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. There may also be ways that you can off-set costs either by improving efficiency in the long term or through income generation.
This is the process that a practitioner should follow to build this section of the business case. This should be a numbered list!
- 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)
- 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 different options (use APARSEN report for guidance)
- Identify costs per parameter for each option (preferably using a published cost model)
- 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)
This should describe the contents or structure of the business case, resulting from following the Process above
- Re-specify objectives of business case
- Identify options (informed by 4, 5, 6 and 7 above)
- Specify cost associated with each option - informed by 7, 8, 9, 10, 12, 13, specified per annum (see 1)
- Identify source of funding for the project - see 11 - for duration of business case validity
- Describe ROI
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
Scenario 3: Large CH institution moving to third party service provider
Notes relevant to tailoring this section to the appropriate audience and communicating the the business case to that audience Find out about accounting principles and communicate business case using appropriate financial terminology, eg ROI, FEC,
These are external resources of relevance to this section. Links can be incorporated into the text above if that is more useful
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
APARSEN D32.2 report under review, link to be added when published.
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