The template described here is intended to help cultural heritage institutions prepare a business plan. It is a general guide to the major business-planning elements; each institution may need to modify or expand it to fit its own needs. Each element of the template is explained, and most are illustrated with examples drawn from the telephone survey.
The template elements are as follows:
- mission, vision, values, and goals
- executive summary
- product or service description
- needs assessment or market research
- environment and competition
- markets and services
- organizational structure
- operations, including facilities and equipment, management and staffing, and legal issues
- financial plans
- product evaluation and usability assessment
Mission, Vision, Values, and Goals
A mission statement should express the purpose of the organization and describe what is distinctive about it. The mission statement might also briefly state something about what the organization aims to accomplish, including its marketplace niche or the quality of its products or services. The mission has an impact on many other aspects of the organization’s business plan, as indicated in the following examples of the WRLC and the University of North Carolina at Chapel Hill.
Lizanne Payne of the WRLC, a consortium of academic libraries, said of her proposal to create a consortial digitization infrastructure available to WRLC members, “We saw this idea as a natural extension of the digital library systems which we were already providing. We have a plan for integrating the new service into the existing organization. It is part of our overall goal of encouraging the development of digital collections from our libraries.” With these comments, she is confirming the importance of making sure that the digital service initiative is consonant with the mission of the organization in which it is based.
At the University of North Carolina at Chapel Hill, the library’s mission was considered in making a key decision about sustainability. Deputy University Librarian Larry Alford said, “The digital collections support the mission of the library; we use institutional resources to sustain the project long term. We do not intend to license the resulting data because the project meets our mission. We’re creating the Documenting the South Collection and other digital collections as a core function of the library, that should be funded as other core functions are funded.”
Richard Rinehart of the MOAC echoed this perspective when he said, “The business plan for the collaborative project needs to be mission driven, coming out of the missions of the participating institutions. That’s part of the reason why access to this stuff is free. We figure out what ultimate goal is we are trying to achieve, and then fund it on the basis of that.” This example demonstrates that even in a collaboration involving many institutions, it is possible to agree on how the digital asset program fits in the aggregated missions and how that determines the community’s approach to funding.
In another illustration of successful collaboration based on consideration of mission, Greg Colati, director of Digital Collections and Archives, and university archivist at Tufts University, discussed how the university’s work with Boston-area cultural heritage institutions supports the university’s mission: “Everything we do is based on supporting teaching and research. Part of the university’s mission is to support other cultural institutions in the area. There is no specific mandate to do that, but we can do it if it also supports teaching and research.” The goal of this project was to digitize old city directories, census records, and historic photos using GIS capabilities.
The vision statement expresses what the organization wants to be or become (the ideal or best-possible form and substance to which it aspires) and reflects the organization’s priorities. Value statements describe “core beliefs and norms of the organization, and might address issues about the corporate culture, or beliefs about what is right, fair, just or desirable” (Kotler and Kotler 1998, 79Ð80).
An organization’s mission can be product centered or market centered. A product-centered definition emphasizes that the organization produces what it expects the consumer to acquire. The market-centered mission emphasizes the needs of the consumer, i.e., the benefits, the values, and the satisfaction they seek, irrespective of the particular product. The mission of the Library of Congress, quoted from its Web site, is “to make its resources available and useful to the Congress and the American people and to sustain and preserve a universal collection of knowledge and creativity for future generations.” This mission is largely market centered, focusing on the Congress, the American people, and the good of future generations.
The mission of a university is more product centered (in the corporate sector, an example would be a mission statement focusing on what the company sells.) One example is the University of Denver’s mission: “to promote learning by engaging students, advancing scholarly inquiry, cultivating critical thought, and creating knowledge.” While both examples mention the product and the market, each has a different emphasis.
Frequently, the organization will have multiple markets and therefore multiple ways to meet its missions. For example, a museum will have an educational mission; to deliver on this mission to both the general public and scholars, it will be a community center and serve a scholarly community.
