Case study

1. Read the scenario

2. As a group, discuss possible solutions to the scenario as the person designated. Pick a reporter to write down these ideas for your group. Write down the key points on a flip chart sheet.

3. When the large group gets back together, the reporter will present your group’s solutions to the larger group.

TOM AND THE COPY MACHINE
INSTRUCTIONS: READ AND ANSWER THE QUESTIONS BELOW.
Tom is setting up the meeting room for the next group when he is paged to the front desk. As he approaches the desk, he spots a very angry customer, waving sheets of paper at the circulation staffer at the front desk.

“I pay taxes and this is what I get – a rotten copy machine that crumpled these sheets of paper after taking all my quarters! Who fixes these machines? I’ve been waiting at least 15 minutes!”

The circulation staffer gestures to Tom and tells the customer that Tom will be able to help him. Tom takes a deep breath, smiles at the customer and says, “I’m sorry you’ve been having a problem with the copy machine. Sometimes they can be temperamental. Let’s go over the machine you used and see what I can do.”

The customer huffs and puffs, but does walk with Tom to the copy machine, saying “I expect to get my money back for these lousy copies! You should have better copiers in your library!” Tom says, “I’d like to ask your help for just a minute. Would you explain to me exactly what you did when you used the machine that crumpled these pages?”

The customer eagerly explains every step he took while Tom listens and nods his head. When the story is finished, Tom asks the customer if he noticed any red light blinking on the copy machine. “No! I don’t have time to notice lights on any machine!” Tom explains that he thinks the copier malfunctioned and that the blinking red light might have been the signal. He tells the customer that he thinks he can quickly fix the machine. “Do you have time to wait for the fix? Then you can make some correct copies.” The customer says, “Well, I only have a little time. But I’ll wait if you can really fix it!”

Tom goes to work on the machine and makes several adjustments. As he works he talks with the customer about machines and how he likes to tinker with them. Once he finishes the adjustment, Tom asks the customer to make some new copies at no charge. He asks, “Are these new copies okay with you?”

The customer nods his head. Tom asks, “Now, does this solve your copy problem?” The customer nods his head. Tom says, “Is there anything else you need today?” The customer says, “No, I really needed you to fix this machine because I didn’t want to drive down the copy center at the shopping mall. I only had a short time to copy these. Bye!” The customer hurries away and Tom takes the crumpled papers and tosses them in the trash.

Questions
1. What was the first thing Tom did to help diffuse the angry customer? What were other methods Tom used to calm the customer?

The first thing Tom did was to apologise to the angry customer and to assume that the problem was with the temperamental photocopier, not the customer. Tom listened and nodded his while the customer explained what he had done. Tom explained what he thought was the problem and while he managed to fix the photocopier, engaged the customer in a conversation. Tom provided the photocopied papers free of charge and asks if they met the customer’s satisfaction. He asked if there was anything else he could help with before the customer left.

2. How did Tom find out the exact problem? Identify steps he took with the customer.

Tom found out the exact problem when he asked if the customer had noticed a red blinking light on the copy machine. The customer hadn’t noticed it, so Tom had to look for it before he was able to fix the problem. When Tom asked if there was anything else he could help the customer with, he found that the customer had only had a short time to photocopy the papers and hadn’t wanted to drive to the copy center at the shopping mall.

3. At the conclusion of the scenario, was the customer satisfied with the result? How do you know?

We assume the customer was satisfied with the result because Tom didn’t charge him for them and he nodded his head when Tom asked him if his problem was solved.

4. How could Tom have received some recognition for his transition with the customer?

The customer could have thanked Tom for fixing the photocopier and giving him free copies.

Customer service self-assessment

Please answer each question by checking the appropriate response.

Do you…

		Frequently	Sometimes	Never
1.	Project an open, positive, friendly attitude toward every individual?
2.	Respond to complaints in a courteous and sympathetic manner?
3.	Use effective and attentive listening skills?
4.	Follow the transaction through until the customer is satisfied?
5.	Apologize even when it's not your fault?
6.	Provide timely responses to requests?
7.	Provide assistance without being asked?
8.	Respond positively - what can you do, not what you cannot do?
9.	Speak clearly at all times?
10.	Show you are courteous? Say "Please" and "Thank you"?
11.	Maintain a non-judgemental attitude toward customer's questions?
12.	Communicate on the level of the customer?
13.	Acknowledge others for providing good customer service?

Customer service sample scenarios

1. You are serving someone in person and the phone rings. What do you do?
Should probably excuse yourself briefly from serving the person you’re already serving, apologise for the interruption and answer the phone and find out briefly what the caller requires. If the caller needs to be dispatched through to another library worker, do so. If you need to deal with them directly, ask them to wait briefly while you deal with the original patron waiting for your services, before returning to the phone call and dealing with it appropriately.

2. You are on the phone and someone comes to the desk. What do you do?
Acknowledge the library patron with a nod or smile, and try to finish the call. If the call is going to take some time, interrupt the caller and place them briefly on hold, before apologising to the library patron and finding out what their business is. It could be something simple and quick that they need that could get done before returning to the call.

