Whether working within government or for-profit organisations, information service departments will be expected to show how they add value to the organisation.
Value in this sense is perceived value by the customer, and this can differ from the ‘real' added value as the producer added it. For instance, the costs of setting up a personalised information alert are quite low. But for a busy professional, this fine-tuned and highly personalised information delivery may be very valuable in terms of time savings, frustrations saved and opportunities created.
In a formula, you can express the perceived value as:
Quality x Service Value = ---------------------- Costs x Time
In this formula, one aims to bring quality and service to the highest level, while keeping costs and time investment on the lowest possible level. Quality and service in this formula are as perceived by the customer - as illustrated by the following quote from Peter Drucker:
‘Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe... Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.'
Facets of perceived value
To determine the perceived value of your service, you can use a customer satisfaction survey, asking what element of the service or product provides the value for the customer. In this context, it is more than just providing the service; it also entails exceeding the customer's expectations and being proactive.
From an information service point of view, the real value is making sure the right information is available to the right person at the right time. If possible, this should be achieved with little time and effort for the customer to get maximum value. Part of the perceived service is also the trust of the customer in the provider, as the information delivered has to be trustworthy if decisions are to be based on it.
Last, but not least, are the cost and time components the customer has to invest to acquire and use the service. This covers not just the financial costs but also the effort involved; think about filling out a complex form, for example.
By working closely with customers, you can gain valuable insights into what they perceive as the value of information products and services and the investment it is worth making in them. In particular, when a customer does not pick up a product or service, it is helpful to see how the balance between value and investment is perceived.
To finish, here are some examples how the value that information services add can be measured and shown:
Transparency
The number one rule is to be transparent on cost, spending and value. Make sure you can show in detail how your budget is spent, why it is spent that way and, if possible, how you save money or generate money. For instance, when offering access to eJournals, what is the business case for an online subscription - has that been checked against alternatives?
Image and branding
An important factor in showing the value-add of information services is making sure you are recognised as a professional and an important contributor to the organisation's goals. Ask your stakeholders how they perceive your department and staff - do you need to work on customer skills? What about your communication materials - is your website professionally designed? Is your brochure up to date?
Branding is a combination of different elements: name, logo, slogan and consistent style. Think about the branding of Porsche; it associate itself with positive concepts like luxury, status and technical perfection. It boosts that brand by having a unique style of advertising where it uses celebrities and design. With which concepts is your department associated? What type of images and slogans do you use? Can you leverage recognition by using internally known managers or recognised staff who help in advertising?
Balanced scorecard
Another approach for measuring value is the balanced scorecard. Robert Kaplan and David Norton proposed this methodology in an article ‘The Balanced Scorecard: Measures That Drive Performance' published in the Harvard Business Review of January-February 1992. It describes a method of linking an organisation's strategic and financial goals and combines different components of a business into one report: the balanced scorecard.
Management uses the balanced scorecard like pilots rely on the dials and indicators in the cockpit of an aeroplane. They need detailed information on a number of aspects of the flight, but relying on a single instrument could give a wrong impression of the status. Based on this example, the performance of one part of the business will inevitably have an impact on other areas.
So, the balanced scorecard uses four perspectives to look at a business:
The customer perspective: this is how your customers see your department, measuring service quality, performance and cost
The internal perspective: this represents the goals that relate to core competencies, skills, quality, and cost measures
The innovation and learning perspective: this relates to your department's new services, service and product improvements, and skills. For example, the qualifications (like ISO 9002) your department has achieved and the courses taken by your staff to enhance or broaden their skill set
The financial perspective: financial performance measures of your department can include cash flow, market share, return on capital investments and volume of growth as compared with the industry norm.
The balanced scorecard looks at broad spectrum of elements to measure the value but, like measuring return in investment (ROI - see below), this is not something done easily. A very useful taxonomy of information service value elements was developed by Tefko Saracevic and Paul Kantor in an article in the Journal of the American Society for Information Science in 1997. A selection from this taxonomy could be used by information departments to build a balanced scorecard for their purpose.
Narratives and anecdotal evidence
Besides hard numbers and a more qualitative perspective based on user satisfaction, another powerful addition to your value statement is collecting narratives and anecdotal evidence. In combination with quantitative and qualitative measures, you can use narratives from key customers to complete your value statement.
You can use a quote from one or more key users on your department's value to them, or even include a short interview. Such a story can appeal to management, as it shows that customers have not only perceived your value, but also want to testify to it.
Return on investment (ROI)
Finally, ROI is seen by management as an important, objective and accurate measure of value. The acronym refers to the percentage of profit or revenue generated from a specific activity. The ROI data proves whether your department's services and products have produced cost savings and if they have resulted in revenue.
As a service department, however, is it not easy to calculate the ROI, since much of your value is not directly visible in cost savings or revenues. If you are looking for cost savings, think about centralising purchasing (including opportunities for securing discounts), merging smaller contracts into corporate-wide contracts, cancelling little-used subscriptions and cutting your hard copy collection to save on office space.
ROI is calculated by calculating the ratio of savings and revenue to the cost of your department, which you multiply by 100 to express as a percentage. The ROI is always calculated over a predefined period, often a year. If the percentage is above 100%, you have delivered a positive ROI.
Clearly, calculating ROI is a complicated exercise. So you could decide not to calculate the ROI for the whole department but for specific services or projects.
Data to help find out if and how your department's activities have resulted in revenue benefits can only be gathered from users. Below are a few examples:
Have they saved time by using your services? This can be translated into a dollar value by multiplying the time saved by the average hourly wage or fee
Do customers have examples where your department helped them to generate revenue? If you work with sales staff, your information may have been crucial in creating the perfect sales presentation. In another area, you may have prevented problems with a new supplier by providing management with an overview of that supplier's financial details and news profile
Did you save the organisation money in legal costs? These days, providing the right information in relation to a legal case can save organisation huge amounts of money and time.
Dennie Heye is global knowledge manager for the Human Resources IT
division at a Fortune 500 energy company. He is responsible for the
definition and implementation a strategy covering the technical,
content and organisational aspects of knowledge management. The
material for this article is based on research for his book:
Characteristics of the Successful Twenty-First Century Information
Professional (Chandos, 2006). More articles and information can be
found on his website (http://www.dennie.heye.nl). Dennie Heye also writes the weblog ‘Obnoxious Librarian from Hades' (http://olfh.blogspot.com), which offers a satirical view on life as a librarian in a large bureaucracy.
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