The goals statement defines what needs to be achieved to deliver the desired outcomes. The goals are specific and stated in a measurable form. They should be directly related to the mission statement. At the University of Washington Libraries, a digitization project supported the library’s access goals. Director of University Libraries Betsy Wilson noted, “The American Indians of Pacific Northwest Digital Collection project, begun in 1998 and funded by a Library of Congress Ameritech Grant, fit with the University of Washington’s strategy of Ôanytime, any place’ library . . . getting materials to the user’s desktop. It fit into the direction of enhanced access.”
Tom Hickerson, associate university librarian for information technology and special collections at of Cornell University, discussed how the perspective on digital initiatives had changed since the Digital Access Coalition was formed in 1992. “We increasingly see digital collections as services rather than as purely content, and service support must be holistic, involving staff from various functional areas, such as reference, metadata production, systems, and copyright management. In the first decade, our focus was on content creation; in the next one, we will focus on the delivery of services,” he said.
Executive Summary of the Business Plan
The executive summary of a business plan provides the reader with a justification for undertaking the initiative or an overview of the opportunity. It should describe the need or the problem being addressed in the initiative, the audience or market segment being targeted, and the product or service being developed. The executive summary should leave the reader saying, “So now I understand what this is all about.”
Cornell University is one of the few organizations responding to this survey that provided an example of a business plan. The document had been prepared for its Digital Consulting and Production Service. The introduction or executive summary reads as follows:
The Library Digitization Service will be operated as a component service of Digital Consulting and Production Services, a unit of the Division of Digital Library and Information Technologies (DLIT), directed by Thomas Hickerson (Associate University Librarian for Information Technologies and Special Collections). DCAPS offers a suite of digital asset management services supporting digital resource development, from feasibility assessment to full-scale production. Leveraging the Library’s existing experience and expertise, DCAPS is comprised of associated services necessary to insure cost-effective creation, management, use, and preservation for digital collections. Presently the services include digitization, metadata, copyright, and delivery technology consulting and implementation support.
The document explains that the basis for this program is the IBM consulting model. This approach, which adopts a practice from the for-profit sector, is innovative within the library community.
The model underlying DCAPS is conceptually similar to the one implemented by IBM with great success in recent years. Rather than having a customer deal directly with the various product-producing divisions of IBM, as was done for many decades, the customer is provided with a “solution” based on the full range of products and services needed. While many of the products and services recommended are IBM-produced, most importantly, they meet the full range of a customer’s needs in an integrated manner. While this approach has increased the sales of IBM products, more significantly, it has increased the value to customers of IBM’s expertise and advice.
Strategic or Market Opportunity
Part of the executive summary should briefly describe the specific need that will be filled by the product or service being developed. It should explain why this initiative represents a strategic way to meet the customers’ needs and further the organization’s mission.
Service or Product to be Developed
The executive summary should describe the product or service that is being developed in response to the strategic or market opportunity presented.
Product or Service Description
The product should be described in terms of both the core service and product services. Examples of core, or basic, services might be a metadata and image database, an online exhibit of selected digital content, an institutional repository, or a digital imaging laboratory for staff use. Examples of product, or value-added, services would be a high-quality printing and digital copying, software licensing, customized software, 24-hour virtual reference, or on-demand digital imaging services.
Products are viewed in terms of a product mix, defined as the range of products offered. An individual product might be a digital selection of collections within a library or museum; services supporting the use of digital collections, reference services, or museum exhibits; or programs such as museum educational outreach activities. The product mix is important as a grouping, since without one element of the mix, another element might not be available. Within the digital asset environment, most activity continues to focus on the base level, i.e., creation of the collections. Survey respondents are creating image and metadata databases, with value-added services and learning tools just emerging. Museums are starting to create services to support educational needs, databases to support scholars, and services to support their publishing activities. Libraries are working on interactive systems to access scholarly work. Nonetheless, the greatest percentage of work under way at present is designed to launch the fundamental content on which a product mix will be based.
