Pergamon Library Acquisitions: Practice & Theory, Vol. 18, No. 4, pp. 363-366, 1994

Copyright 0 1994 Ekevier Science Ltd Printed in the USA. AU rights reserved

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AN INTRODUCTION TO OUTSOURCING

JOYCE L. OGBURN

Chief Acquisitions Librarian

Yale University Library

New Haven, CT 06520

E-mail: joyce_ogburn@qm.yale.edu

Abstract - Outsourcing as a business strategy is discussed in relation to library practices. While contracting out services is being touted as a solution to many management problems, some government operations are moving to reduce use of contractors. As with other business arrangements, preliminary steps before consid- ering outsourcing, such as defining quality and the expectations of both parties, must be taken. Acquisitions and collection development librarians have extensive experience with managing contracts with vendors but also have to think in new terms and develop new relationshi& with vendor services expanding. Acquisitions librarians have many skills to offer in managing outsourcing arrangements, and general management and leadership abilities will still be necessary both for the staff working within the library and the contract services.

Keywords - Outsourcing, Contract services, Vendor services, A~qu~itions management.

BACKGROUND

Librarians articulate the mission of libraries very well; librarians are not as good at outlin- ing the costs of fulfilling that mission. Tough times and financial constraints have forced libraries to start behaving more like businesses: analyzing costs and looking for alternatives to the traditional models of doing library work.

Enter ou~ourcing, a strategy that is now being inv~tigat~ by increasing numbers of librar- ies and being offered by supporting industries. This special section of LAPT will provide four views of the outsourcing process. The first one, from Barbara Winters of Wright State Univer-

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sity, will provide some thoughts and advice from the perspective of a librarian presently managing an outsourcing program in cataloging. Second and third, Linda Crismond of Professional Media Services Corporation and Gary Shirk of Yankee Book Peddler, Inc., will present the contractor’s point of view, with a lot of business acumen and insight included. Last, there is a lengthy report of the results of a survey conducted by Carmel Bush, Margo Sasse, and Pat Smith at Colorado State University to determine which library business part- ners are providing outsourcing services for acquisitions, cataloging, and collection develop- ment; and further, what those services comprise. These four papers provide a solid basis for any librarian who wants to know more about outsourcing and how it can serve a library’s interests. This introductory paper presents a short overview and offers a few words on what it may mean to the acquisitions process.

OVERVIEW OF OUTSOURCING

Outsourcing should be viewed like any other strategic business move: as a way to lower costs while improving (or at least not sacrificing) quality, and as a means to better concentrate and support core services. Outsourcing in itself does not solve all of the library’s problems or auto- matically improve services. If this were true, why has outsourcing only recently become such a hot topic among librarians? In addition to librarians’ feeling more financial constraints, forc- ing them to seek alternative methods in serving their users, it has become easier for “outsid- ers” to perform traditional library functions. More librarians are willing (and available) to work outside of libraries; there is more shared access to publishing and bibliographic infor- mation; and vendors have incentives to make up revenue from lost sales due to decreasing library materials budgets. The contractors have opportunity, means, and motive. Entrepre- neurs have come to see the information business as an industry having a potentially large payoff [ 11.

Contrary to the current trend in libraries, some federal government agencies, including NASA, have moved away from using contractors as heavily as in the past. The rationale for the use of contractors was simple: contract employees were seen to cost at least 10% less than civil servants. Also, the government often had money that could be used for contractors, but not for hiring internal staff. When work had to be done that could not be handled by existing staff, there was little choice but to turn to contractors. In recent times these agencies have moved to consolidate more services and work in-house. Contractors were no longer func- tioning as short-term employees, but rather were becoming “senior” workers in government operations. More and more high level research and report writing was being done by non- government workers, and the knowledge and experience that the research bestowed was held by the contractors, not the government. This scenario represents the flip side of contracting our services: dependency and lack of control of essential knowledge and skills.

As with any business decision, there are many factors to consider before choosing outsourc- ing. Library goals, principles, and priorities should be clearly in mind. Are they being met? Would outsourcing help meet them? What are current workflows and associated costs? Will outsourcing be a long-term or short-term solution? Is the project a one-time solution or a commitment to eliminating the function in-house? Also, before making any changes, the deci- sion should be made whether the focus will be on outsourcing tasks, functions, or processes. These may seem to be fine distinctions, but they are very important ones. The focus will make a difference in the costs, workflow, and the results outsourcing brings. Generally speaking, a process or an entire function is appropriate for outsourcing. Outsourcing individual tasks

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would probably not result in any savings or improvement in quality. When considering outsourcing, take the opportunity to review the entire workflow and determine whether the work is essential, desirable, or even necessary before contracting it out. Potential contractors may be able to assist in reviewing and refining the workflow.

