Outsourcing library services


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2006 presentation to CILIP in London on outsourcing of library and information services

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Outsourcing library services

  1. 1. Define your terms - making outsourcing work for information services Peter Griffiths Disclaimer – nothing in this presentation should be taken either to represent official practice or to criticise or endorse it from any official viewpoint
  2. 2. Outsourcing and externalisation <ul><li>Same difference? </li></ul><ul><ul><li>Outsourcing – the buying in of one or more parts of a service provided within or by an organisation </li></ul></ul><ul><ul><li>Externalisation – the buying in of a complete service from an external contractor </li></ul></ul>
  3. 3. Why libraries outsource <ul><li>To provide more services than they can currently afford from their funding </li></ul><ul><li>To take advantage of suppliers’ economies of scale </li></ul><ul><li>To avoid the need to maintain a high level of in house skills </li></ul><ul><ul><li>e.g. Internet outsourcing via an ASP </li></ul></ul><ul><ul><li>e.g. to focus on what they see as key professional issues by contracting out lower level activities </li></ul></ul><ul><li>To provide a hedge against future shortages of funds </li></ul><ul><ul><li>Contractual aspects of the arrangement </li></ul></ul><ul><ul><li>Case study to follow – where does money go first, disaster relief or libraries? </li></ul></ul><ul><li>To introduce innovative ideas </li></ul>
  4. 4. More than you think … <ul><li>Services outsourced by law libraries 1 </li></ul><ul><li>Bar coding </li></ul><ul><li>Billing/accounting </li></ul><ul><li>BindingBookkeeping  </li></ul><ul><li>Book purchasing </li></ul><ul><li>Cataloging </li></ul><ul><li>Computer center/technology management </li></ul><ul><li>Database access </li></ul><ul><li>Data recovery </li></ul><ul><li>Deacidification  </li></ul><ul><li>Disaster recovery </li></ul><ul><li>Document delivery </li></ul><ul><li>Document retrieval </li></ul><ul><li>Imaging </li></ul><ul><li>Indexing </li></ul><ul><li>Library move </li></ul><ul><li>Loose-leaf filing </li></ul><ul><li>Messenger services </li></ul><ul><li>Microfilming </li></ul><ul><li>Network management </li></ul><ul><li>Payroll preparation </li></ul><ul><li>PC management </li></ul><ul><li>Personnel/recruiting </li></ul><ul><li>Photocopy service </li></ul><ul><li>Printing </li></ul><ul><li>Records management </li></ul><ul><li>Research (AIIP) </li></ul><ul><li>Retrospective conversion </li></ul><ul><li>Routing </li></ul><ul><li>Shelving </li></ul><ul><li>Specialized research </li></ul><ul><li>Subscription management </li></ul><ul><li>Temporary staffing </li></ul><ul><li>Thesaurus development </li></ul><ul><li>Web page design/hosting </li></ul>1 – Ebbinghouse, C. Library outsourcing – a new look. Searcher , 10 (4), April 2002 http://www.infotoday.com/searcher/apr02/ebbinghouse.htm
  5. 5. Longer than you think … <ul><li>Library and information services have been outsourcing catalogue card production at least since 1902 … </li></ul><ul><li>Book servicing </li></ul><ul><li>Business Information Services, public enquiries </li></ul><ul><li>Book repair and binding </li></ul><ul><li>Stock pre-selection / approvals (Liverpool; New Zealand) </li></ul><ul><li>IT – see on </li></ul><ul><li>Schools services </li></ul><ul><li>Buildings (e.g. Brighton; Bournemouth; Newcastle) </li></ul>
  6. 6. Requirements and standards <ul><li>“ It is debatable whether libraries can hold contractors to in-house standards of professional development. Ultimately commercial enterprises, with their profit-making goals, could be at odds with the service-based goals of librarianship – a conflict that may be impossible to address through statements of work, directing performance and product requirements” </li></ul><ul><ul><ul><li>Outsourcing and privatization in American Libraries, ALA, 1999 </li></ul></ul></ul>
