  Still, this figure shouldn’t be surprising. Especially given that the purpose of libraries is to leverage information services while eliminating wasteful, decentralized, and unnecessary procedures. In the 1700′s and 1800′s lending libraries emerged as money saving organizations; books in Ben Franklin’s time were prohibitively expensive. Though not the case today, it should be recognized that modern libraries carry this mentality with them. Pooling time, money, and resources makes more sense in a recession than ever.

In retrospect, one of the most notable things found earlier was the value of information itself. Comprehensively, almost all of the figures used to calculate a final ROI number centered around operational efficiencies. But, they weren’t the most valuable. To paraphrase Michael Douglas in Wall Street, “the most valuable commodity [...] is information.” Given that information is what libraries deal in, and that Michael Douglas was playing a Wall Street banker, any good ROI should reflect that the most important thing offered… is what users get out of it.

Part 1 | Part 2

When I started work at MoDOT one of the first things I did was read through my predecessors quarterly reports. Normally, this would have been an unnecessary (and tedious) task, but fortunately it wasn’t the case. Her narrative prominently outlined my library’s return on investment.

The catch is that she cited a 2003 report which needed both an update and expansion.

Sometime in the next year the Transportation Connectivity Pooled Fund will offer some financial help to update the report. Or provide a similar service. But, given a Congressional re-authorization bill in the works, the Pooled Fund being in it’s final year, and the transportation library community’s attention held in multiple places I feel like it’s a good time to evaluate what an updated report could look like as applied to my library. A new version may never be put out, but any quantification of services will undoubtedly take a similar approach. In this post, I use statistics from my library, current literature, and Jerry Baldwin’s MnDOT report (the one mentioned earlier) to provide a set of figures showing MoDOT’s library return on investment; June to August 2009.

Let’s take a look at the numbers.

My regional consortia, the Midwest Transportation Knowledge Network, measures seven key performance areas, six if you discount items loaned to other libraries. These are:

• Inter-library Loans.
• Items Copy Cataloged.
• Original Items Cataloged.
• Total Items Circulated.
• Short Reference Questions Answered.
• Detailed Reference Questions Answered.

Certainly, the MTKN doesn’t measure all areas of performance but these are the ones that are readily quantifiable.

Inter-library Loan

This quarter my library borrowed 54 items from other libraries at no cost. This can be attributed to reciprocal lending agreements. Now, it’s difficult to tell exactly how much money was saved, but lending can be broken into four areas of worth: rare historical items, technical trade items, transportation specific publications, and newspapers/magazines. These distinctions serve a practical purpose in addition to a descriptive one. Costs per item can be  comparatively broken down along with specific item types.

• Rare and Historical = $250.00 (One item was borrowed this quarter dating to 1876 and only two known copies are available. A similar book by the same author indicates a comparable cost.)
• Technical Standards = $75.00 (Averaged from a sample of ASME drafting standards.)
• Transportation Literature = $45.00 (Averaged from a sample of NCHRP reports.)
• Newspapers/Magazines = $1.00 (Based on the general cost of a single issue newspaper or magazine.)

Multiplying these numbers by appropriate cost averages we find that: 1 x $250.00 = $250.00, 12 x $75.00 = $900.00, 35 x $45.00 = $1,575, and 6 x $1.00 = $6.00. Summed together this totals a savings of $1,906.00. Given that my library has no acquisition budget, and it  paid nothing to borrow these items, this number represents an avoided costs for MoDOT as a whole.

Note: Costs for shipping, time, and overhead are not included into this formula. Sample averages are intended to be representative but are not based on a comprehensive market evaluation. Still, they are very much in line with Jerry Baldwin’s evaluation which assumed a cost of $50.00 per item.

Cataloging

Cataloging, essentially, amounts to complex data entry using the MARC format.  This quarter, my library cataloged 986 items and performed original cataloging for 90 more. It takes a good cataloger thirty minutes to process an original item and five minutes to copy catalog one. Using these self-identified numbers  MoDOT’s library spent 127.1 hours on data entry (assuming 90 x 30 minutes = 45 hours plus 985 x 5 minutes = 82.1 hours). Additionally, a 2004 article titled “Factors Affecting Cataloging Time” which surveyed Carnegie Mellon University complements this assessment.

Multiplied by the Librarian’s salary of $18.00 an hour MoDOT received $2287.80 in value added service.

To go a step further, there are two common approaches to data entry. First, and relatively well known, is on-line indexing which occurs when independent search engines “crawl” public websites. Thanks to a recent IBM study and IDC whitepaper, however, we know that the amount of information available on the web will multiply tenfold from 2006 to 2011. That said, manually entering, controlling, and standardizing information using MARC can been seen as a viable supplemental investment. MARC’s degree of specificity is geared to researchers and it’s longevity proves that it can do the same job it has for years.  Time value accounted for, MARC cataloging provides a unique and safe service to MoDOT.

Note: CMU’s internal survey noted that: 82% of all items were cataloged in under 15 minutes, 14% of all items were cataloged in 15-30 minutes, and 4% were cataloged in 30 to 60 minutes. My numbers fall into these representative areas.

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In my next post I’ll move on to circulation and reference services return on investment then sum my library’s total value together.