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Practical Tips to Help You Prove Your Value by Amelia Kassel |
Demonstrating 'Return on Investment'
A distance education program videotaped last year and sponsored by
SLA and Factiva1
focused on several techniques for return on investment (ROI). The video
addressed a number of topics:
ROI is something executives want to understand when they're spending a large part of their budget. With a strong focus on the bottom line, executives tend to have less emotional attachment to the various operations they oversee and are willing, or even anxious, to jettison a unit that doesn't contribute in a tangible way....
Calculating the return-on-investment is simply a matter of comparing
the cost data (budget, user time spent, other direct costs, etc.) with
the financial benefits (user time saved, savings in consolidated buying,
savings in direct costs, etc.). When the financial benefits outweigh the
costs, a positive ROI is proven.
Understanding Your Corporate Culture
As a first step, understanding your own corporate culture is of critical
significance since the library must align its internal measurement efforts
for ROI with corporate strategic initiatives. The following are some common
examples of corporate ROI metrics:
Once you understand the goals of your corporation and the measurements that are important to it, you can identify ROI metrics that are in tune with the company to calculate your library's value. An organization that brings hundreds of products to market, for example, regularly looks for ways to decrease new product development time cycles. Its information center librarians should provide it with the scientific, technical, and business information necessary for developing initial concepts (research and development), and they may also conduct a market analysis or competitive intelligence research. The corporate librarian assists users by collecting data and analyzing target markets, or by identifying potential marketing strategies and ad campaigns launched by competitors. The information the librarian locates and delivers is important for market positioning. Research that encompasses technical, scientific, or academic studies often contains models (or paradigms) and case studies that uncover crucial details about the competition.
Or, the librarian may provide information about intellectual property, encompassing patents, trademarks, or licensing. The research results for these types of queries ultimately affect the bottom line. Moreover, a librarian's due diligence research may uncover financial or fraudulent activities that ultimately save a company millions of dollars because it helps managers to engage in savvy negotiations, or in deal making during potential mergers and acquisitions (M&A). Research saves the day by revealing data that can be used to avoid a potentially bad deal.
Information professionals know their value based on the examples above.
What has become glaringly and painfully apparent, however, is that key
managers may not know or understand what's going on behind the scenes of
their own organizations. It is essential for corporate librarians to measure
and report results to those who hold the purse strings.
Practice Information Professionalism
Collecting, documenting, and analyzing the right data, assessing their
implications, and communicating them are important next steps in the evolution
of what I'll call "information professionalism." Sometimes, corporate librarians
will require support from cost accountants inside their firms, other experts,
or outside consultants. For starters, SLA's video and list of additional
resources are chock-full of ideas and are a good beginning for learning
more about how to calculate ROI and user trends. See http://www.sla.org/content/learn/learnwhere/portals/ROI/prework.cfm.
Annual Reports: Annual reports and other internal materials are sources for learning more about your company's goals and requirements. Regularly reviewing the glossy annual report, proxy statements, 8-Ks, 10-Qs, and 10-Ks can become part of your strategic and market planning effort. As a business-within-a-business, it's necessary for the information center to plan. Annual reports sometimes provide information not in a 10-K, and vice versa. Learn to read financial statements. Look for potential opportunities or threats, and for problems or issues that you can address by developing information and knowledge products and services that are integral and valuable to the corporation. Also, it's always important to read the notes regarding any financial statements because they may contain critical information and disclosures to be aware of.
User Surveys: It's necessary to understand user populations,
especially for accurate measurements of ROI. Needs assessments, information
audits, and user surveys are all activities you should consider. Although
librarians often conduct their own surveys internally, getting valid results
means knowing whom to survey (i.e., should you survey both your users and
nonusers?), sampling, statistical analysis, and conclusions. Outsell, Inc.
or other market research and survey firms and consultants can assist you
with survey development and analysis.
New Job Titles and New Names
Are librarians having an identity crisis, as one librarian suggested?
