Library Value Toolkit: ROI

What do we think you should keep in mind?

Recommendation 1:
Do not assume use equates with value. Best to be prepared with some tangible evidence of value which ROI can provide.

Recommendation 2:
Take time to plan ROI calculations. Our complex resource packages and variety of vendors offer challenges.

Recommendation 3:
Numbers do not tell the whole story. You can't rely on ROI data alone!

Image courtesy of [Master isolated images] / FreeDigitalPhotos.net

This section offers approaches and standard templates for library stats collection.  This includes:

• What is ROI and SROI?
• Give Me an Example!
• Give Me Another Example!: ROI Calculators
• Video Highlight: Methodological Considerations from an Economics Perspective
• Top Resources: Documents
• Top Resources: Links
  

Return on Investment (ROI)
Sometimes we are called to provide a cost benefit analysis for some of our services or collections. For health libraries, the return is generally not 'income' but rather savings from using external services.

SROI
Social Return on Investment is an emerging concept. It captures intangible benefits. To date, no tools have been developed to measure SROI. 

This page is dedicated to tools and sources of background information on ROI. 

Case Study: Hazelden Library and Information Resources

Barbara Weiner published an important study, A Bottom Line Adventure,  in 2000 (Behavioral & Social Sciences Librarian, 182(2): 27-31). The Hazelden Library is a health library supporting clinical, publishing and education activities. Although an older study, it remains a good 'how to' example of demonstrating and calculating the dollar value of worth. It is a resource for NN/LM's course, Measuring Your Impact: Using Evaluation to Measure Your Impact. See the reprint of the Weiner paper: Marketing: Making a Case for your Library.

In a nutshell, add the $ value of benefits:

• Time saved for employees (Based on a user survey)
• Value of Reference (Based on current professional fees, and time spent)
• Value of collection (Based on cost of not having resources available on-site).

Divide this by the Library Budget.

ROI in the case of the Hazelden Library for 1998 (consistent with current studies):

• $4.30

Interesting. Compare this to recent evaluation studies:

• Toronto Public Library Cost study 2013, $5.63 ROI.
• Health Libraries in Australia (Australian Library and Information Association), 2013, $9.00 ROI.
• Economist Bruce Kingma reports in his 2012 presentation (below) that the average $4.00 ROI for public, academic and special libraries.

All significantly positive!

The National Network of Libraries of Medicine offers three tools to guide you through ROI calculations. Some points:

• These tools do take time to learn to use properly.
• Formulas are not apparent; it is not apparent how numbers are arrived at.
• Calculates figures you can comfortably take to your administration.
• Offers handy guides to help you understand the data points and contact for help.

Methodological Considerations from an Economics Perspective by Bruce Kingma, Associate Provost for Entrepreneurship and Innovation at Syracuse University. 2012

Advance to 9:30 mark to watch section on ROI.