Needs Assessment or Market Research
Kotler (2000, 139) writes that “market research is a systematic design, collection, analysis and reporting of data and findings relevant to [a] specific marketing situation.” There are several types of market research, including needs assessment, community analysis, and marketing audits. One can collect a wide range of information, including data on the demographics, geography, economics, technology, politics, and culture of the community served, as well as on competition among similar products. These are characteristics of external market research. Internal market research should address a profile of strengths and weaknesses of organizational planning objectives, strategy and resources (human, fiscal, and physical), organizational climate, patterns of communication, and marketing plans.
It is important that an organization define the business it is undertaking, be it the overall business or a new product or service. Business definition can be done through a variety of market research techniques, including needs assessments. “Research, in the form of listening to constituents, donors, and clients, allows the organization to uncover what is perceived to be special about its constituents, both in how they think and the benefits they want in relation to the nonprofit organization. . . . The product mix of an organization is the sum total of all of the organization’s service outputs on behalf of particular constituencies” (McLeish 1995, 9). Organizations use research to decide which products, or packages of products, should be maintained, increased, or phased out.
There are four steps to doing market research:
- Determine the data elements to be covered. This step includes identifying depth of coverage, including the amount and type of resources available to do the research. The type of data to be collected will depend on the specifics of the project. For example, a digitization project might begin with a series of focus groups with the target market. The focus group process provides an opportunity to test the basic product concept. This testing should be done before any work is undertaken, as it can help define the scope of the project, including narrowing, broadening, or completely changing the items to be digitized. Testing can also be used to determine specific things, such as whether the users have sufficient bandwidth capability to receive digital video. Following focus groups, phone or written surveys can be undertaken to involve a larger number of individuals from the target market. The survey could contain questions about specific product features, willingness to pay for the product, and price-level sensitivity. This is the opportunity to ask members of the audience whether they would purchase the product at a specific price. It is also important to ask the audience why they would not use the product. Other market research could include usability tests. This type of testing can be undertaken at various stages of the product’s development. It provides for testing the various features of the product and the interface design. Usability testing is generally not done to determine audience acceptance of the overall product, because the number of individuals testing the product is too small.
- Develop the procedures for collecting the data and monitoring the process. The focus group and survey questions must be carefully developed. Pretesting questions on several organizations or individuals that represent the target market is an important step. Questions should address issues from the audience’s perspective, and project designers should be open to the possibility that results may not reflect answers that experts or staff may want or expect. Questions should be revised on the basis of the results of the pretest. To avoid bias and to get the best results, an individual with expertise in market research techniques, rather than staff of the institution, should develop the survey or conduct the focus group.
- Collect and analyze the data. Market research is of two types: primary and secondary. Primary research includes customer studies, such as interviews regarding their current needs, demographics, and why they use or do not use a particular library or museum service. Market research can also be used to assess customer interest in a new product or service. Secondary research provides information that others have gathered about a diverse range of customers that is then customized to the specific research needs of the organization. It is standard practice to conduct secondary research first. Competitor research may have to be purchased or obtained through subscription online services.
- Prepare reports and present the results. A market research consultant or the staff undertaking the market research should present a summary of the data and some conclusions. It is important to look not only for desired results but also for unanticipated feedback. Are the market responses different than anticipated? Do customers want the product delivered in a different way? Do they want an interpretive exhibit approach rather than a database approach? Is the price of the product or service too high? Is there evidence that the customer wants a different product entirely? For example, do they want high-quality prints when you were not planning to offer prints at all? Or do they want TIFF images delivered via e-mail?
Environmental scans, Delphi techniques, and scenario planning are market research techniques developed in the last decade. The Delphi method, developed by the RAND Corporation, is a structured method of group communication to deal with complex problems. The process includes three features: anonymity, iteration and controlled feedback, and statistical group response (Weingand 1998, 66Ð67). Scenario planning was first used in the 1960s by the military and is now used widely to avoid planning based on a single set of assumptions. The scenario method of planning allows an organization to explore questions starting with “What if . . .” (Weingand 1998, 85Ð95) and can allow participants to explore best and worst cases, as well as a range of options or solutions for current or future situations.