3. You approach a customer service desk in a department store and two clerks are talking to one another. How do you feel? What would you like them to do?
Most people like to be acknowledged when they’re in a store and to feel that they’re at the centre of the clerk’s attention. Seeing two clerks talk suggests that they’re not concerned about business. Understandably when there is a brief period of ‘downtime’ general chit chat is expected to occur, but in general for most of the day, this shouldn’t be one of the main priorities someone has. Therefore, clerks should always be aware of what is going on around them, and if they need to have their conversation interrupted to make business, that should be the case.

4. You have tried to help an angry customer, but you feel that you have not completely addressed his or her concerns. What do you do?
Ask them if there is anything else that you can help them with. Ask them if they would be willing to submit feedback – anonymously if necessary – on how they feel that you have performed, or would have liked you to perform. If you feel that you’re not the appropriate person to deal with their concerns, ask them if they would like to talk to your supervisor. If the supervisor is available, introduce them. If they are busy, ask for the customer’s contact details and ask if it’s convenient to be contacted to discuss the situation further.

5. Someone has asked you to “bend the rules” in his/her favour. What is your first response?
No one should have the rules bent to their favour. If one person does, they could either expect the rules to be bent for them in the future, when they would like them to be, or all the time, or even tell other people, and therefore numerous people come to the library expecting rules to be bent in their favour. Therefore it’s necessary to abide to the rules as most as possible, with exceptions in special cases. There can sometimes be unfortunate circumstances that require the rules to be bent, and these circumstances need to be kept an eye on.

Customer service

What is customer service?

• Staff interacting positively and delivering the product the customer expects. 

Who are our customers?

• Customers will depend on the type of library. 
• School: Teachers, students 
• Public: General public, parents, adults, children, etc.
• College: Students, lecturers
• Special: Specific individuals who would benefit from the library

Three principles of good customer service

• Listen and act
• Show positive behaviour 
• Acknowledge good customer services 

Show positive behaviour 

• Approachable
• Attentive
• Helpful 
• Considerate
• Treat others how you wish to be treated 

Approachability 

• Open body language
• Eye contact
• Comfortable relaxed tone 

Attentiveness 

• Full attention 
• Listen without interrupting 
• Ask questions  

What makes a good listener? 

• Maintains eye contact
• Leans towards the customer 
• Smiles appropriately
• Ignores (meaningless) distractions 
• Gives total concentration 
• Uses encouraging sounds or motions 
• “Uh, huh”
• “I see” 
• “All right” 
• Nods head 
• Restates customer’s request 
• Clarifies customer’s request 
• Does not interrupt customer
• Does not finish customer’s sentence 

Helpfulness 

• Gives accurate information 
• Responding positively
• Checking understanding 

Consideration

• Respectful
• Patient
• Treat all customers as individuals 

Acknowledgement 

• Be sure to mention what was done right

Respect in the workplace

There are four different types of sexual harassment; disabled, emotional, racial and sexual.

The most common emotions a victim of harassment feels are humiliation, fear, anger, and intimidation. They will question “What did I do to deserve this?”

The difference between a formal and informal review or inquiry is that with an informal review, all parties agree on solutions, and an formal review is more like a court proceeding, complete with statements and witnesses.

If a man or woman works in a workplace predominantly full of workers of the opposite sex, who doesn’t approve of photos of half naked women or men, the photos can be taken down. They should feel comfortable in their workplace. Photos of this nature should be placed somewhere where no one can see them, or are forced to see them.

Emotional harassment is not covered by the law. This type of harassment can be redressed by suing in a civil court case, therefore contact a lawyer.

Basic Budget Primer: Choosing the Best Budget for Your Library

Devlin, Barry. “Basic Budget Primer: Choosing the Best Budget for Your Library.” The Bottom Line Reader: A Financial Hand Book for Librarians. New York: Neal Schumann, c1990. pp. 31-35.

The literature on budget preparation is almost redundant in pointing out that librarians insist on sticking with the line-item format despite evidence it is the least effective means of developing the library’s case for support. Perhaps we don’t make the shift because we lack the understanding of the four major budgeting techniques – line item, program, performance, and zero-based – and thus can’t evaluate the usefulness to our institutions.

A group of librarians at the Montclair Public Library decided to ferret out the facts about the budgeting process for our own edification as well as for popular consumption.

We began by settling on a definition of the budget that was acceptable to all of us and then setting out a series of questions. We asked: Is the line-item budget the frequent choice because of its easy applicability? Do program or performance budgets offer better avenues for fiscal control? How? Can zero-base provide the framework for ranking programs so that resources are allocated to the top priorities? When we knew enough to conclude the answer to all of these questions was yes, the most basic question emerged: How do library managers decide what budget format is best for their organizations? We then got more specific: What are the distinguishing features of the four budget types? What are their notable differences? What are their advantages and disadvantages? What type of data is needed for each of the formats and how are they compiled?

