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Identifying and Securing the Requisite Resources. Anne R. Kenney, Cornell University USA Business Models related to Digital Preservation, Amsterdam, 20-22 Sept 2004. How do we identify and secure the requisite resources to maintain a digital repository?.

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identifying and securing the requisite resources

Identifying and Securing the Requisite Resources

Anne R. Kenney, Cornell University USA

Business Models related to Digital Preservation, Amsterdam, 20-22 Sept 2004

if we had some horses we d have a cavalry if we had some men

“If we had some horses, we’d have a cavalry – if we had some men."

Victor Mature in Demetrius and The Gladiators, 1954

step 1 identify cost categories
Step 1. Identify Cost Categories

Cost categories

  • Startup costs
  • Ongoing costs
  • Contingency costs
step 2 identify cost centers
Step 2. Identify Cost Centers
  • Capital costs
    • Technical/procedural infrastructure
  • Direct operating costs
    • By functions, e.g., identification, acquisition, ingest, metadata
  • Overhead
    • Indirect operating expenses, e.g., indirect staff, facilities, general/administrative/support services
step 3 calculate costs case study arxiv
Step 3: Calculate Costs Case Study: ArXiv
  • automated electronic archive and distribution server for research papers in physics, cs, math, etc.
  • Begun in 1991
  • 281,00 item database in FY2003/4 40,000 submissions that year
  • Cost/submission: $1-$5
calculate capital equipment costs
Calculate Capital Equipment Costs

Annual equipment cost =

  • purchase price of hw/sw
  • amortization rate (3-5 year range)
  • annual maintenance,licenses, and development fees, estimate at 20%-50% purchase price
capital equipment arxiv server
Capital Equipment: ArXiv Server
  • Equipment cost: $10,600
  • Amortization: 5 years
  • Annual fees: $4,713
  • Annual equipment cost =

$6,833($10,600/5 + $4,713)

equipment costs preserved digital object
Equipment costs/ preserved digital object
  • Calculated by dividing the annual equipment costs by the current and estimated growth rate of digital objects
  • The greater the number of similar digital objects, the lower the per/object equipment cost.
arxiv annual equipment costs
ArXiv Annual Equipment Costs
  • 281,000 submissions
  • 40,000 in FY 2003/4
  • $6,833/40,000 =

$ .17/submission

  • $6,833/281,000 = $.02/item/year
calculate personnel costs
Calculate Personnel Costs
  • Staff performing specific tasks, management overhead, ancillary expenses
  • Calculate staff costs on “weighted hourly rate” not salary, which is over twice the hourly wage
weighted hourly rate
Weighted Hourly Rate
  • Avg. number of workdays/ year
  • Number of hours/day
  • Number of productive hours
  • Weighted hourly rate =

salary + fringe

productive hours

calculating the real costs at cornell
Calculating The “Real” Costs at Cornell

Staff:

  • 222 day work year (excluding vacation, sick, personal and holidays)
  • 7.3 hour work day (excluding breaks)
  • 1,621 hours/year at work
  • Assume 75% “production time”: 5.5 hours/day and 1,216 hours/year
  • “Weighted hourly rate” =

salary + fringe

1,216

arxiv programmer analyst band f
ArXiv: Programmer/ Analyst Band F
  • Annual hours worked: 1,216
  • Beginning salary: $35,000
  • Benefit rate: 31%
  • Hourly wage: $18
  • “Weighted hourly rate”: $35,000 x 1.31 = $37.71 1,216

Weighted rate is 2.1 times the hourly wage.

management and ancillary costs
Management and Ancillary Costs
  • % of management overhead assigned/staff member
  • Ancillary expenses (min: $2,00/year)
    • training, travel, workstation support, supplies, phone/data, reference materials
  • Overhead
example full freight programmer analyst
Example: Full Freight Programmer/Analyst

$37.71 (WHR)

+ $ 6.85 (10% mgr overhead)

+ $ 1.16 (ancillary expenses)

$45.72

X $ 1.57 (overhead)

$71.78

calculate services costs
Calculate Services Costs
  • Annual or contractual fees paid for out-sourced functions, including backup, space in server farm, mirroring
  • Related services, e.g., technology monitoring, subscription to software repository, consortial fees, royalties
step 3 calculate costs contingency
Step 3. Calculate Costs: Contingency
  • Unanticipated expenses associated with ramp-up, training, trouble shooting
  • Will vary from institution to institution, depending on complexity, experience, size of effort
step 3 calculate costs overhead
Step 3. Calculate Costs: Overhead
  • Negotiated rate vs. itemized expenses
  • How much comes back to the digital repository
  • Recovered overheads vs. sunk costs vs. hidden costs
arxiv annual costs for maintenance preservation
ArXiv Annual Costs for Maintenance/Preservation
  • Equipment: $6,833
  • Staff (2 FTE): $91,700
  • Mgt overhead: $9,170 (10%)
  • Ancillary staff costs: $4,200
  • Contingency: $11,190
  • Overhead (57%): $70,163
  • Total: $193,256/year
total costs
Total Costs
  • 281,000 submissions
  • 40,000 in FY 2003/4
  • $193,256 /40,000 =

$ $4.83/submission

  • $193,256 /281,000 = $.69/item/year
maintaining preserving arxiv
Maintaining/Preserving ArXiv
  • Staff costs represent the greatest expense
  • Present day costs do not equal future costs
  • Total costs will decrease only with automation of human effort
  • Per submission and per item costs will continue to decrease as the collection grows
step 4 secure resources
Step 4. Secure Resources
  • Additional funding
  • Reducing expenses
  • Recovering costs
additional funding
Additional Funding
  • One-time funding
  • Endowments
  • On-going institutional support
  • Public or government support
  • Assume responsibility by broad coalition of stakeholders
reducing expenses
Reducing Expenses
  • Streamlining operations
  • Automating processes
  • Eliminating redundancy of effort and content
  • Spreading cost over consortium
recovering costs
Recovering Costs
  • Partnership with content providers
  • Partnership fees (harness the free riders)
  • User fees
  • Third party use/mining of materials
funding the effort lessons learned
Funding the Effort: Lessons Learned
  • Digital preservation as a common good is not economically viable
  • Sustainable programs may not be possible at the institutional level
  • On-going dedicated funds essential
  • Content creators, users, and cultural repositories are not prepared to fund the full enterprise
dp programs will be more sustainable if
DP Programs Will Be More Sustainable If…
  • Digital materials are viewed as both institutional assets and public goods
  • Institutions reach an advanced stage of digital preservation commitment
  • The focus is on cost benefit rather than merely cost
  • Preservation costs are directly tied to access
dp programs will be more sustainable if30
DP Programs Will Be More Sustainable If…
  • Digital resources can substitute for traditional services, publishing efforts, and collections and/or…
  • Stakeholders embrace digital content and are willing to pay for some added value, convenience, or service
  • Institutions share rewards and responsibilities
slide31

“Stewardship is easy and inexpensive to claim; it is expensive and difficult to honor, and perhaps it will prove to be all too easy to later abdicate.”

Cliff Lynch, 2003

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