Difference between revisions of "Costs"

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An outline of costs is a fundamental element of any business case. For the business case itself the break down of costs need not be overly detailed, but below we outline some of the factors you may need to consider when estimating costs, as well as some of the tools that are available for cost modelling. There is no 'one size fits all' tool avialable for cost modelling, hence if you do choose to go down this route you may find yourself using a combination of cost modelling tools or modifying a tool to your situation. Some of the costs of DP are difficult to calculate because they may be integrated into other activities within your organisation, but it is important to think about these and as they will have an impact on the implementation of the business case.
[[File:BitRot web.png|right|Bit rot!]]
An outline of costs is a fundamental element of any business case. For the business case itself the break down of costs need not be overly detailed, but below we outline some of the factors you may need to consider when estimating costs, as well as some of the tools that are available for cost modelling. There is no 'one size fits all' tool available for cost modelling, hence if you do choose to go down this route you may find yourself using a combination of cost modelling tools or modifying a tool to your situation. Some of the costs of DP are difficult to calculate because they may be integrated into other activities within your organisation, but it is important to think about these and as they will have an impact on the implementation of the business case.
There may also be ways that you can off-set costs either by improving efficiency in the long term or through income generation.
There may also be ways that you can off-set costs either by improving efficiency in the long term or through income generation.
==Process==
==Process==
''This is the process that a practitioner should follow to build this section of the business case. This should be a numbered list!''
''Use this to identify where costs will occur from the business activity your case is focused on, and estimate what those costs will be.''
# Identify the time period relevant to the business case (e.g. are you asking for a one-off lump sum, or recurring costs over a period of time, e.g. 5 years).
# Examine the business requirements for digital preservation (will enough value be realised by the proposed activity to offset and justify the costs?).
# Identify the scale and type of the activity you are proposing (e.g. one-off, project, phased project, large scale programme, core activity).
# Assess the current environment (do you have internal capacity, capability, appetite?). A skills gap analysis exercise could be useful here. See [http://wiki.opf-labs.org/display/SPR/Collated+business+plan+results+from+SPRUCE#CollatedbusinessplanresultsfromSPRUCE-SkillsGapAnalysis exercise results from the SPRUCE Mashups] for more information and examples.
# Identify and understand the systems and processes you are proposing (external system with minimal on-site support or in-house development).
# Identify different types of options for achieving the objectives.
# Identify how much has (or is) already been spent on this activity.
# Identify cost parameters associated with digital preservation activities (Section 3 of the APARSEN report on Cost modelling is useful for guidance).
##Governance.
##Organisational Structure/staffing.
##Procedural accountability/policies.
##Financial sustainability.
##Contracts, licenses, and liability.
##Preservation planning.
##Ingest: acquisition of content .
##Storage
##Information management.
##Access management.
##Technical infrastructure risk management.
##Security risk management.
# Identify costs per parameter (there are a number of a published cost model which might help, see below).
# Identify potential sources of funding (internal, external, core, project).
# Identify staff costs (current capacity, can you move staff, how agile is the organization to move people around?).
# Identify training costs, immediate and continuing (skills and skills gaps) (what is your current state?  Do you need to skill up quickly or keep people in-the-loop)(see [[Institutional readiness]]).
# Identify potential for return on investment (ROI).


==Content==
''Use this to check that the process above has helped you generate the right content for your business case.''


# Identify the time period relevant to the business case (e.g. are you asking for a one-off lump sum, or recurring costs over 5 years)
Following the process above should have helped you identify your business case activities that will incur a cost and begin to estimate what those costs will be.
# What are your business requirements for digital preservation? (can the value of the activity be compared to the costs
# What is the scale of the programme you are proposing?  (Is it a project, phased, or full blown program???)
# Files types (assets)(what part of the collection or collections are you proposing to preserve)
# What is the current environment?  Do you have internal capacity? appetite?
# What type of system and processes are you proposing (external system (with minimal on-site support or in-house development)
# Identify different types of options for achieving the objectives
# Identify how much has (or is) already been spent on this activity
# Identify cost parameters associated with digital preservation activities (Section 3 of the APARSEN report on Cost modelling is useful for guidance)
# Identify costs per parameter (there are a number of a published cost model which might help)
# Identify potential sources of funding (internal, external, core, project)
# Identify staff costs (current capacity, can you move staff, how agile is the organization to move people around?)
# Identify training costs, immediate and continuing (skills and skills gaps) (what is your current state?  Do you need to skill up quickly or keep people in-the-loop)(see section in institutional readiness)
# Identify potential for return on investment (ROI)