Defining “Budget”
A budget is variously defined as an itemized summary of probable expenditures and income for a given time period, usually involving a systematic plan for meeting expenses; a planning document used by an organization, generally prepared and presented in standard accounting formats emphasizing dollar revenues, expenditures, and costs; or an assessment of revenues that can be realistically anticipated. (Richard E. Wacht, Financial Management in Nonprofit Organizations. Atlanta: College of Business Administration, Georgia State University, 1987, p. 480; Ann E. Prentice, Financial Planning for Libraries, Metuchen, N.J. : Scarecrow, 1984, p. 27) We agreed, though, that the most useful definitions connects planning to control, by referring to budgeting as the process by which necessary resources are determined, allocated, and funded. 

Line-item budgeting
The logic behind the traditional line-item budget generally involves three steps:

1. Last year’s spending level is extrapolated into next year.
2. Last year’s level is incremented for increases in costs.
3. The spending level is further incremented for new projects and programs. The underlying assumptions in the traditional approach are that all activities making up last year’s spending level are essential to achieving the ongoing objectives, strategies, and mission of the organization: must be continued during the coming year; are now performed in the most cost-effective manner.

This budget format is accounting-oriented and directed toward answering the question “how much?” The line items, or objects of expenditure, serve as the focus for analysis, authorization, and control. Total amounts requested and expended for broad categories—such as personnel, supplies, and communications—are calculated for the entire library, as the excerpted budget in Figure 1 shows.   

Figure 1. The Line-Item Budget

Account code	Object	Actual Expenditure 1987	Request 1984
100300	Personnel
100301	Full Time	$748,322	$800,705
100302	Part Time	110,212	117,933
100303	Overtime	8,240	8,817
200300	Benefits
200301	Social Security	51,959	55,596
200302	Pension	75,345	80,619
200303	Health Insurance	32,000	34,240
	TOTAL PERSONNEL	$1,026,084	$1,097,910
300300	Materials
300301	Books	26,250	28,040
300302	Periodicals	18,611	19,913
300303	Databases	21,816	23,343
300304	Documents	5,300	5,671
	TOTAL MATERIALS	$71,977	$77,015
400300	Supplies
400301	Office	5,250	5,618
400302	Computer	3,190	3,413
500300	Communication
500301	Postage	12,600	13,482
500302	Telephone	4,500	4,815
500303	Datalines	13,500	14,445
600300	Conferences & Dues	8,500	9,095
700300	Staff Development	4,000	4,280
	TOTAL OPENING	$123,517	$132,163
	GRAND TOTAL	$1,149,601	$1,230,073

Incremental budgeting projects line-item numbers as derived from expenditures of the year before. In Figure 1, the 1988 funding request was calculated on a 7% across-the-board increase over 1987.

There are advantages to line-item budgeting. Line-item budgets are simpler to construct than other formats and are easy to compute. The individual lines are clearly defined; they emphasize control and tradition; they are comprehensible; little added explanation is necessary. But, on the downside, line-item budgets do not stress the library’s services to the public. Rather, emphasis is on services or commodities to be purchased by the library. Cost centers are not identified. And there is not sufficient historical data with which to discern major cost trends.

The Program budget
The program budget begins with the library’s goals, and objectives and the derivative goals and objectives of each of the library’s services.

Richard F. Wacht states, “The concept of program budgeting emphasizes the long-range perspective, or goals, in which the single year’s budget allocation represents the results of specific short-range decisions, or objectives, made within the context of the multiyear plan.” (Wacht, p. 320)

Program budgeting is a technique that formulates spending plans and then make appropriations on the basis of expected results. Expenditures are plotted to reflect quantified objectives. The program budget is derived for each area of service within a department, then brought together for the department as a whole. Figure 2, for example, is built for Adult Services. 

Figure 2: The program budget for adult services

Account Code	Object	Actual Expenditures, 1987	Request, 1988
100300	Personnel
100301	Full Time	$140,971	$150,839
100302	Part Time	29,680	46,758
100303	Overtime
200300	Benefits
200301	Social Security	18,320	19,326
200302	Pension	13,840	14,352
200303	Health Insurance	10,303	11,028
	TOTAL PERSONNEL	$213,314	$242,393
300300	Materials
300301	Books	24,600	24,950
300302	Periodicals	14,760	15,245
300303	Databases	16,810	15,731
300304	Documents	4,500	4,500
	TOTAL MATERIALS	$60,670	$60,426
400300	Supplies
400301	Office	2,500	1,500
400302	Computer	2,109	1,100
500300	Communications
500301	Postage	10,010	11,011
500302	Telephone	10,308	10,300
500303	Datalines	18,402	13,462
600300	Conferences & Dues	4,210	4,210
700300	Staff Development	4,200	4,200
800300	Programming	8,250	8,250
900300	Van Maintenance		500
	TOTAL OPERATING	$59,839	$54,533
	GRAND TOTAL	$353,973	$357,352