Market research allows an organization to
- assess new and emerging opportunities
- furnish information for short- and long-term marketing plans
- obtain information to solve problems
- know which decisions have been correct and which ones are in need of change
- develop promotional and public relation appeals
- assess where the organization stands as it relates to competitors
Oya Rieger, coordinator of the management team of Cornell University’s Digital Consulting and Production Services (DCAPS), reported that while DCAPS did not undertake any systematic market research for its campus library digitization services, its involvement in the Unified Services Working Group greatly expanded its understanding of faculty needs. Cochaired by the Cornell Library and Cornell Information Technologies, the campuswide group has representation from the Office of Information Technology (OIT), Center for Learning and Teaching, School for Continuing Education, Communication and Marketing Services, and eCornell. The working group is exploring how to rationalize service access for faculty interested in using various information technologies to enhance learning and teaching. The goal is to provide faculty with systematic assistance in identifying resources and services in support of their projects. As a part of the Mellon-funded Models for Academic Support (MAS) 2010 project, the library has recently completed a survey to determine needs of New York libraries, museums, archives, and historical societies in order to assess the feasibility of developing a fee-based service. The MAS 2010 team is getting ready to administer a campuswide survey to assess the digital asset creation and management needs of the Cornell community. Information about the MAS 2010 project can be found at http://www.library.cornell.edu/MAS/.
Specific ways to learn more include
- mail surveys, which are relatively inexpensive but have a low return rate and are the least reliable option
- phone interviews, which provide immediate information but limit the amount of information gained from the recipient, since the interviewee will be reluctant to spend too much time on the phone
- personal interviews, which can provide extensive information but are the most expensive option
Market research can also fit into a fund-raising operation. “In March 1999, The National Gallery of London, which has a much-admired development office, advertised a position as head of marketing. The National Gallery isn’t short of visitors, but will need good data about its visitors, whether individual or corporate. Without data feeding into the fund-raising department, it is hard to prove the Ôreach’ and hence the value of a partnership with the Gallery” (Runyard and French 1999, 267).
One challenge for a marketing effort is to take measure of the overall environment in which cultural heritage organizations exist. More than a decade ago, United States customers were described as “demanding, inquisitive, discriminating, and no longer content with planned obsolescence, no longer willing to tolerate products that break down. They are insisting on high quality goods that save time, energy, and calories; preserve the environment” (Rice, 1990). Will the donors, volunteers, and clients of cultural heritage organizations exhibit some of these same characteristics?
These changes in audiences mean that a cultural heritage institution must discard preconceived notions of audience and constantly monitor its constituents in order to match services and programs with evolving needs and desires. The library or museum must know more about its constituents as they change. Market research provides those opportunities. For the American Indians of Pacific Northwest Digital Collections project, led by the University of Washington, Betsy Wilson noted, “We did informal market research, we asked [questions of] our advisory team made up of historians, tribal leaders, librarians and students. They helped with the grant proposal. . . . We thought we knew how to do it.”
Environment and Competition
Cultural heritage organizations must understand the environment in which they are operating. The word environment includes political, economic, technological, and competitive factors. The organization must understand how its constituency views it. Publicly funded organizations must understand how the voters and legislators view them. Organizations with donors must understand how their donors view them. One must evaluate one’s own programs and where they fit within the competitive marketplace, deciding which to keep and which to eliminate, even if the products or services are offered free of charge. Thinking about competition is an important part of business planning, and the organization might do well to think in terms of dollars. “Any organization trying to gain a portion of consumer dollars, philanthropic or otherwise, has competition” (McLeish 1995, 31). As part of strategic planning, the organization needs to ask a series of questions related to the competition, even if there is no profit-based motive. As Richard Rinehart of the MOAC confesses about the environment surrounding museum collaboration, “There is an inherent competition for glory and resources among institutions that must attract visitors’ leisure time and ticket income, as well as scarce public funding.”
Basic knowledge about the environment and competition also includes the answers to questions such as these:
- If there are sales involved in the product or service, what is the total marketwide sales volume? In dollars? In units?
- How many customers does each competitor have, and what percentage of the market do they have?
- What are the sales-volume trends?
- Who are the major competitors? Do they charge fees? Who will the future competitors be?
- What are the competitors’ strengths? Weaknesses?
