To Buy, or not to Buy? The Financial Impact of Technology on Libraries

 

Written by Orien Duda

 

For LIS 6010 Dr. Lorenzen

 

 

To buy or not to buy, that is the typical question when it comes to dealing with the technological products and services of today. This is especially true since, in most cases, technology has become necessary to increase the efficiency of an organization in order for it to achieve its goals more effectively or at all. One type of organization that fits this profile is a library. As noted by Dr. Michael Lorenzen (2009), throughout history libraries have both quickly and slowly taken advantage of technology, but taken advantage of it they have! From the printing press to the internet, libraries have benefitted both themselves and their patrons throughout the decades, but at what cost? This article seeks to examine the current cost and effect of technology on current libraries.

 

    Unlike the technological changes of the past that were limited or occurred in spurts, the technology of today is extensive and advances at an alarming rate. So what types of technology do modern libraries utilize? A survey conducted on academic libraries by the Institute of Museum and Library Services in 2002 found, "The technologies most in use are: Access to Internet, e-mail, Web site, desktop computers, computerized catalogs, and standard office software. Below this group are technologies in use in 57 percent to 80 percent of the academic libraries: network servers, desktop publishing software, database software for collections management, accounting/payroll software, and intranets" (Institute of Museum and Library Services [IMLS], 2002).

 

The IMLS survey report only accounts for technology in 2002, since that time there have been other technological advancements in podcasting, wireless capabilities, and automatic checkout terminals. Some of the technologies of the future will be, "Movement from free internet access to pay-access, improved readers for e-books, more library applications for PDAs, MOTR library applications for cell phones, and I-Pods, MP3 players for use/check out," explains Dr. Lorenzen (2009). Technologies like I-Pods will become cheaper over time while others like pay-access internet or e-books will cost more to patrons and libraries. Regardless of how cheap or expensive a technology is, however, there is always a cost for these technologies and someone has to pay.

 

With the understanding that technology is a necessary part of libraries, what is its cost to libraries and how do libraries plan and budget for this ever increasing financial burden? To begin with, all libraries should have (and some are required to have) a technology plan to account for the costs of building, maintaining and replacing their equipment or services. Without a plan, a library will struggle with maintaining a consistent level of service to patrons and fluctuating costs or budget concerns.

 

Katherine Slimman (2001) provides insight on the cost of technology in a paper she wrote in 2001 to assist public libraries in Ontario, Canada which lacked a proper technology plan required by the Ontario Public Library Guidelines. In A technology planning kit for Ontario public libraries, Slimman explains:

 

One technology trend is that the hardware is becoming smaller, faster and less expensive. However, the total technology costs will increase as service expands and the network grows more complex. When considering the capital costs as well as the ongoing costs, a library can expect to allocate at least 15 percent of its budget to technology (Slimman, 2001).

 

A library's technology budget typically includes hardware, software, networking, support, training, building alterations, and upkeep. Slimman provides a technology sample budget (Table 1) in the kit which outlines initial startup and annual maintenance costs around the aforementioned items. She also indicates that budget planning must take into account the Total Cost of ownership, which is capital cost + software + connectivity + training + support + replacement + retrofitting = TCO (Slimman, 2001). Nancy Willard, formerly the project director for the Center for Advanced Technology in Education at the University of Oregon, seconds Slimman's recommendation about the TCO in an article called Technology planning for libraries. Willard explains, "When planning for a technology infrastructure it is essential to consider the Total Costs of Ownership (TCO). These costs that are most frequently inadequately addressed are the costs necessary to provide for ongoing support and staff training and the costs for maintenance and upgrade of computers" (Willard, 2004)

 

Although Slimmans' paper was written in 2001, the technology plan should theoretically still apply to a current library. Therefore, in order to validate whether Slimman's claim that 15 percent of a library's budget is still directed towards technology, I compared it to a current example to see if the percentage was similar. In this case I chose a library budget (Table 2) created by Pete J. Giacoma (2008) for the study and proposal of a Cache County Library System in Utah which would serve a population of 100,000. By subtracting Giacoma's total technology start-up budget of $513, 239 from the total budget of $2,952,652.00, the percent of budget dedicated to technology (Table 3) turns out to be an increased 17 percent (Giacoma, 2008).