The department’s budget is projected for the personnel, materials, supplies, communications, and other categories of expenditure necessary to meet objectives outlined for 1988. If one of the department’s goals is to make service accessible to all community residents, it might be a good idea to initiate selection and delivery for the handicapped, aged, and shut-ins. The steps involved for that program budget might include:

1. Defining the program objectives for 1988 in terms of the output desired. For example: To establish within Adult Services a new selection and delivery service—called HAS—that reaches 20% of the community’s handicapped, aged, and shut-in residents in the first 12 months of operations.
2. Delineating the major activities necessary to accomplish the objective. For example: Within the first month, assign the task of coordinating the service and initiate contacts with other agencies, including the Fire Department, to locate the target audience. Complete a needs assessment of the HAS clientele by the end of the second month. By the end of the third month, provide in-house staff training for those who will provide the service.
3. Determining the nature and level of resources needed to support the activity. For example: One new staff member, a part-time professional librarian, is projected, assigned one-half time to coordinate the service and assist in fulfilling requests, creating patron profiles, and recording materials received; staff training can be accommodated with no increase over the 1987 allocation; delivery can be accomplished by streamlining current Branch trips. The materials needed are already incorporated into the library’s yearly acquisition program.
4. Developing the budget requirements, given the resources defined in step 3. For example: The salary request for a new half-time librarian is projected at $15,000; there is no benefit package since the job is 15 hours per week. The prorated share of van maintenance is $500.
5. Stating the requirements for all programs within Adult Services, using the same four-step process, as illustrated with HAS, then tallying the exact figures under categories common to all library operations and submitting them in one projected budget for the department.

Note that the program budget is not a formula approach. That is, unlike the line-item budget, the same percentage increase is not added to each 1987 line.

Program budgeting is a complex process. It is difficult to assign fiscal responsibility for programs that span several departments. And if goals and objectives are vague, the strength of the resulting data is vague.

But, clearly, when set out correctly, program budgeting can be much more useful than line-item budgeting. It not only provides the necessary data for costing out services based on objectives; it also provides historic data with which to assess cost trends.

The performance budget
While program budgets look at the expected results of services, performance budgets define the work performed to provide that service. Performance budgets emphasize output measures. Calculation of unit cost is added. Services are subdivided so that they can be described in terms of work input and service output. Program elements are broken down into their functions; activities into their individual work components. As Ann E. Prentice notes, performance budgeting helps administrators to “assess the work efficiency of operating units by: a) casting the budget in functional terms and b) providing work-cost measurements to facilitate the efficient performance activities.” (Prentice, p. 96)

One way to identify unit costs, as Figure 3 shows, is to divide the output totals for each program objective into the input costs. This is a simple but sometimes misleading method. A more accurate reflection takes painstaking measurements, as Michael Vinson’s article on costing the acquisitions function, on page 70, demonstrates.

  Figure 3. 1987 performance and unit costs for adult services

Input allocated	Service	Program objective	Output	Unit cost
$171,032	Reference	Provide telephone and walk-in responses to queries	117,955	$1.45
$77,461	Reader's Advisory	Provides assistance in selecting reading and other information sources	49,946	$1.65
$85,480	I & R	Provide information on and referral to community agencies	40,705	$2.10
TOTAL $333,973	Adult Services	Make services accessible to all community residents	205,604	x=$1.73

Because costing is explicit, performance budgets are useful in evaluating alternative means of carrying out the same activities. But, this technique does require a high level of accounting detail, time-consuming procedures to determine costs, and the capacity to handle more complex record keeping. Output measures must accurately reflect the key work performed in order to translate accurately into dollar requirements for support. For example, deriving unit cost for bookmobile costs inflates the cost per unit of service and disregards the more important and meaningful statistic in meeting program objectives—namely, the number of people served. In many quarters, these difficulties are combined with skepticism about the impact of performance data in the budget process; there is doubt that the level of effort results in a concomitant level of budgetary benefit.

The Zero-base budget
The Zero-Base Budget (ZBB) is popularly defined as an operating plan through budgeting that requires managers to justify their entire budget in detail from scratch – hence zero-base or cut back management – and to show why they should spend any money at all. This approach requires that all activities are identified in decision packages that are evaluated systematically and ranked in the order of importance (Peter Pyhrr, Zero-Base Budgeting: A Practical Management Tool for Evaluating Expenses, John Wiley, 1973, p. 5-7).

Wacht’s presentation of ZBB directs library managers to ask three questions: Should your area of responsibility be abolished? Can its functions be performed at a lower level of activity and remain as productive as last year? If your budget increases next year, will the incremental costs outweigh the incremental benefits?

There are four basic steps in ZBB:

1. Identifying decision unit. Current departments, or major service components like Adult, Young Adult, Children’s, Reference, and Technical Services, are frequently designated as the decision units. 
2. Formulating decision packages. A decision package is a document that defines the activities of each decision unit, the activities of each decision unit, so that managers can compare it to other decision units competing for limited resources. Two types of alternatives are considered when formulating decision packages—different ways to perform the same functions and different levels of effort needed to perform the function. The levels are: the minimum necessary to achieve the most important objectives, usually calculated at 50% to 75% of the current level of support; the status quo, or support at the current level; the higher level, which projects an increase.
   