- What are the competitors’ strategies to succeed? What are yours?
- What technological trends affect cultural heritage institutions?
- What are the competitors’ main modes of promotion?
- When customer behavior changes, how will institution change?
- What are demographic trends affecting the museum and library environments (e.g., an aging population, changing view of libraries by the Internet generation)?
- What are key financial measures in the museum or library market (e.g., local, state, and federal government funding; changing levels and patterns of fund raising and donations)?
Answers to these questions will create a picture of the competitive environment and provide information that can be used to develop an action plan. The Nebraska Historical Society reported visiting a major national commercial digital imaging service as part of its research for creating its own service. The research allowed the society to learn about such things as the technology used, the pricing strategy, and the quality control program of the vendor. It determined that it could not only build a service for its own institution but also offer the service to area libraries and museums. Market research would assist in assessing appropriateness of price levels, product features and functionality, customer support, and other aspects of its service.
Markets and Services
On the basis of market research or needs assessment, a cultural heritage organization can define the service provided and the market in which it will operate, define the scope of its competitive environment, and expand or limit its offerings or the number of constituencies it will serve.
Market segmentation is the process of dividing customers into groups with unique characteristics and needs. On the basis of these data, specific marketing strategies can be developed. Levels of market segmentation include undifferentiated or mass marketing, segment marketing, niche marketing, local marketing, and individualized marketing (Kotler 2000, 256Ð259).
- Mass marketing, or undifferentiated marketing, treats the entire marketplace the same. Many cultural heritage institutions take this approach to marketing. The academic library may initially think it offers the same services to all markets; however, further investigation may reveal that it does segment. For example, the library offers a different level of services to faculty and graduate students than it does to high school students.
- Segment marketing distinguishes among populations, often by offering an array of products designed to meet differing needs. Alternatively, tailor-made messages may be sent for marketing the same services to different segments. The prime tool for this approach is a rich database of marketing information that can be accessed for a variety of services.
- Niche marketing, or concentrated strategy, focuses on servicing only a few markets. An example might be a children’s museum, which would focus its services on children, parents, and educators. The result would be to attract a strong following, investing in that clientele and developing a product offering that is appealing to them. There is a highly defined audience, and the institution has highly defined goals for reaching that audience.
- Geographic, or local, marketing may aim at specific neighborhoods. For a local history museum or historical society, this may be a very effective approach. Walk-in services might also be promoted with this type of marketing, for instance, through promotional flyers directed to specific zip codes.
- Individual marketing can include “mass customization” through interactive, Web-based technologies, but it can also open an organization to individual feedback and two-way communication about products and services.
“Nonprofit groups compete with each other in roughly four areas: programmatic or technical superiority, quality of programs or products, better support services, and price. All four bear further examination” (McLeish 1995, 79). Marketing strategy will need to be designed to best place the organization in its competitive market, and market research will identify the specific needs of these markets.
Repositioning or repurposing an existing product can expand its life by introducing it to a new market segment. Identifying the specific market segment will also allow the organization to determine the size of the market and determine the technological requirements, such as bandwidth and computer capacity. For instance, if a collection is to be useful to the home-school audience, limited access to broadband for home users has to be considered in determining the best way to present large-image files. Richard Rinehart noted that when developing new content there is usually a new market involved, but that the MOAC project did not emphasize development of new markets early on. “The California Digital Library was created in response to user demand, users being students and faculty of the University of California, so MOAC already has the target audience; we just brought a different supply side to meet the demand. Within the MOAC project, there were some new audiences, art and anthropology faculty, but there was no systematic means of identify new audiences/markets early on.”
Most business textbooks have extensive sections on pricing, including many examples that may be useful for nonprofit organizations. To determine whether to develop a product or service, one must determine the cost of creating it. A decision is also needed on whether the product should be made available at no cost to the constituency or whether a fee should be charged. In the for-profit environment, the cost of development is known and the price is determined as a matter of course. Cultural heritage organizations frequently offer the product or service at no cost as part of their public purpose; as a result, they do not use financial management systems to determine the total cost of developing and providing the product.
