A Summary of a Report Published by the Council on Library and Information Resources

Business Planning for Cultural Heritage Institutions

by Liz Bishoff and Nancy Allen
January 2004

The following summary has been adapted from the text by CLIR staff.

“How do we get money for this?” Cultural heritage institutions frequently ask this question as they face the challenge of moving from a grant-funded, one-time project to a long-term program that provides a product or service.

Securing the funds needed to maintain a project, the authors of this new CLIR report suggest, requires long-term organizational planning. Business planning is a key element of organizational planning, and it is critical to the sustainability of any initiative, including digital initiatives. While most cultural heritage organizations engage in some form of organizational planning, few engage in business planning. The need to create and manage digital assets has brought the importance of such planning to the fore.

Business Planning for Cultural Heritage Institutions is intended to help these organizations plan sustainable access to digital cultural assets and to do so by means that link their missions to planning modes and models. The authors advocate a business-planning approach that helps organizations take a long-term, strategic view of digital asset management.

PLANNING FRAMEWORK
In planning, there is no single recipe for success; however, most successful efforts will have the same general set of components. The report begins by identifying nine components of organizational planning for governmental and nonprofit organizations. It also discusses nonÐgrant-based revenue sources, such as sponsorships and advertising, partnerships, donors, and foundations.

ISSUES TO CONSIDER IN DEVELOPING A BUSINESS PLAN
Business planning must fit the organization’s internal and external environments, and it must be based in both the present and the future. The authors offer the following suggestions to cultural heritage organizations that wish to develop a business plan:

  • Assess general business trends and their implications for the service being planned. For example, data show that people in the United States have less time available for museum visits or library/archive use than they once did.
  • Decide whether to develop in-house capabilities for needed technologies, such as search engines or image creation and management, or to outsource such work.
  • Consider the rate of information creation and how long the information in question should persist. Few institutions have the funds to create digital access for all the items in their collections, and maintaining digital information is an additional cost. For these reasons, a well-thought-out collection development and management policy is crucial.
  • Understand the value that various audiences place on different projects or services, and use this understanding as a basis for developing a pricing strategy.
  • Use the Web to expand and improve communication about products or services, as well as to distribute them.
  • Build on the credibility that cultural heritage organizations have earned. Capitalize on the traditional role of museums, libraries, and archives as stewards of our national memory as a marketing concept.

SURVEY FINDINGS
To better understand whether and how cultural heritage organizations engage in business planning, the authors conducted a telephone survey of 13 institutions that had experience with undertaking digitization projects or programs. Interviewees included single institutions, collaborative efforts, service providers, and consortial initiatives. The following are among the salient findings of the survey:

  • Although most recipients said they had a plan for sustaining their work, such plans were typically limited to activities associated with a specific grant or project.
  • Only a few respondents reported having a business plan; however, many institutions reported the availability of components such as usability studies and promotion plans, which are typically part of a business plan.
  • Multiyear financial planning is unusual.
  • Few respondents did much work on defining markets or user segments in the traditional market sense. Few had given much thought to defining a competitive advantage.
  • Only a few institutions were selling a product; consequently, pricing considerations were not a regular feature of planning. Institutions have given limited consideration to establishing separate nonprofit entities through which revenue would flow to sustain digital library programs; instead, the programs are remaining within the structure of the parent organization. For example, a museum gift shop typically remains under the auspices of the general museum operation and is not established as a separate entity.
  • Two models are emerging in the organizational structure of academic libraries. The first is the establishment of a digital library unit on campus, providing consultation and services. The second is incorporation of digital asset management activities within the library units serving the library’s digital asset management needs.
  • Most digital imaging programs are based in single institutions—rather than in collaborative arrangements—and libraries and museums are undertaking digitization initiatives in comparable numbers. However, the Institute for Museum and Library Services has been encouraging collaboration between museums and libraries, and the number of partnerships and collaborative digitization projects has increased dramatically in the past three years.
  • Some institutions are beginning to view digital asset management as a core function and are reassigning operating funds to maintain its infrastructure.

BUSINESS-PLANNING TEMPLATE
In the final section of the report, the authors provide a template that introduces the major business-planning elements—from organizational mission to product evaluation. The report also provides examples of how different cultural heritage institutions have addressed these elements. The template is intended to help institutions prepare their own business plans.

 

MORE ABOUT THE REPORT

Business Planning for Cultural Heritage Institutions
by Liz Bishoff and Nancy Allen, January 2004.
56 pages.

The text of the report is available free on CLIR’s Web site at https://www.clir.org/pubs/reports/pub124. Print copies can be ordered at this URL for $20 per copy plus shipping.