==Content==
If you are using a business case template, you may have to present your costs in a certain manner. For example, as part of an "Options appraisal". For more information see the parent section on [[Option appraisal/value for money analysis/return on investment]]. The following sections provide some suggestion as to how to incorporate costs into your Options Appraisal or ROI section:
''This should describe the contents or structure of the business case, resulting from following the Process above''
# Re-specify objectives of business case
# Re-specify objectives of business case
# Identify options (informed by 4, 5, 6 and 7 above)
# Identify options (informed by 4, 5, 6 and 7 above)
Line 29: Line 43:


==Scenarios==
==Scenarios==
'''Scenario 1: HE institution business case for a new repository system'''
 
1. Determine/estimate costs for infrastructure:  
====Scenario 1: HE institution business case for a new repository system====
* hardware
 
* software
1. Determine/estimate costs for infrastructure:  
* licences
* hardware
2. Determine/estimate costs for training
* software
3. Determine/estimate costs for staffing
* licences
* salaries
 
* recruitment
2. Determine/estimate costs for training
4. Recurrent costs
 
3. Determine/estimate costs for staffing
* salaries
* recruitment
 
4. Recurrent costs
   
   
'''Scenario 2: Local archive business case for a digital preservation officer'''
====Scenario 2: Local archive business case for a digital preservation officer====


1. Identify costs for staffing
*salaries
*recruitment


2. Identify costs for equipment
*hardware
*software


'''Scenario 3: Large CH institution moving to third party service provider'''
3. Identify costs for IT support
*internal/external storage


==Communications==
4. Outline the costs of doing nothing
''Notes relevant to tailoring this section to the appropriate audience and communicating the the business case to that audience''
*legal implications
Find out about accounting principles and communicate business case using appropriate financial terminology, eg ROI, FEC,


==Resources==
5. Benefits of exploitation of assets - financial and reputational
''These are external resources of relevance to this section. Links can be incorporated into the text above if that is more useful''
*offset the costs


APARSEN D32.1 Report on cost parameters for digital repositories http://www.alliancepermanentaccess.org/wp-content/uploads/downloads/2013/03/APARSEN-REP-D32_1-01-1_0.pdf
====Scenario 3: What is the the cost of doing nothing?====
The cost of doing nothing can result in loss of reputation, obvious loss of materials, inability to share content,
loss of investment or future revenue, potential loss of core funding and staffing.
Potential disasters as a result of doing nothing would be the catastrophic loss of cultural heritage or memory.


APARSEN D32.2 report under review, link to be added when published.
==Resources==
 
''Use this to find additional help on digital preservation costing.''
Minnesota Historical Society cost modeling.  http://www.mnhs.org/preserve/records/legislativerecords/carol/costmodels.htm


Minnesota Historical Society. Digital Preservation Case Study Information. http://www.mnhs.org/preserve/records/legislativerecords/docs_pdfs/DigitalPreservationBusinessCaseInformationCRK10_5_2011.pdf
*[http://wiki.opf-labs.org/display/CDP/Home A list of digital preservation costing tools and other resources].
*4C project website http://www.4cproject.eu/ including '[http://www.4cproject.eu/index.php/news-and-comment/4c-blog/31-cache-in-the-attic-by-william-kilbride Cache in the attic]'.
*[http://www.alliancepermanentaccess.org/wp-content/uploads/downloads/2013/03/APARSEN-REP-D32_1-01-1_0.pdf APARSEN D32.1 Report on cost parameters for digital repositories].
*APARSEN D32.2 report under review, link to be added when published.
*[http://www.mnhs.org/preserve/records/legislativerecords/carol/costmodels.htm Minnesota Historical Society cost modelling].
*[http://www.mnhs.org/preserve/records/legislativerecords/docs_pdfs/DigitalPreservationBusinessCaseInformationCRK10_5_2011.pdf Minnesota Historical Society.  Digital Preservation Case Study Information].