   A series of questions is put to each of the library’s major services in creating decision packages: How many ways can the library’s objectives be accomplished? Which is the most effective way? What levels of functions and costs are possible? Following this review, the service’s activities are segmented into one of the alternative service levels—minimum, status quo, or increased. 


3. Ranking decision packages. Ranks are assigned by evaluating the cost of the decision packages and their order of importance in reaching the library’s objectives. 
4. Priority ranking of all decision packages. Following the initial ranking within the departments, the decision packages are forwarded to the appropriate managers, who merge them into a single list of prioritized packages. 

For example, under ZBB, the program managers within Adult Services would each prepare a decision package and submit it to the head of Adult Services, who would combine them into a budget request such as the one shown in figure 4. 

Figure 4: Zero base budget (ZBB) decision package 

Then the head of Adult Services, together with his or her program managers, would rank all the Services’ decision packages and send them to higher management in a prioritized format, such as the one shown in Figure 5.

Figure 5. Decision Package Ranking

(1) Rank	(2) PACKAGE NAME Adult Services		(3) Cumulative		(4) 1988 PROPOSED
		Positions	Total Expended (excl. cap)	Change	Positions	Total Expended (incl. cap)
1	Reference	4	171,032	0	4	$171,032
2	Reader's Advisory	1	77,461	0	1	77,461
3	I & R	2	85,480	0	2	85,480
4	HAS	0	-	100%	- 5	23,379
5
6	TOTAL	7	$333,973	7%	7 5	$357,252

 

Next, the heads of all the major library programs, together with the library’s top administrators, would look over the entire group of decision packages and reevaluate them to establish a single priority for support for the entire organization. 

ZBB adds priorities to unit cost data, all of which are presented in relation to goals and objectives. This technique calls for setting priorities within the base of the budget as opposed to using an incremental approach. But while prioritizing is appealing to many library managers, its worth is offset by the amount of paperwork required and the difficulty in identifying and justifying each activity. A good deal of time is consumed in documenting programs and in reviewing the documentation. 

Which budget is for your library?
In retrospect, the four budget types represent a hierarchy of decision-making information, planning, documentation, and record-keeping. The program budget focuses the process on the service aspect of librarianship by linking goals and objectives to fiscal requests. The performance budget adds measures of efficiency or productivity to supply current cost data. ZBB includes the strong points of the first two techniques and calls for priority ranking and the assumption that not all current programs are worthy of continued funding. Each of the three can be turned into a line-item budget with little added effort. If the library must submit a line-item budget to the ultimate funding decision-makers, it can employ any internal format it deems appropriate and then make the necessary translation. 

After careful study, we would conclude all four approaches to budgeting are needed to meet the many requirements of successfully representing the library’s case for support.

Budgets and Budgeting: Part II

Koenig, Michael. “Budgets and Budgeting: Part II.” Special Libraries, July/August 1977, pp. 234-240. Budgets and Budgeting Part II Michael Koenig Institute for Scientific Information, Philadelphia Pa 19106

• Two principal questions are addressed: how to construct a library budget and how to justify that budget. In addition, various techniques for navigating the political shoals surrounding budgets are discussed. 

THE first basic questions: How does one put the budget together? How does one arrive at the appropriate figures? 

Putting the budget together
Use the program budget concept. When you are next faced with the necessity to compile a budget, or better yet, sometime in advance of that necessity, try the concept of program budgeting, break down your operation into the appropriate programs or budgets, then cost out each program and do it without reference to what your present budget is. This process is called “zero base” budgeting. In other words, do not simply start with last year’s budget and modify it, start from scratch. Once these calculations are tempered with the political and financial realities of your organization, they are the basis of a sound budget presentation.

Standards
The most common approach is to use standards to determine the size of the library budget. Typically, these are standards of library services stated as some function of the community served. The standards need not be official to be useful. For example, what do other libraries supporting similar organizations spend? If published figures are not available, make some phone calls and compile them. Even in an industry like pharmaceuticals where confidentiality of information is a byword, such figures can be easily obtained; in fact, they are maintained by the professional trade association. In the pharmaceutical industry a figure of 3% of the research and development budget is a typical figure for library support. Other industries or other fields will have different norms, probably quite different. Standards will not be pertinent, unless they are derived from institutions similar to your own.

Standards, however, even if derived from libraries serving similar institutions, will be approximations only. Different organizations have different internal structures, different philosophies, and different ways of operating. In one company, for example, lab technicians may be expected to do the bulk of the literature searching. Another company may not be so generous with technician support. Thus the library may have to do substantially more literature searching. The function and the service supplied within the institution is similar, but the organizational structure and the budgets of the libraries will be radically different. Standards must be tempered to reflect the role of the library within the higher organization.