Ideally, business planning should include information on the full cost of providing products and services, even if the organization decides not to recover that cost. The types of cost data collected should include both direct and indirect costs, as illustrated in the following chart.
Some projects develop cost models by dividing total costs by the number of digital images or objects generated for the product or service. While this may be a relatively easy method of cost assessment, it is not fully accurate. Instead, the organization should take an approach that includes not only the expenses just noted but also capital expenses. Hardware and software must be depreciated over a period of time that generally extends beyond the timeframe for a single project. When amortized, project costs will vary. Other questions to ask include the following:
- Is the initial investment intended to be used for other projects?
- Was product research included in the overall cost?
- Have staff costs been appropriately allocated to the project?
- Are staffing costs higher than anticipated because of the learning curve or delays in the product development? (This will drive up project and product cost and could have an impact on the cost per item if the simple calculation method noted above is used.)
Cultural heritage organizations with a great deal of experience in creating digital projects and services are keenly aware of how quickly the overall formula for establishing cost can change. John Wilkin of the University of Michigan observed, “We’re always looking at our costs. We develop and refine the cost models on a monthly basis, looking at the unit costs and the trends.”
Another formula for pricing is brief but thorough: Price= Image +Service+Product+Overhead+Profit+Risk (Bangs 2002, 73). Costs are associated with all elements of this intriguing formula. It addresses program costs such as marketing and advertising (image), costs related to creation and delivery of the services provided, and costs related to the indirect or overhead of operating the organization providing the service. It includes a profit margin. Finally, the costs of taking the risk to offer the service and of the potential lost opportunity are included in this formula.
When determining pricing, one must consider marketplace conditions, not solely the cost of producing the product. These conditions include the competitive environment, what the competition is charging, what the customer will pay, and an approach to cost recovery over time. Perceived value may play a role in setting pricing, and if the perceived value is very high, the actual cost of creating the product may not be highly related to pricing strategy. Some organizations may establish a low price and sell a high quantity of a product. This approach is generally successful only when the product has become a commodity and there are few remaining competitors. Cultural heritage institutions, with their unique physical collections and environment, will not evolve to a point where products become commodities and there are few competitors remaining in the field. It is, however, possible that digitization services, such as high-quality print, could be a commodity offered by only a few competitors.
The marketing literature generally discusses distribution in terms of physical place. However, most digital asset management products or services provided by cultural heritage organizations are distributed through their institutional Web sites, and the traditional image of the library or the museum as a building alone has become outdated. “The library that seeks to foster an image of being essential to the community and on the cutting edge of information provision cannot afford to be tied exclusively to yesterday’s paradigm of service” -(Weingand 1998, 113). In addition to the institution’s Web site, several other distribution strategies may be considered, including partnerships with for-profit organizations, collaborative initiatives such as the AMICO or the CDP, and partnerships in which one partner is responsible for distribution.
The University of Virginia has an interesting partnership with ProQuest Information and Learning Limited (formerly Chadwyck-Healey) under which ProQuest Information distributes the licensed version of the university’s Early American Fiction collections. ProQuest Information is responsible for sales, publicity, development of promotional materials, determination of the marketplace, and distribution of the licensed product. The University of Virginia distributes the product free of charge to its faculty and students and to those of other academic institutions in the state through the Virtual Library of Virginia (VIVA). Nontraditional partnerships such as this one are emerging in the digital environment but are still rare.
Distribution channels are responsible for getting the product to the marketplace. Questions to consider include: Where is the best place to sell the product? Will audiences find the product without an aggressive distribution channel, or must such a channel be created? What barriers to distribution might exist, including technological barriers, such as bandwidth capacity, and barriers to penetration into rural communities and developing nations?
Most organizations are taking a relatively passive approach to product sales—offering online ordering of prints or digital copies of images from their Web sites. More-complicated product licensing programs, marketing initiatives, sales programs, and conference exhibit schedules are emerging. Sales, while integral to a business plan, is not a topic addressed in this paper. There is ample literature on establishing a sales program, but there are few examples in the cultural heritage community of sales as the primary basis of sustainability. When the topic of sales is present in the business plan, it should be approached with sensitivity to the values and mission of the organization.