Latest revision as of 20:10, 24 April 2014

Bit rot!

An outline of costs is a fundamental element of any business case. For the business case itself the break down of costs need not be overly detailed, but below we outline some of the factors you may need to consider when estimating costs, as well as some of the tools that are available for cost modelling. There is no 'one size fits all' tool available for cost modelling, hence if you do choose to go down this route you may find yourself using a combination of cost modelling tools or modifying a tool to your situation. Some of the costs of DP are difficult to calculate because they may be integrated into other activities within your organisation, but it is important to think about these and as they will have an impact on the implementation of the business case. There may also be ways that you can off-set costs either by improving efficiency in the long term or through income generation.

Process

Use this to identify where costs will occur from the business activity your case is focused on, and estimate what those costs will be.

  1. Identify the time period relevant to the business case (e.g. are you asking for a one-off lump sum, or recurring costs over a period of time, e.g. 5 years).
  2. Examine the business requirements for digital preservation (will enough value be realised by the proposed activity to offset and justify the costs?).
  3. Identify the scale and type of the activity you are proposing (e.g. one-off, project, phased project, large scale programme, core activity).
  4. Assess the current environment (do you have internal capacity, capability, appetite?). A skills gap analysis exercise could be useful here. See exercise results from the SPRUCE Mashups for more information and examples.
  5. Identify and understand the systems and processes you are proposing (external system with minimal on-site support or in-house development).
  6. Identify different types of options for achieving the objectives.
  7. Identify how much has (or is) already been spent on this activity.
  8. Identify cost parameters associated with digital preservation activities (Section 3 of the APARSEN report on Cost modelling is useful for guidance).
    1. Governance.
    2. Organisational Structure/staffing.
    3. Procedural accountability/policies.
    4. Financial sustainability.
    5. Contracts, licenses, and liability.
    6. Preservation planning.
    7. Ingest: acquisition of content .
    8. Storage
    9. Information management.
    10. Access management.
    11. Technical infrastructure risk management.
    12. Security risk management.
  9. Identify costs per parameter (there are a number of a published cost model which might help, see below).
  10. Identify potential sources of funding (internal, external, core, project).
  11. Identify staff costs (current capacity, can you move staff, how agile is the organization to move people around?).
  12. Identify training costs, immediate and continuing (skills and skills gaps) (what is your current state? Do you need to skill up quickly or keep people in-the-loop)(see Institutional readiness).
  13. Identify potential for return on investment (ROI).

Content

Use this to check that the process above has helped you generate the right content for your business case.

Following the process above should have helped you identify your business case activities that will incur a cost and begin to estimate what those costs will be.

If you are using a business case template, you may have to present your costs in a certain manner. For example, as part of an "Options appraisal". For more information see the parent section on Option appraisal/value for money analysis/return on investment. The following sections provide some suggestion as to how to incorporate costs into your Options Appraisal or ROI section:

  1. Re-specify objectives of business case
  2. Identify options (informed by 4, 5, 6 and 7 above)
  3. Specify cost associated with each option - informed by 7, 8, 9, 10, 12, 13, specified per annum (see 1)
  4. Identify source of funding for the project - see 11 - for duration of business case validity
  5. Describe ROI

Scenarios

Scenario 1: HE institution business case for a new repository system

1. Determine/estimate costs for infrastructure:

  • hardware
  • software
  • licences

2. Determine/estimate costs for training

3. Determine/estimate costs for staffing

  • salaries
  • recruitment

4. Recurrent costs

Scenario 2: Local archive business case for a digital preservation officer

1. Identify costs for staffing

  • salaries
  • recruitment

2. Identify costs for equipment

  • hardware
  • software

3. Identify costs for IT support

  • internal/external storage

4. Outline the costs of doing nothing

  • legal implications

5. Benefits of exploitation of assets - financial and reputational

  • offset the costs

Scenario 3: What is the the cost of doing nothing?

The cost of doing nothing can result in loss of reputation, obvious loss of materials, inability to share content, loss of investment or future revenue, potential loss of core funding and staffing. Potential disasters as a result of doing nothing would be the catastrophic loss of cultural heritage or memory.

Resources

Use this to find additional help on digital preservation costing.