 

Table 1

ITEM	Year 1	Year 2	Year 3	Year 4
Integrated library system (ILS)	$80,000
ILS annual software support	$9,000	$9,500	$10,000	$10,500
ILS hardware	$20,000
ILS annual hardware support (outsourced)	$2,000	$2,100	$2,200	$2,400
PCs, printers, barcode readers	$30,000
Replace 1/3 of PCs (beginning Year 4)				$10,000
Network infrastructure (replace server Year 4)	$20,000			$12,000
Network annual support	$2,000	$2,000	$2,000	$2,000
Telecomm installation	$5,000
Telecomm annual fees	$2,000	$2,000	$2,000	$2,000
Retrofitting	$15,000
Staffing: 1 system manager	$38,000	$40,000	$42,000	$44,000
Training	$6,000	$2,000	$3,000	$4,000
MARC conversion		$20,000
Electronic database	$800	$1,000	$1,000	$1,000

Note. From "Technology planning kit for Ontario public libraries," by Katherine Slimman, May 2001. Reprinted.

 

 

 

 

Table 2

One-Time Costs		Maintenance Costs
Item	Cost	Item	Cost
Telecommunications Network
Installation of Communication Lines	$3,258	Communication Lines	$44,727
Communication Hardware	$48,455	Communication Hardware	$4,254
Central Hardware	$10,000	Central Hardware	$2,000
Local Hardware	$3,645	Local Software	$1,220
Contracted Personnel	$144,000	PC Replacement	$48,000
Total Start-Up for Telecommunications	$209,358	Total Annual for Telecommunications	$100,201
Library Software
Core Symphony Software	$122,040	First-year maintenance costs included in start-up costs. Second year maintenance/subscription costs (including both software maintenance and subscription to Enterprise software, are as follows:
Enterprise Subscription	$28,760
Services including Data conversation (sic), training, etc., and first year maintenance	$99,770
Hardware including installation	$41,311	Year 2: $55,120
Smart Barcodes (321,000 @ $35 per 1000 plus shipping and set-up, rounded)	$12,000	Year 3: $59,290
Total Start-Up for Library Software	$303,881	Year 4: $63,760
Total Technology Start-Up	$513,239	Year 5: $68,240

Note. From "A study of the feasibility of a Cache County Library System," by Pete J. Giacoma, November 1, 2008. Reprinted.

 

 

Table 3

 

 

How do libraries fund the technology they use? Willard states that potential funding for initial and ongoing technology expenses can come from capital asset bonds, general operating expenses, grants (state, federal, foundation, corporate), local fund-raising, fees for services (e.g. fees to cover printing), and e-rate discount, although it is not an actual funding source (Willard, 2004). IMLS also sheds light on the subject in their previously mentioned survey. In reference to a question about current sources of funds for technology, the highest responses show that 73 percent of libraries claimed that technology expenditures came from operating funds, 5 percent from state funds, 32 percent from gifts from donors, and 15 percent from IMLS (IMLS, 2002).

 

Receiving enough funding for traditional library expenditures such as non-digital collections and salaries is difficult enough to manage without throwing the technology aspect into the mix. In fact, funding for technological services that are provided as free public access is a huge concern to many groups. In the recent American Library Association study titled Libraries connect communities: Public library funding and technology access study 2007-2008, the authors John Carlo Bertot, Denise M. Davis, Charles R. McClure, and editor Larra Clark express their funding fears:

 

Public libraries need stable and sustainable funding for technology services. Libraries currently are shifting expenditures to cover technology costs and/or relying on "soft" (non-tax) support to fund technology. In doing so, libraries mask the impacts of funding cuts and increased operating costs—sometimes until they are literally forced to close their doors (Bertot, Davis, McClure, & Clark, 2008).

 

This is a scary thought since the study found that about 73 percent of the libraries currently surveyed are the sole providers of free computer and internet access in their entire communities (Bertot et al., 2008).

 

What about the funding from a parent organization? "Local government revenue and 'other' (soft funding) account for nearly 90 percent of overall public library funding," state Bertot et al. (2008). Although their study only addresses public libraries, it would be safe to say that if any internal or external force adversely affected the finances of a parent organization, it would affect the funding of any type of library connected to it. A good example of this, which is currently affecting multiple parent organizations, would have to be the global recession.

 

Being that the Libraries connect communities: Public library funding and technology access study 2007-2008 did not include information from 2009, the recession may produce an even bleaker projection of the report. However, the recession is an excellent reminder of the painfully intimate relationship between library funding and necessary technology costs.