  7. 7. A current case study <ul><li>Bids to run Jackson-Madison County Library close this coming Friday </li></ul><ul><ul><li>Bidders being asked to provide additional services, including 65hrs a week opening, Sunday afternoons, coffee shop, minimum materials budget of 20% (cf. current 5-6% of total budget) </li></ul></ul><ul><ul><li>Front runner bidder LSSI says : </li></ul></ul><ul><ul><ul><li>We only take on clients we can bring benefits to </li></ul></ul></ul><ul><ul><ul><li>Any limits placed on material purchases or library offerings as well as privacy controls are all dictated by the Library Board and not by the company </li></ul></ul></ul>
  8. 8. Concerns in Jackson <ul><li>Staff </li></ul><ul><ul><li>“ If [the successful] company retains employees – and we have great employees – that would be no loss” – Jackson City councillor </li></ul></ul><ul><li>Accountability </li></ul><ul><ul><li>The library board “is giving away something that doesn’t belong to them – it belongs to the taxpayers of the county” – Madison County commissioner </li></ul></ul>
  9. 9. What can go wrong? <ul><li>I believe about 80% of the [outsourced] projects were incorrect and were sent back at least two to three times to be completed correctly. In some cases, it was easier to just fix the problem than to try to explain what the problem was for the contractors to correct themselves. </li></ul><ul><ul><ul><ul><li>Software developer, quoted in Computerworld, September 2003 </li></ul></ul></ul></ul>
  10. 10. Some high profile examples from the world of business* <ul><li>Inland Revenue ends contract with EDS </li></ul><ul><li>Child Support Agency </li></ul><ul><ul><li>“ The supplier alleged that the customer had ordered 2000 changes from the original requirements” – Adam Ripley, IS Integration.com </li></ul></ul><ul><li>Department of Work and Pensions </li></ul><ul><li>Cahoot </li></ul>* widely written about in the computer press and online!
  11. 11. Define the requirement – but why? <ul><li>The primary bug bear for suppliers in the outsourcing environment is often that the customer’s requirements can change vastly from what was originally requested </li></ul><ul><li>Constant changes to the system can have repercussions on the testing programme, so all changes have to be monitored carefully and appropriate testing procedures amended in accordance.  </li></ul><ul><ul><ul><ul><ul><li>IS Integration.com </li></ul></ul></ul></ul></ul>
  12. 12. The importance of definition <ul><li>Remember that outsourcing should define the service, standards and levels of service but leave the supplier to decide how to deliver them </li></ul><ul><ul><ul><ul><ul><li>“ Companies box themselves into a corner … they do not focus on standardisation internally, so it becomes difficult to manage projects. In desperation, they outsource. This strategy is likely to fail.” – Alan Frank, Hackett consultants, quoted Computer Weekly, 10 May 2005 </li></ul></ul></ul></ul></ul><ul><li>Concerns cannot be addressed unless the specification deals with them – and the outsourcing manager will be blamed if there is a problem </li></ul><ul><li>How else will you know whether the supplier is delivering to target?! </li></ul><ul><li>Is it included or is it an extra cost? </li></ul><ul><ul><ul><ul><ul><li>Deloitte 2005 survey on outsourcing user satisfaction found that 38% of participants had paid additional or hidden costs for services they thought were included in the contract costs </li></ul></ul></ul></ul></ul>
  13. 13. Reasons to define requirements <ul><li>Establishing the service to be provided </li></ul><ul><ul><ul><li>Helping the supplier to understand what’s wanted, and to cost this reliably (and maybe keeping him in business) </li></ul></ul></ul><ul><ul><ul><li>Managing expectations on both sides </li></ul></ul></ul><ul><ul><ul><li>Providing a benchmark for measuring success </li></ul></ul></ul><ul><li>Establishing that all parties are speaking the same language </li></ul><ul><ul><ul><li>Routing and circulation </li></ul></ul></ul><ul><ul><ul><li>Urgent, Rush, Priority or [your trade name here] </li></ul></ul></ul>