There are a variety of other standards that one can use. One norm, for example, is one library staff member for each 60-80 active borrowers. Another is that the ratio of clerical to professional staff should range between 1 to 1 and 3 to 1. The best exposition of general standards applicable to special libraries is probably that by Gordon E. Randall entitled “Budgeting for Libraries” (Randall, Gordon E. / Budgeting for Libraries. Special Libraries 67 (1):8-12 (Jan 1976). Such general standards, while typical, may not be applicable to a specific situation. It is useful, however, to know if a library is typical of its type, and if not, why it differs.

Most important, however, while standards may be quite useful for estimating your budget preparation, do not count on them to serve as justification. Administrators will probably not find them convincing. In general, your management will probably not be at all interested in standards (except accreditation standards for academic institutions). It is more likely that they will be interested in how well the members of their community think the library is providing service.

Build and maintain what might be called an “ammunition file.” When an article appears in a library journal calculating the percentage increase in the costs of serials or monographs, keep that information. When an article (Williams, Gordon et al. / Library Cost Models: Owning versus Borrowing Serial Publications. Office of Science Information Service, National Service Foundation, November 1967. 161 p. (NTIS PB 182304) appears reporting that the Center for Research Libraries has calculated the cost of interlibrary loans versus subscription to a journal, keep that information and cite it when appropriate.

The Incremental method
One method of constructing and also justifying a budget is what is called the incremental method. First define a basic minimum core level of service which the institution cannot afford to be without. That may be, for example, simply acquiring and processing a certain number of journals and books, making them available for the users, and maintaining some sort of circulation system to monitor their whereabouts. Determine the costs for that minimum core of service. Then define additional tiers of service above that core. For each tier define the new services, the benefits that will be achieved, and the incremental cost of these benefits. Recommend one particular tier as the most cost-effective for the organization and give some justification for your opinion. While the more elaborate the justification the better, involved arguments are not necessary. For example, simply state that up to a specific tier each new tier achieves a major improvement in service with relatively small incremental costs. Show that additional tiers above that point require substantial increases in services. It is wise, however, that your presentation is constructed so that you are not recommending the top tier. Show your administration that you are rejecting some higher priced alternatives.

Justifying the budget
Now for the second big question, “I’ve got a budget, how do I justify it?” Obviously the points mentioned above for determining the budget are the bulwark of the justification for the budget. There are, however, additional points that you can make.

Keep another sort of ammunition file. In it include such things as testimonials from users and examples of specific projects undertaken for your clientele. Ideally, of course, try to document cost savings, i.e., that such and such a search has saved X department tens of thousands of dollars. This is not always possible. At the very least be well armed with examples of what has been done for use when presenting budgetary requests. Do not try to dredge these things up at the last minute. The trick is to treat projects as future examples and to evaluate them when they are completed, or soon enough afterward that the results are still fresh. Quotes that such and such a project saved X many weeks of work, or made the completion of the project within the funding agency’s deadline possible are convincing. This statement may be self-evident. Yet it is often ignored because it seems slightly immodest to ask for accolades. Do not be reluctant, the questions can be asked in relatively objective terms, such as “How effective was the search?” If presented as part of a standard program of feedback and evaluation, users will perceive and accept such questions as the norm.

Performance figures
As described in performance budgeting, keep performance figures. Know how much it costs you to perform certain functions. Do not expose all those performance costs to the unenlightened whose reactions may be negative. Keep them to be used when it is in your best interests. For example, you can say, “Do you know how much it costs to compile a bibliography for Dr. X,” when questioned about the cost of bibliography compilation or of reference services. (Dr. X is, of course, a rising and productive star in the organization.)

Quantification
Quantify what you do as much as possible. Obviously it is useful to be able to document an increasing level of circulation or of reference questions answered. Set this information out graphically. A few minutes spent doing histograms or graphs can be time well spent. Keep such diagrams relatively simple however. The point of a histogram or graph is its clarity. A graph made for analysis may look like a road map, but a graph made for presentation should be simple and clear.

Fixed versus variable costs
A basic concept in accounting is a distinction between fixed costs and variable costs. Variable costs are costs that change with small changes in the volume of production or of operation (services rendered). Fixed costs are those costs that do not change with small changes in the volume of production or of operations. It does not mean an immutable cost. What is a fixed cost in one context is not necessarily a fixed cost in another context in which major changes in operations are contemplated. This distinction is important because it is frequently useful to analyze budgets or proposed operations in terms of fixed costs and variable costs.

It is typical of libraries that a high percentage of costs are fixed—principally payroll. This fact can frequently be used to good advantage. It can show, for example, that a 10% reduction in a library budget would have a major effect upon variable costs including such things as the number of journals subscribed to. On the other hand, it can show that a relatively small increase in the library budget could have an equally major effect upon the subscription or other services that the library can purchase. This observation, and a proper display of it, can be useful to argue against a relatively modest budget cut. Although minor somewhere else, it could be debilitating to the library and that, therefore, the organization ought to seek its economies somewhere else. Conversely, it can be used to make significant improvements in the library’s ability to produce a service. Obviously this argument can only be pushed so far—for example, to the point where one has to add or reduce staff. However, in the right context it can be useful.

