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Cost/Benefit

Analysis

Making the Business Case

for Records ManagementKaren 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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Aprogramfor

managingrecordsinvolves

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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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 replacefile 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 CostsNeeds 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

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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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E

ffect Over TimeCost / Benefits = Payback

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

ORapproximately 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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Managing records is your legalresponsibility

Address all records

There are simple strategies toenrich your program

You are not alone!

Closing words

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Help Contact the State Archives

Call yourRegional 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