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9th Annual AMICAL Meeting & Conference April 4 – 7, 2012 American University of Sharjah ROI @ LAU LIBRARIES by Cendrella Habre Director, Riyad Nassar Library Lebanese American University Beirut
What is ROI?• Naturally, everyone knows that the value a library provides is not the same as the cost; it is more based on quality than quantity/bottom line. Annual expenditures measure the cost, but what is the value in dollar sign? If one knew the value, one could calculate the Return on Investment (ROI).• Generally, ROI is a concept that is commonly used in evaluating business investments.• Lately, ROI has become the “MANTRA” of academic libraries.• Wikipedia defines ROI as “the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.”• Dictionary of Economics (Wiley) defines ROI as “the net income divided by invested capital.”• About.com defines ROI as “the rate of revenues received for every dollar invested in an item or activity.”• And so on…04/18/12 AMICAL_2012 2
Why ROI in Libraries? FACTORS:• Libraries and the library profession are facing some of the toughest times because of the global financial crisis. vs.• On one hand we have budget constraints, restricted funds, reducing grants, etc. On the other, we have increasing costs of books, periodicals, multimedia material, etc.• Most importantly increasing demands to establish a well-developed digital environment to satisfy users.• Pressure from academic administrators and funders to provide new evidence that a) libraries still matter; b) they make a significant difference in the quality of academic life; c) and they play a significant role in supporting the colleges and universities missions.04/18/12 AMICAL_2012 3
What’s Happening?• From the 1980 onwards, there was a growing interest in library economics, namely ROI.• Several researches and studies have been carried out to this effect. To name few:4. In 2003, Roger Strouse of Outsell Inc., developed a model to value corporate libraries based on calculating income generated with the use of library resources.2. In 2006, Elsevier began discussing the idea of finding a formula that would show a return on a university’s investment in its library. The University Library at the University of Illinois (Urbana-Champaign) volunteered to undertake this case study which was launched in 2007. Focus: One component, i.e., using grant income generated by faculty using library materials. Value: 95% of the grants at the university were generated from tenures.04/18/12 AMICAL_2012 4
More… 3. In 2007, two reports were published focusing on the social and economic benefits of public libraries in the US, Sweden and Norway. Titles: “Worth their weight: An assessment of the evolving field of library valuation” & “Making cities stronger: Public library contributions to local economic development”. Findings: Consistent in the ROI figures = 4:1. 4. In 2009, a 3 year study “Lib-Value” was launched. Funded: Institute of Museum and Library Services. Project members: University of Tennessee, University of Illinois (Urbana- Champaign), Syracuse University, and ARL. Focus (expanded): Value of library collections, services, research, teaching and learning, and social and professional areas. Findings: Still in process.04/18/12 AMICAL_2012 5
And More… 5. In 2010, ACRL published an important report “The value of academic libraries: A comprehensive research review and report”. Focus: Library value to external audiences rather than measuring internal library procedures. Findings: Set of recommendations. 6. Cornell University Library: Library value calculations website which includes calculated dollar values for some core library transactions. 7. In 2010, the University of Oregon Libraries published their annual report FY 2009- 2010 in which a very simple ROI method was implemented. Focus: Library end-user services. Findings: 2.8:104/18/12 AMICAL_2012 6
LAU Libraries Exercise ROI rate for the period Oct. 1, 2009 – Sept. 30, 201004/18/12 AMICAL_2012 7
Applied Formulas• Book and Audio/Visual Checkouts Formula: Nb of purchased items: 14,423 Total cost + Custom clearance = $1,583,826 + 3410.60 = $1,587,236.00 Average cost/item = 1587236.6/14423 = $110/item Depreciation cost/item = 50% = $55/item• Reference Service Formula: Sum of salaries of 3 staff + 30% (comp. + benefits)/Nb of transactions per year = $11.18• Equipment Borrowed Formula: 5% of staff salary + 30% (comp. + benefits) + Total cost of equipment/3 years (recycling) = Sum/310 days = $33 (Rate/day)04/18/12 AMICAL_2012 8
Conclusion• This field of library valuation is still fairly young, yet it is expanding.• Studies differ in methods, aim, and scope.• Problems: Lack of consistency in methodologies Cumbersome Difficult to replicate Value does not actually respond to the legitimate questions raised by our administrators and funders.• Comments and recommendations: While new quantitative measures of success are needed, some say that Libraries are spending a lot of efforts to quantify impact in the face of budget challenges. Instead these efforts must be shifted to taking new roles and responsibilities in order to satisfy the needs of users (very sophisticated and tech-savvy) as well as to facing the challenges of the digital information world.04/18/12 AMICAL_2012 9
References• Aabo, S. (2009). Libraries and return on investment (ROI): A meta-analysis. New Library World, 110(7/8), 311-324. Retrieved February 22, 2011, from http://www.emeraldinsight.com/journals.htm?issn=0307- 4803&volume=110&issue=7&articleid=1805424&show=html• Green, D. (2010). ARL partners in grant to study value of academic libraries. Association for Research Libraries. Retrieved February 22, 2011, from http://www.arl.org/news/pr/ROI-grant-12jan10.shtml• Howard, J. (2011, April 1). College librarians look at better ways to measure the value of their services. The Chronicle of Higher Education. Retrieved February 22, 2011, from http://chronicle.com/article/College-Librarians-Look-at/126975/• Kaufman, P. (2008). The library as strategic investment: Results of the Illinois return on investment study. Liber Quarterly, 18(3/4), 425-436. Retrieved February 22, 2011, from http://liber.library.uu.nl/• Kumar, H. A. (2011). “Return on investment (ROI) from libraries”. 8th International CALIBER, Goa, March 02-04, 2011, Retrieved February 22, 2011, from http://shodhganga.inflibnet.ac.in/dxml/bitstream/handle/1944/1641/49.pdf?sequence=1• Mays, R., & Baker, G. (2011). ROI: Return on Investment. Future Ready 365. Retrieved February 22, 2011, from http://futureready365.sla.org/04/29/roi-return-on-investment/• Neal, J. G. (2011). “Stop the madness: The insanity of ROI and the need for new qualitative measures of academic library success”. Proceeding from the Association of College and Research Libraries conference, Philadelphia, PA. March 30–April 2, 2011. Retrieved February 22, 2012, from https://www.ala.org/ala/mgrps/divs/acrl/conferences/confsandpreconfs/national/2011/papers/stop_the_madness.pdf• Tenopir, C., Mays, R., & Kaufman, P. (2010, August). Lib-value: Measuring value and return on investment of academic libraries. Research Library Issues: A Bimonthly Report from ARL, CNI, and SPARC, 271, 36-40. Retrieved February 22, 2011, from http://publications.arl.org/rli271/38.• Tenopir, C. (2009). “Measuring the value and return on investment of academic libraries”. Paper presented at the International Conference on Academic Libraries (ICAL), Delhi, India, October 5–8, 2009. Retrieved February 22, 2011, from http://crl.du.ac.in/ical09/papers/index_files/ical-2_158_377_1_RV.pdf04/18/12 AMICAL_2012 11