Unchanged performance budget versus proposed budget
A useful technique in this era of substantial inflation is to compare the proposed budget with the budget required to continue the present level of service. Be sure to incorporate the necessary expenditure increases to cope with inflation. If you are proposing new services, such a comparison can make the point that a significant portion of the dollar increases results from inflation and that the new services you propose are not nearly so grandiose as the increase in dollars would have it appear. If, on the other hand, you are not so lucky as to be able to propose new services, such a comparison can document that a no growth budget (no growth in the eyes of the administration) is in reality a decrease in library services. Your administration may not be as aware as you are that the prices of journals and monographs is increasing faster than the general rate of inflation. Such a budget comparison can help you make that point more vividly.

Related items
There are a variety of items that, while not relating directly to the two principal questions discussed, are quite pertinent to budgeting and should be considered.

Financial Politics. Be aware of and use the politics in your organization. Politics is defined here in a broad way, including what might be called financial politics. Obviously if you are preparing budgets you know what the fiscal year of your institution is. Make use of that information. Check the political wind, particularly before the end of the fiscal year. In both profit and not-for-profit organizations there may well be situations at the end of the fiscal year in which the treasurer may not be at all adverse to spending money. In profit organizations, for example, present circumstances may be for reasonably good, and the projections for next year not quite so favorable. Therefore, anything that can be spent this year rather than next year will help maintain that appearance of a uniform and consistent rate of growth which companies like to be able to present to the financial public. In not-for-profit organizations it may be that money not expended this year will not be available next year. In addition, insufficient expenditure may be used as an argument for appropriating less money next year. Therefore the surplus ‘needs’ to be spent. In any case, ask questions and be aware of such situations. A purchase that may fill the treasurer with horror this fiscal year may be quite acceptable the next, or vice versa.

Similarly of course, the company may be tight on money at the end of the year or may want to cut back on purchases halfway through the year. If you have discretion on when you can make purchases or undertake programs, do it early while you have the money in your budget and before the organization decides to tighten its belt. This applies to such things as the purchase of major indexes and back-year cumulations, and to such things as travel or management development courses which are favorite areas for retrenchment.

Take an accountant to lunch. The advice may seem superficial, but it is not. If you are not part of the financial communication channel, you will not be privy to the information that will allow you to operate most effectively. In addition, having a channel to the financial office will make it easier to acquire the figures that you need and assistance in interpreting them. Budget information, with its accruals, transfer changes, distributed labor accounts, burden rates, etc., can be difficult to interpret without a friend at court, and your friendly (only if you make him or her so) local neighbourhood cost accountant can be a godsend.

Money versus People. Objectives of course can be accomplished in different ways. One way may be to add new staff, another way may be to put dollars in your budget that can be used to purchase outside services. There are obvious political tradeoffs here, one facet of which is that once you have a person on your staff, the person is there, the slot is there, and it acquires inertia. It is a major decision to cut back or eliminate the slot. For just that reason managers frequently tend to ask for increases to staff when other ways of achieving the same objective are available, for we feel we have achieved a long-term increase in our resources. For precisely that same reason, however, organizations tend to be resistant to hiring new staff. People are long-range commitments, commitments that can be cut back only with difficulty, and frequently with unpleasantness. Conversely, particularly in the case of for-profit organizations, your request for dollars is not likely to meet with such resistance, for the very reason that should the situation change, the faucet can be turned off easily. My personal opinion is that given the choice between asking for people or asking for dollars, one is better off asking for dollars. Granted the dollars are less irrevocable, yet one is far more likely to get what one wants. In fact, one can probably get more resources than if one asks for people. Furthermore, dollars are more flexible. A person only provides so many person-hours per week, but dollars spent on bibliographic on-line searching or dollars spent on information service bureaus can be spent precisely when needed.

One reason, but not a valid one, for the preference of librarians to add staff rather than dollars, is perhaps that our profession tends to measure the size of an organization by the size of its staff, not by its dollar budget. The budget of the information center of a major pharmaceutical company, for example, is not unlike the budget of a major university library. The tendency to measure size solely by the number of people directly employed, rather than by dollars, contributes to this myopia and unconsciously prejudices decisions.

Make or buy. In general, one should question seriously whether to perform a service that can be bought. If someone is selling a service, it is probably because that person or that organization thinks they can do it more efficiently and effectively by spreading costs over a larger economic base. Frequently they can. In economic terms this is described as the “make or buy” decision. When evaluating the make or buy decision, make sure that one is including all the costs involved in making it oneself.

Extra-Organizational Support. Don’t be hesitant about crossing organizational lines to seek extra support. Review what your library does and for whom. Is it providing services for people other than the organizational unit that picks up the tab? If it is, who are those people and what can be done to get some measure of support from them? Frequently in such a situation, if you can demonstrate that you are doing such work, you can get those organizations outside your own to support your operation, at least partially. Frequently that support will not be enough to completely cover the costs. Any degree of extra support, however, makes your budgetary life that much easier, not only because you have eased the load on your own organization but because you have demonstrated that you are cognizant of where your services are going and that you have the initiative and the fiscal intelligence and responsibility to seek appropriate additional support.

