How to Quantify the Return on Investment of Library

Technology Projects

Alice Swabey, Coordinator - Access Services, Mount Royal University Library

Jeff Narver, Library Productivity Specialist, 3M Canada Library Systems

What this Process is … and isn’tForecastProcess not a toolNot to prove Gap analysisNot for all projects

Why Use Project ROI?Reduce risk Resource allocationDefining a balanced value perspective

Qualitative, quantitative, strategic, tactical, short & long term

Funding toolValidate claims

Step 1: Environmental Scan

Collect & evaluate potential projects Prioritize projects Organize the team Library circumstances

Step 2: Program AssumptionsOutline of problem

Possible solutionsPossible alternatives

Go / no go’sProgram parameters

Size & scopeGut check

Step 3: Program Objectives

Simple, measureable, realisticFinancial, time, learning

Benchmarking

Step 4: Identify Impact Points

Break down current processBreak down new processIdentify and compile master list

RFID Sample Impact Points Speed of circulationShelf management New materials processingReduction in materials handlingSpeed to shelf

Step 5: Conversion Standard

What standard will you use?If it doesn’t fit, don’t force it

For example ...

79 652 circs/yr x 7.5 seconds/item = 165 hours x 28.98/hr wages = $4781

Step 6: Data Collection

Review impact pointsCollect data

Observation InterviewsTiming SurveysBenchmarkingSecondary sourcesTestsSubject matter experts

Data examplesHard SoftCirculationLost itemsDiscrepanciesSalariesCustomer complaintsStaff turnoverEfficiencyProcessing time

Process improvementLeadershipReputationCustomer loyaltyCustomer complaints &

impressionsStaff complaintsStaff satisfactionStaff Safety

Then Estimate Change

Agree upon change estimatesDon’t force it (step 8)

Project Savings Area of Impact

Speed of check-in -- $$

Inventory -- $$

Shelf Reading -- $$

New Collection Processing -- $$

Circulation Desk Staffing -- $$

Total Year One Savings -- $$

Step 7: Project CostsIt isn’t the just the equipmentCapital vs operational1 year or 3-5 years

Sample Project Costs

Planning and Meeting Time 20 hrs @ $40.32/hr

RFID Research 20 hrs @ $40.32/hr

Vendor Evaluation 25 hrs @ $40.32/hr

Trades Work & Renovations TBD

Hiring & Training Tagging Crew 10 hrs @ $13.50/hr

Tagging Time * 558 hrs @ $13.50/hr

Conversion Station Rental 3 months @ $1,100.00

Supervising Tagging Crew 10 hrs@ $28.98/hr

Staff RFID Systems Training 42 hrs @ $24.20/hr

Policy Review and Revisions 20 hrs @ $28.98/hr

Internal and External Communication 10 hrs @ $40.32/hr

Customer Training 30 hrs @ $28.98/hr

RFID Tags and Equipment TBD

SIPS License 1

Qualitative factors drive projects

Intangibles are the invisible advantage

Jack Phillips, 2007

Step 8: Qualitative BenefitsHelp tell the storyCustomer satisfactionStaff satisfaction

Step 9: Return on Investment

Calculate the annual project benefits (step 6)

Divide them by the project costs Payback

average 3-7 years

Step 10: Writing the Report

Barriers & enablers to implementation

Step 10: Write Report

Know your audience

Step 11: Do follow-up

Test assumptions after project implementation

What we learnedListen to the dataTimeManage staff anxietyIt isn’t always the quantitativeProcess milestones & credibilityLearning about your library

Wrapping Up

Alice SwabeyMount Royal Universityaswabey@mtroyal.ca

Jeff Narver 3M Canadajdnarver@mmm.com

Adding it all up...