Cost/Benefit Analysis Making the Business Case for Records Management

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Cost/BenefitAnalysisMaking the Business Case
for Records Management
Karen Trivette Cannell, MLS NYALGRO 2007
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• To provide
• the right information...
• at the right place...
• at the right time...
• to the right person...
• efficiently...
• at the lowest possible cost.

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A program for managing recordsinvolves

• Creation
• Retention
• Storage
• Retrieval
• Technology
• Archives
• Policy

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What is a cost benefit analysis?

• An approach to cost justification
• An analysis of an opportunity

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What types of opportunities should require a CBA?

• Adding staff
• Introducing new technologies
• Mobile shelving
• Changing vendors
• Remodeling facilities

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CBA Justification

• Hard dollar savings
• Soft dollar savings
• Cost avoidance

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• Should our government
• outsource our microfilm
• operation or continue to
• perform it in-house?

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• Should our government
• automate our records
• management operation
• or stick with our manual
• procedure?

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• Should our
• government replace
• file cabinets with
• open shelving?

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The CBA Approach

• Preliminary Study
• Feasibility Study
• CBA
• CBA Report

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The Preliminary Survey

• Initial evaluation
• Information about the existing situation
• Assessment of potential

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The Feasibility Study

• Finalizes data gathering
• Assesses the data in detail
• Furthers the analysis process

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• Identify the costs
• Identify the benefits
• Consider the effect of time
• Analyze the results

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The Costs

• Needs assessment/consultant services 12,500.00
• Staff training 500 hours _at_ 10.00/h 5,000.00
• Geo-reference drawings 5,000.00
• Color scanner 25,000.00
• GIS software/consultant services 40,000.00
• Total 87,500.00

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The Benefits
Reduced overtime 60,000.00 Unbilled sewer
connections 12,000.00 Recouped business license
fees 20,000.00 Total 92,000.00
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More Benefits

• Soft dollar savings
• Higher level of customer service
• More advanced records stewardship
• Improved staff expertise
• Cost avoidance
• Compliance with GASB 34

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Effect Over Time

• Cost / Benefits Payback
• 87,500/92,000 0.95 of a year
• OR
• approximately 11.5 months

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Analyze Results

• Is the payback
• period
• sufficient?

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The CBA Report
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• Executive Summary
• Introduction
• Scope and Purpose
• Methodology of the Study
• Recommendation
• Justification
• Implementation
• Summary
• Appendices

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Executive Summary

• Provides an overview to the CBA Report
• States the report's purpose, the nature of the
  opportunity
• Summarizes the recommendations
• Outlines the benefits

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ROI

• The King of Justifications

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ROI Formulas
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Basic ROI

• Gains Investment Costs
• ____________________________ ROI
• Investment Costs

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Office Move ROI

• RS Reduction in office space cost
• CS Cost of mobile shelving
• RS CS
• _______ ROI
• CS

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Imaging ROI

• RS Reduction in office storage cost
• PS Personnel System costs
• RS PS
• _______ ROI
• PS

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Risk of Inaction

• FI Financial loss from inaction Negative
  value
• CI Lack of investment ( 0)
• -FI CI -FI 0
• _______ _____ negative ROI
• CI 0

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Closing words

• Managing records is your legal responsibility
• Address all records
• There are simple strategies to enrich your
  program
• You are not alone!

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Help

• Contact the State Archives
• Call your Regional Advisory Officer
• www.archives.nysed.gov
• Network with peers
• Join
• NYALGRO
• ARMA International
• Society of American Archivists

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Thank you for listening!
www.archives.nysed.gov