“Before an organization can determine which communication or promotional tools to use, it has to have an image or message for a product, service, experience, or organization to promote” (Kotler and Kotler 1998, 219). It must be something the user will respond to, find appealing, want to purchase, or participate in. Today’s marketing experts talk about brand image or brand identity. These are shortcuts to attract attention and build familiarity, trust, or expectation of benefit. “An effective image works like a funnel, directing a flow of attention and regularly bringing consumers to an organization’s . . . corner whenever the consumer has a need for that type of product or service” (Kotler and Kotler 1998, 219). Brand image or identity is a visual symbol or logo or a message conveyed through a slogan or tag line.
There is more to a communication plan than branding. A full communication plan includes a range of promotional strategies and activities targeted to a specific audience and has a specific set of messages based on the benefits to be derived by those users, as defined by the needs assessment and market research or needs assessment. There are four basic tool sets of a promotion plan:
- advertising, which includes print and broadcast ads, mailings, catalogs, newsletters, brochures, posters, billboards, symbols and logos, and other print products
- public relations, including press kits, speeches, seminars, annual reports, sponsorships, publications, lobbying, and media relations
- direct marketing, such as direct mail, telemarketing, integrated direct marketing, and database marketing
- sales promotion, including gifts and premiums, discounts, gift shops, redemption coupons, and tickets
It is commonly thought that the refrain from Field of Dreams, “If you will build it, they will come” holds true for all digital assets, and that making something available through a Web site represents effective and adequate marketing. More can be done with a Web site to enhance a communication plan. An Internet marketing plan can include anything from naming the product with the Internet in mind—for example the Colorado Virtual Library—to using e-mail alerts (selectively, of course) to do digital publications (Bayne 1997).
Many of these communication tools could be more extensively used by libraries and museums, and could be built into a promotional plan for digital asset products and services. This is something many libraries and museums simply neglect. Even the MOAC project did not put significant resources into marketing, “We had a good plan for developing the content, but we haven’t successfully reached out to let the professional community know that it’s available to them. We had a built-in audience; marketing to them was overlooked in the early stages,” commented Rinehart of MOAC.
A specific response is desired by the promotional product and should be spelled out in the communication plan. A timeframe for each activity should also be noted in the plan. The communication plan has an impact on the budget, and each component of the plan is likely to have associated expenses, such as advertising costs.
Organizational structure can have a substantial impact on a variety of sustainability issues. The way in which digital activity fits into the organization, and communicates with it, directly affects the likelihood of ongoing success. The efficiency of the organizational map for the digital service or program can also affect staffing, equipment, marketing, and other business elements. When there is a separate unit, it is essential to define the role of the unit and its collaborators within the organization as a whole. The model adopted at the University of Michigan is just one example of how central funding for a part of the unit’s operation can be augmented through projects or partnerships. The unit’s business plan is based on several sources of funding, each of which is appropriate for the organizational plan. At the University of Washington, the position of the digital initiative unit in the library has changed, reflecting changing needs. The unit began as a SWAT team of five people who guided projects across different parts of the library, worked on technical and metadata standards, managed fiscal aspects of projects, watched for emerging technology, and trained staff. However, there was a strong desire to ensure that this group be recognized and integrated across the library system. “We learned that we needed a centralized unit to steer the digitizing work within the library,” said Betsy Wilson. This model fit the needs of a single institution in a partnership relationship with other organizations.