Library Committee/Customer Support. If you have a library committee or any sort of advisory committee, use it. If you do not have one, consider one. Consider carefully the people who will be on that committee. Do not necessarily go for the biggest and the most prestigious names. They may not have the time or the inclination. Do, however, deliberately try to pick the rising stars and the opinion leaders within your users. Not only are such people useful now, but they may be of major importance in a few years.

What are you being charged for? Be aware of what you are being charged for. For example, an overhead allocation may be based simply on the number of square feet that one’s department occupies. You may be able to point out that while that probably adequately represents the heating expenses for the library, it may substantially overcharge the library for telephone services or other support services such as janitorial services. Even though it may be suboptimal for the Accounting Department to change its method of allocation, you will at least be in the position of being able to explain why the allocation is so high and that, in fact, it overestimates the true cost of the library’s support services.

Controllable versus Non-Controllable. Along the same lines, make a distinction in your budget between controllable items and uncontrollable. For example, ‘books and subscriptions’ is a budget item that you control. The amount that you get charged by Data Processing, or for overhead, or distributed labor from other departments is probably an uncontrollable expense. Be aware of any of these uncontrollable items exceeding the budget estimate, and be prepared to point out that these are not items under your control. Divide your budget into two parts: a controllable part and an uncontrollable part. Then you will be in a position to demonstrate that the controllable part of your budget is in fact under control. If the data processing manager underestimated the effect of the new on-line systems upon his system throughput and has had to order four new disc drives whose costs have to be passed along to the customer, do not allow that happenstance to make it look as though you are going over budget. That is the DP Department’s problem, not yours. As an aside, when preparing a budget do not just extrapolate from last year’s charges for uncontrollable items. Get estimates from the DP manager, from the accountant, or whomever, as to what these items will be so that if something as described above happens, you cannot be accused of underestimating and underbudgeting.

Adhering to Budget. Know what the procedures in your organization are for adhering to budgets. In most for-profit organizations rigid adherence to the line items in your budget is not terribly important. What is important is whether you are staying within the overall envelope. Do, however, document why you are deviating. If your company has a budget updating cycle, request changes. Make sure that you and your boss have an understanding—whether that is a private understanding or whether it is a company policy—as to how the budget should be adhered to. Does he or she want to know of every minor deviation or is it acceptable to remain within the envelope? In governmental organizations, adherence to the line items of a budget is typically more rigid; modifications and exceptions typically have to be justified and approved. Do not hesitate, however, to go through the processes. Budgets should never be gospel. A budget is a planning tool and only a fool expects the world to stand still for a year. Do not be afraid to request budget changes. It is not an admission of poor planning or poor budgeting. Requests for budget changes, if done in a timely and well thought out fashion, can instead be an indication that you are staying on top of the situation and that you are maintaining your plans and your operations in as up-to-date a fashion as possible.

Confidence level
A major problem that we librarians face is the image that we have in the eyes of our managers or directors. Frequently we are perceived as professionals who know our field but who possess neither a realistic business sense nor financial acumen. This perception is frequently a serious constraint upon the librarian’s ability to adequately and efficiently perform the job. The budget is the ideal vehicle to dispel this conception and to build your superior’s confidence in your financial common sense. Demonstrate that you have in fact evaluated all alternatives. Demonstrate that you know that things cannot be justified on the basis of what has already been spent. Demonstrate that you know the conception of sunk cost and opportunity cost. As librarians, you are familiar with the concept of the invisible college. The easiest way to deal with programmers, for example, is to be a programmer, to be a member of that invisible college oneself. The next best, however, is to be able to speak the language. If one can demonstrate a familiarity with the field, then one will be accepted as at least an associate member. The same thing is true in dealing with those who will review and pass upon the library budgets. The community is not so clearly defined but there is obviously the same sort of sociological phenomenon working with managers, treasurers, directors, and administrators. If you can speak the language, and if you can demonstrate through your budget preparation that you are cognizant of the basic concepts of cost analysis and budgetary thinking, then you will have gone a long way toward establishing that confidence level. The budget will have been far more than just a delineation of what will be spent. 

Bibliography
Tudor Dean / The Special Library Budget. Special Libraries 63 (11):517-522 (Nov. 1972).

Kramer, Joseph / How to Survive in Industry—Cost Justifying Library Services. Special Libraries 62 (11):487-489 (Nov. 1971)

Lyden, Fremont J. and Ernest G. Miller / Planning, Programming, Budgeting—A Systems Approach to Management. Chicago, Markham, 1967.

Keller, John E. / Program Budgeting and Cost Benefit Analysis in Libraries. College and Research Libraries 156-160 (Mar 30, 1969).

Fazar, W. / Program Planning and Budgeting Theory. Special Libraries 60 (7):423-433 (Sep 1969).

Michael Koenig is director of library operations, Institute for Scientific Information, Philadelphia, Pa.