  14. 14. Say what you want <ul><li>Analysing the current service </li></ul><ul><ul><li>Essential / desirable / nice to have </li></ul></ul><ul><ul><li>Core / non-core </li></ul></ul><ul><ul><li>Professional / non(para)-professional </li></ul></ul><ul><ul><li>Performed in-house / outsourced </li></ul></ul><ul><li>Traditionally supposed that the non-core, nice-to-have items are outsourced but this isn’t now necessarily so </li></ul>
  15. 15. Say what you want <ul><li>The discipline of the Service Level Agreement </li></ul><ul><li>You can never have too much precision </li></ul><ul><ul><li>Though you can have too much detail! </li></ul></ul><ul><ul><li>Precision will let you judge better whether the offer matches your requirement </li></ul></ul><ul><li>Plan for failure (in the hope it never happens) </li></ul><ul><ul><li>Build in communication and escalation </li></ul></ul><ul><ul><li>Plan for in-sourcing if things go wrong </li></ul></ul><ul><ul><ul><li>Keep an eye on the market! </li></ul></ul></ul><ul><ul><li>Don’t forget that contracts have an end date </li></ul></ul><ul><ul><ul><li>4 years under new EU regulations – shorter than you think! </li></ul></ul></ul>
  16. 16. Tell others what you want <ul><li>Ensure that everyone understands the contract </li></ul><ul><ul><ul><li>Your bid team and customers </li></ul></ul></ul><ul><ul><ul><li>The supplier’s bid team and front line staff </li></ul></ul></ul><ul><li>Communicate with the rest of your organisation as well as the suppliers </li></ul><ul><li>Be prepared for reactionary reactions </li></ul><ul><li>Be prepared to support a supplier who is taking risks to support you </li></ul>
  17. 17. Risks and mitigation <ul><li>Key risks : </li></ul><ul><ul><li>The size of the supplier market </li></ul></ul><ul><ul><li>The ability of that market to offer a sensible price and a viable service </li></ul></ul><ul><ul><li>The Library’s ability to manage the supplier relationship (and its internal customers) </li></ul></ul><ul><li>Mitigation </li></ul><ul><ul><li>Monitoring the market, monitoring the contract </li></ul></ul><ul><ul><li>Communication, communication, communication </li></ul></ul><ul><ul><li>Precision of definition, sensible negotiation </li></ul></ul>
  18. 18. Outsourcing and the IT function <ul><li>Ebbinghouse only identified PC management </li></ul><ul><li>Libraries also outsource : </li></ul><ul><ul><ul><li>IT systems (obviously, if part of a PFI or PPP) </li></ul></ul></ul><ul><ul><ul><li>Website management and hosting </li></ul></ul></ul><ul><ul><ul><li>Library management software (e.g. Essex) </li></ul></ul></ul><ul><li>Advantages </li></ul><ul><ul><ul><li>keeping up-to-date </li></ul></ul></ul><ul><ul><ul><li>sticking to the knitting – IT by the IT professionals </li></ul></ul></ul><ul><ul><ul><li>can form part of a larger contract </li></ul></ul></ul>
  19. 19. Conclusions <ul><li>Outsourcing is common and has a record of success </li></ul><ul><li>There is also however a record of failures which have a common thread of failure to specify </li></ul><ul><li>Precision helps all parties to understand their roles and responsibilities </li></ul><ul><li>Precision of specification makes measurement easier </li></ul><ul><li>Outsourcing is a partnership – the parties benefit from mutual support </li></ul><ul><li>Communication through precise specification will allow expectations to be managed successfully </li></ul>
  20. 20. Resources <ul><li>Managing outsourcing, (Pantry S and Griffiths P), Facet, 2004, 1-85604-543-9 £32.95 Chapter 1 available for download at http://www.facetpublishing.co.uk/documents/PG%202004%20Ch1.pdf </li></ul><ul><li>Externalisation et sous-traitance dans les services d’information (Martin, I and others), Paris, ADBS, 2002 2-84365-076-3, 27€ </li></ul><ul><li>The Impact of Outsourcing and Privatization On Library Services and Management : A Study for the American Library Association (Martin, R S and others) Available online at http://www.ala.org/ala/oif/iftoolkits/toolkitrelatedlinks/outsourcing_doc.pdf </li></ul><ul><li>Internet outsourcing using an application service provider : a how-to-do-it manual for librarians (Matthews, J R) New York, Neal Schuman, 2001 1-555-70422-0 </li></ul><ul><li>National Outsourcing Association www.noa.co.uk </li></ul>