Looking at some of the job titles bandied about, it's appropriate to reflect
on this matter. Many librarians believe that they can prove their value
by changing their names. Looking at the concept of branding and identity,
there may be more to a name than meets the eye. Here are job titles used
in recent years: Knowledge Manager, Corporate Intelligence Officer, Consultant,
Global Content Manager, Intranet Manager, Taxonomy Specialist, Research
Analyst, Information Specialist. And here are alternate names for libraries
that are now being used: Resource Center, Business Information Center,
Knowledge and Research Services, Market Research or Competitive Intelligence
Center, Virtual Library, Knowledge Center, Digital Library, Research Group.
Today's job titles and job descriptions are quite different from, and
certainly much more demanding than, the way they were in the past. For
examples, see the Job Title Generator for Library and Information Science
Professionals at http://www.lis.uiuc.edu/~mach/jobtitle.htm
for a list of job titles in use.
New Competencies, Skills, Services
When I interviewed 15 banking, pharmaceutical, and utilities librarians
and consultants on this subject, their answers revealed some of the new
skills and competencies that corporate librarians provide. These reflect
the added value these professionals offer compared to the more limited,
albeit often technical and detailed, activities of past years. The list
includes a variety of skills and functions:
Information Professional Skills
Sue Feldman's seminal article "Is There a Future for Information Professionals?"4
describes an impressive array of skills that librarians sometimes forget.
It's important for librarians themselves to be aware of and to acknowledge
their own talents and skills first, before they can begin to portray and
communicate them to others. Feldman discussed topics like problem analysis,
word skills, knowledge of resources, and interpersonal skills. Each of
these topics encompasses many individual skills.
Some Ways That Libraries Save Money
One important measure of ROI shows how libraries can save money within
their units. Here are some suggestions for cost savings:
Tips for Being More Proactive
Once you know what you want to measure, gather the data, and identify
skills, etc., it's necessary to communicate the information to the powers
that be. The skills, products, and services you provide often speak for
themselves, at least when you're preaching to the choir, but communicating
your worth to executives and users is the final step. Ideas for proactive
communication are listed below.
You Should Always Stay a Step Ahead
It will be necessary for you to think about redirecting some of your
expertise, resources, money, and people to meet business goals of the company.
And be sure to communicate what you are doing! A library can even act as
a prototype or model group within an organization. Others are thinking
about what to do; librarians do it! Librarians are involved in technology,
often years before others. By keeping up with company goals and hot topics,
and who's doing and saying what, you can stay one step ahead of everyone
else in the organization. Contact and stay in touch with key business units
or teams and the executive management. Signs of a major shift in attitudes
toward information professionals in many settings bodes extremely well
for the profession as a whole, but it will require new and continued efforts
in some cases to make the point and thrive.
References
1. "Told You I'm Worth It: ROI and the Information Professional." The tape is for sale or available on interlibrary loan to members from SLA. http://www.sla.org/content/learn/learnwhere/products/videoreg.cfm; http://www.sla.org/cotent/learn/learnwhere/portals/ROI/index.cfm.
2. Robert Strouse. "The Value of Libraries: Justifying Corporate Information Centers In The Year Of Accountability." Outsell, Inc., 2001.
3. Greg Gurdy. "Increasing your Internet's ROI." Factiva White Paper, 2000.
4. Sue Feldman. "Is There a Future for Information Professionals?" Information Broker Newsletter, Nov/Dec 1996.
Further Reading
"Analyzing the Annual Report," http://www.betterinvesting.org/bi/annual-jul99.pdf.
Online Class Discussion (1997) about what to look for in an annual report, http://www.better-investing.org/ftp/i-club-list-files/annual-report-workshop.txt.
"The Fine Print: How to Read Those Key Footnotes." February 4, 2002, BusinessWeek Online, http://www.businessweek.com/magazine/content/02_05/b3768111.htm.
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