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Cost/Benefit Analysis: Making The Business Case For Records Management

This document provides information on conducting a cost/benefit analysis for records management projects. It discusses identifying the costs and benefits of opportunities like adding staff, new technologies, or changing vendors. The cost/benefit analysis approach involves a preliminary study, feasibility study, and cost/benefit analysis report. The report should include an executive summary, introduction, methodology, recommendation, justification, implementation details, and summary. Conducting cost/benefit analyses can help justify records management projects and investments by showing the potential savings, cost avoidance, and return on investment over time.

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36 views

Cost/Benefit Analysis: Making The Business Case For Records Management

This document provides information on conducting a cost/benefit analysis for records management projects. It discusses identifying the costs and benefits of opportunities like adding staff, new technologies, or changing vendors. The cost/benefit analysis approach involves a preliminary study, feasibility study, and cost/benefit analysis report. The report should include an executive summary, introduction, methodology, recommendation, justification, implementation details, and summary. Conducting cost/benefit analyses can help justify records management projects and investments by showing the potential savings, cost avoidance, and return on investment over time.

Uploaded by

deepakarora201188
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Cost/Benefit

Analysis

Making the Business Case for


Records Management
Karen Trivette Cannell, MLS
NYALGRO 2007
To provide
the right information...
at the right place...
at the right time...
to the right person...
efficiently...
at the lowest possible cost.
Creation
Retention
Storage
A Retrieval
program
Technology
for
managing records Archives
involves… Policy
What is a cost benefit
analysis?

An approach to cost justification

An analysis of an opportunity
What types of opportunities
should require a CBA?
Adding staff
Introducing new technologies
Mobile shelving
Changing vendors
Remodeling facilities
CBA Justification

• Hard dollar savings

• Soft dollar savings

• Cost avoidance
“Should our government
outsource our microfilm
operation or continue to
perform it in-house?”
“Should our government
automate our records
management operation
or stick with our manual
procedure?”
“Should our
government replace
file cabinets with
open shelving?”
The CBA Approach
• Preliminary Study

• Feasibility Study

• CBA

• CBA Report
The Preliminary Survey

• Initial evaluation

• Information about the existing


situation
• Assessment of potential
The Feasibility Study
• Finalizes data gathering

• Assesses the data in detail

• Furthers the analysis process


Identify the costs

Identify the benefits

Consider the effect of time

Analyze the results


The Costs
Needs assessment/consultant services: $12,500.00
Staff training: 500 hours @ $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
The Benefits
Reduced overtime: $60,000.00
Unbilled sewer connections: $12,000.00
Recouped business license fees: $20,000.00

Total: $92,000.00
More Benefits
Soft dollar savings
•Higher level of customer service
•More advanced records stewardship
•Improved staff expertise

Cost avoidance
•Compliance with GASB 34
Effect Over Time
Cost / Benefits = Payback

$87,500/$92,000 = 0.95 of a year


OR
approximately 11.5 months
Analyze Results

Is the payback
period
sufficient?
The CBA Report
• Executive Summary
• Introduction
• Scope and Purpose
• Methodology of the Study
• Recommendation
• Justification
• Implementation
• Summary
• Appendices
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
ROI
The King of Justifications
ROI Formulas
Basic ROI
[Gains – Investment Costs]
____________________________ = ROI

Investment Costs
Office Move ROI
RS = Reduction in office space cost
CS = Cost of mobile shelving

RS – CS
_______ = ROI

CS
Imaging ROI
RS = Reduction in office storage cost
PS = Personnel + System costs

RS – PS
_______ = ROI

PS
Risk of Inaction
FI = Financial loss from inaction [Negative
value]
CI = Lack of investment (= 0)

-FI – CI -FI – 0
_______ = _____ =
CI 0
∞ [negative ROI]
Closing words…
• Managing records is your legal
responsibility

• Address all records

• There are simple strategies to enrich


your program

• You are not alone!


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
Thank you for listening!

www.archives.nysed.gov

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