Since improved or sustained quality is usually a goal of outsourcing, quality should be defined in measurable terms. Like the cost of basic processing, librarians probably do not have a clear idea of how to measure quality. Before successful outsourcing can occur, library managers should decide whether quality work is defined by completeness, consistency, accu- racy, or adherence to specific standards; whether there is an acceptable error rate; and where quality control will take place. Once the focus and scope of the project is decided, the asso- ciated costs, opportunities, and potential savings and risks should be determined. The results of outsourcing will have to be measured in these terms as well.

In making any outsourcing arrangement, as with choosing any service provider, the respon- sibilities and expectations of the two parties should be clear and spelled out in the contract. Libraries have been managing contracts for years; it is part and parcel of many library func- tions. These contracts, however, have often been verbal and informal; a formal outsourcing contract may add another dimension to the usual means of doing business. As vendors provide more services to libraries, the more detailed and formal the contracts will likely become.

Librarians should keep some other important factors in mind when considering outsourc- ing. Before choosing the outsourcing option, librarians should decide that they are willing to give up some measure of flexibility and control over how a process is performed. Allowance should be made for changes in the library’s internal organizational structures, systems, budgets, or staffing patterns. If for some reason the contractor fails to fulfill the terms of the agreement, the library should have contingency plans. Outsourcing should be monitored to see that the work is being done correctly and that the costs continue to be less than those of performing the process in-house. There is no guarantee that outsourcing will always be the cheapest and most effective means to achieve an end.

OUTSOURCING, ACQUISITIONS, AND COLLECTION DEVELOPMENT

At this point it is pertinent to review the reasons acquisitions librarians use vendors to supply materials and services to the library. Librarians work with vendors primarily to consol- idate their points of contract in servicing an order. This is done in several ways, through firm orders, approval profiles, or standing orders. No matter which type of procurement is utilized, the library depends upon the vendor for order fulfillment. As vendors offer more services, there is the potential for libraries to realize greater gains in productivity by using a sole source both to provide materials and these enhanced services. The benefits are obvious: consolidated customer service, reliable contacts, customized services, integrated processing, fewer people performing related tasks, and centralized quality control (and of course, librarians are paying them to get it right). There are risks inherent in depending so much on one source; if any prob- lems were to arise with the vendor there would be many orders, funds, and processes at stake. Librarians, however, have been successfully outsourcing selection, ordering, and processing for years.

In many institutions, acquisitions responsibilities have expanded beyond the procurement process. Acquisitions and cataloging are becoming interwoven as integrated library systems have allowed acquisitions to participate in creating, and in many places completing, the bibli- ographic record. Also, the vendors that acquisitions librarians use are now providing biblio-

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graphic records, often representing full cataloging information, at the point of selection, order or receipt. In more and more libraries acquisitions responsibilities are expanding to include purchasing or acquiring the cataloged records for the library system.

We are also seeing many traditional library materials vendors expanding their services into areas not directly related to traditional procurement processes, such as providing bibliographic records, authority control, physical processing, and document delivery. The change in focus of services or in targeted service areas of the library is bound to influence established relation- ships and terms of business among acquisitions librarians and their suppliers. Librarians should be monitoring the effects that expanding services have on the core services of the vendor, while also suggesting new ways to work effectively with existing partners. Addition- ally, many other types of library service providers, such as bibliographic utilities, systems vendors and consortia, are growing more interested in the acquisitions process, hoping to forge strategic links with materials vendors in providing materials, records, and enhanced systems capabilities to improve their market share.

Acquisitions managers have much more to offer the library in support of managing outsourcing. They are skilled in writing and negotiating RFPs and contracts. Even if the outsourcing of existing acquisitions functions is not increased, acquisitions managers should be ready to assist in the evaluation of contractor’s services and to participate in the library’s review or planning of outsourcing options.

OUTSOURCING AND PROFESSIONAL EDUCATION

Outsourcing of library functions may, on the surface, seem to be a good reason to elimi- nate or curtail formal educational opportunities in the outsourced areas (most likely to be tech- nical services). To the contrary, the staff of contractors should be as well educated as library staff to perform these functions; they also need to become leaders in information manage- ment. Those who remain in the library to manage, monitor, and plan the outsourcing process should be highly trained managers: they also need to be effective leaders in the profession. Movement toward outsourcing does not mean the end of technical services; it may instead be the beginning of a new era of expanding professionalism and opportunity in library science and information management.

NOTES

1. Even in a small city like New Haven, a former consultant has seen potential in providing information to businesses and taking over management of their libraries. The Business Exchange, begun in 1994, provides business infor- mation for a fee and is managing and acquiring materials for a local accounting firm. The owner, Michael O’Malley, predicts outsourcing will be a big part of his business future. See Capot, Chris, “New Venture Provides Informa- tion-Fast,” New