The library as a business: mapping the pervasiveness of financial relationships in today's library - Library Finance: New Needs, New Models

Abstract

This article is a trend analysis, using the college library as a model, which maps internal and external financial contacts in order to develop an awareness of the pervasive complexity of library financial dealings. Topics for consideration include: the degree to which all the library units have financial transactions within the parent organization and with outside providers of goods and services, placing the library in perspective as a component of the parent organization in terms of financial credits and debits. The library is considered as a unit of the worldwide, financial infrastructure. The article will also provide an analysis of financial causal factors responsible for increasing library organizational complexity as well as trends in financial relationships that can lead to the provision of top quality library services.

INTRODUCTION

Finance, money, investments, fund-raising, contracts, leasing, budgeting. Do these words seem to dominate the librarian's life today? For any library administrator, fiscal management has always played a dominant role. However, it is interesting that financial health, activities, and related issues are central to the daily functions of an increasing number of staff.

If the concept that "the library is a business" seems passe, this essay will have no appeal. If one were to map the financial relationships and examine the, energy that goes into those relationships, it would be clear that the library is a business and will continue

as a business for the foreseeable future.

Total Quality Management (TQM) has stormed into industry and libraries with as many variations of themes as there are consultants promoting the concept. Libraries are no different from businesses which have found insight into financial relationships and organizations from the writings of W. Edwards Deming (Neave, 1990; Walton, 1986). One constant TQM theme stressed by Deming is the need to understand relationships.

* Who are the customers?

* How does work get done?

* What internal relationships affect quality?

* Who are the key players and teams in the organization?

Deming stresses analyzing activity within the organization. Mapping the relationships visually forces one to think through implications. The following figures map current financial relationships on several levels. With the library as the central single unit:

* What other units in the parent organization does the library deal with financially?

* With what external financial institutions, vendors, and individuals does the library have a financial relationship?

* Which library staff at what intensity deal with these financial relationships?

* How is the library perceived as part of larger industries?

The following figures will document and confirm the increasing number and complexity of library relationships and enable one to understand and improve financial methods and approaches.

Major findings from this mapping are:

* Financial relationships touch almost every unit on campus.

* Relationships can be broken into subcategories to explain how one unit interacts with other units.

* Relationships can be multiple. Many units could be placed in several subcategories. the authors chose to categorize them as dominant roles but believe that multiple relationships are equally critical to management success.

* Although this is a college model, all libraries have a multitude of internal financial relationships if they are part of a larger parent organization.

* Any sense that the library is an independent agent within the organization is quickly dispelled.

External relationships are another part of the financial model. Again, the categories chosen to review library operations are not inherently good or bad. Each institution may pick and choose whatever plan makes sense to them. As shown in Figure 2, some patterns are different from previous years.

New technology vendors evolve into two subcategories. Some come from traditional library/vendor relationships and are set up as such. Many were never part of a traditional library company or service and have introduced increased complexities in leasing, planned obsolescence, and maintenance contracts. Bentley College's Computer Center has increased its service role and control over technical aspects because it has special expertise in many of the financial areas of technology management.

Cooperatives/vendors are an important financial entity in the library external market. Along with traditional cataloging cooperatives, there is an increasing number of technology and purchasing cooperatives. Cataloging cooperatives are expanding services and prepayment systems (acting as a bank of sorts) and have become jobbers competing against traditional library vendors.

General service vendors compete against traditional internal suppliers (see Figure 1). Privatization of complete libraries is interesting as it shifts the library from an internal entity to a general service vendor role. Even as most institutions still support their libraries directly, services such as custodial/cleaning, printing, photocopy, physical building maintenance, payroll, travel, consulting, legal services, and communications which were formally provided by campus-based units may now be provided by outside private contractors. What was a financial relationship of internal billing, charge backs, negotiated goodwill, and budget exchanges is now straight purchasing from an outside vendor.