 

In the Library Journal article Budget report 2008: Treading carefully: Budgets nudge upward written by Norman Oder (January 2008), the author points out impending technological issues facing libraries in early 2008 based on library responses to a Library Journal Budget Survey. Oder explains how American libraries are intricately linked to the United States economy:

 

Because libraries' financial well-being is linked to the larger economy, those in states with once-hot housing markets are braced for lower local property tax collections. Such trends have ripples in the economies of several states; the National Conference of State Legislatures (NCSL) in December announced that 24 states and Puerto Rico had reported that state revenues were hurt by the housing sector slump.

 

But the picture is hardly crystalline. For instance, the NCSL reported that 11 states had revised their FY08 revenue forecast downward, while another 11 had revised the forecast upward. While state spending plans appear to be stable in the early months of FY08, a recession, if it hits, could be painful (Oder, 2008).

 

A little more than a year later, Marshall Breeding wrote an article also addressing technology concerns called Library automation in a Difficult Economy for the March 2009 issue of the Computers in Libraries magazine. The recession was in full swing when Breeding wrote his article and it validates the projection made by Oder. Breeding explains the current situation:

 

The downturn in the economy has taken its toll on libraries. Even in the best of times, most libraries have to work with budgets that are barely adequate to support their essential activities. In these recent months, the recession has subtracted significant funds from the parent organizations of many libraries: city, county, and state governments; public and private colleges and universities; schools; and corporations. In the sphere of libraries with which I've interacted, some have faced drastic budget cuts, including givebacks in their current fiscal cycle; others have been more lightly touched, facing only a year or so of zero-growth budgets. I've not heard from any libraries that expect increases in funding on the order of what they had a year ago.

 

I expect that this harsh economic climate will make an impact on the library automation industry and will likely force many libraries to reconsider the technology projects planned for the next year or so (Breeding, March 2009)

 

In the article, Breeding (2009) continues to explain that although technology projects may be currently delayed, it would be wise for libraries to invest in the tech training or acquisition of technically savvy employees.

 

Technology may have been a handy tool to libraries many years ago, but it has now become a necessity which is ingrained in both the daily operation of a library and its budget. Libraries are faced with innumerable challenges surrounding technology which can make or break them. Most of which are the cost of the technological equipment, services, maintenance and training for staff, all while trying to maintain as many free services to the client as possible. It seems that unless a more stable source of funding is created or more reliable open source technology is developed, libraries will continue to decide whether to buy, or not to buy…with the ever looming possibility to die, to sleep no more.

 

 

References

 

 

Bertot, J. C., Davis, D. M., McClure, C. R., & Clark, L. (Eds.). (2008). Libraries connect

communities: Public library funding and technology access study 2007-2008.

Chicago: American Library Association. Retrieved July 12, 2009 from

http://www.ala.org/ala/aboutala/offices/ors/plftas/0708/LibrariesConnectCommunities.pdf

 

 

Breeding, Marshall. (2009, March). Library automation in a difficult economy.

Computers in Libraries. Retrieved on July 12, 2009 from

http://www.librarytechnology.org/ltg-displaytext.pl?RC=13848

 

 

Giacoma, Pete J. (November 1, 2008). A study of the feasibility of a Cache County

Library System. Retrieved July 10, 2009 from

http://www.cachecounty.org/docs/libstudy.pdf

 

 

Institute of Museum and Library Services. (2002, May 10). Status of technology and

digitization in the nation's museums and libraries 2002 report. Retrieved July 13,

2009 from http://www.imls.gov/publications/TechDig02/survey_acdlib02.htm

 

 

Lorenzen, Michael. (Spring/Summer 2009) Technology's effect on librarianship

(PowerPoint Lecture). Detroit, Wayne State University, School of Library and

Information Science.

 

 

Oder, Norman. (January 15, 2008. Budget report 2008: Treading carefully: Budgets

nudge upward. Retrieved July 10, 2009 from

http://www.libraryjournal.com/article/CA6515839.html

 

 

Slimman, Katherine. (May 2001). A technology planning kit for Ontario public libraries.

Retrieved July 10, 2009 from

http://www.sols.org/publications/kits/smalllibrary/A%20Technology%20Planning%20Kit%20for%20Ontario%20Public%20Libraries%202007.pdf

 

 

Willard, Nancy. (2004). Technology planning for libraries. Retrieved July 10, 2009 from

http://www.cyberbully.org/onlinedocs/pdf/planlibrary.pdf