In contrast, the MOAC took a highly decentralized approach to organization. The CDL Online Archive of California (OAC) provided the technical infrastructure for the Encoded Archival Description (EAD) Finding Aids project that the 11 participating museums used for their project. The goal of the initial grant was to see whether museums throughout California could create an integrated, online collection of finding aids for the museum collections, sharing the OAC infrastructure and adapting the EAD finding aid environment to museums. An IMLS grant was awarded to the CDL, and minigrants were awarded to the museums. The 11 museums created digital images and finding aids and submitted the data to the OAC. Rinehart, project manager for MOAC, notes, “One of the biggest findings is that we spent a lot of time figuring out how museums could contribute content to one central portal [OAC. Later we began] to enable museums to become more capable at creating digital stuff and sharing it. [We needed to] show [that] each museum can share its information in more than one portal, instead of focusing exclusively on the centralized portal [OAC]. We looked back up the chain at each individual institution and asked, ÔWhat can we do to help them?'” The focus on individual museums is further exemplified by Rinehart’s comments on outsourcing: “Each individual museum was responsible for digitizing its own content. Some outsourced and some didn’t. Individual institutions made their own [staffing] decisions; only one museum hired someone just for the project.” On the topic of budgets, Rinehart explained, “It’s up to the museum; each came up with its own budget.” And, finally, regarding sustainability: “Museums that are part of the University of California system will receive some support from the system; the CDL will have to pay for more server storage, tools, etc. Museums are now on their own in terms of budgeting; each museum will decide that. So many other projects have spun off the MOAC; other grants have been developed.”
The organization of the CDP, like that of the MOAC, is decentralized, yet the program provides centralized services such as training and consulting services, along with infrastructure, such as regional digital imaging labs and a centralized metadata database. CDP Executive Director Liz Bishoff notes, “I concur with Rinehart’s comments on the need to put more emphasis on what individual institutions need. We need to put effort on what the individual institution needs, figure out what they need, and decide what standards they can afford to produce.”
Facilities and Equipment
Every program or service needs physical space. This includes space for staff, equipment, and storage of supplies, both for the initial product or service development and for ongoing operations. Because space must be budgeted for, detailed information about space requirements must be provided and decisions made as to whether existing space can be used, whether it must be rented or remodeled, or whether construction must be undertaken. “We had to find room in special collections to house two cameras and the staff for digitizing books that could not be removed from special collections,” noted Karin Wittenborg of the University of Virginia. Special consideration must be given to the resources that are being digitized from museums and libraries. Their fragile nature may preclude shipping them to vendors or even moving them to different parts of the building or campus. If rental space is required, brokerage fees and moving costs must be included.
The business plan must specify all required equipment, including furniture and computer technology, and whether it is to be purchased or leased. Depending on the cost, the equipment may be amortized over a period of years. The organization’s finance and information technology departments should be consulted regarding the recommended amortization periods. Telecommunications, general computing, digital imaging, and digital rights management software should be included in the equipment required, as should user authentication and digital watermarking software, if it will be used.
Digital asset management programs depend heavily on planning for appropriate technology. Issues to be considered in the business plan include technology costs related to standards compliance; interoperability with partners or national activities; migration of operating systems and hardware platforms, data migration, and preservation; and authentication. Larry Alford of the University of North Carolina at Chapel Hill reported, “We . . . migrate data, back up data, and provide sufficient staff to maintain the service. That comes out of the library’s operating funds and is part of a business plan for sustainability that does not include generating revenue.” Other institutions are likely to decide that the costs of such infrastructure should be offset by revenue of some kind.
Management and Staffing
The business plan must address the staffing needed to complete the project, including the degree of needed technical capacity and managerial competence. It should indicate who would be the project director and make certain that this person has the responsibility and authority for completion of the project. The plan should include brief descriptions of other key management positions and personnel requirements. It should indicate what positions are new hires and what individuals will be reassigned from existing positions. Some activities are best outsourced and should be indicated as such.
Staffing is a major expense for cultural heritage institutions. The budget documents should include not only salary but also fringe benefits for permanent and temporary staff associated with both the development and ongoing support of the product or service.
At the WRLC, the need for expert staff drove members to support a central service. Lizanne Payne recalled, “One of our obstacles was the need for staff expertise in each library. It seemed to make more sense to develop that expertise centrally—to have a few centrally located staff with expertise— rather than assuming that each library would develop staff with metadata and scanning expertise. It seemed like a logical place for the consortial organization to start, since some of the libraries had already started digitization but not on a large scale.” The decision to create a shared infrastructure helped the member libraries avoid considerable expense.
Similar arrangements, wherein members contribute different kinds of staff expertise, are evident at the University of Washington and in other projects described on the CDP Web site.7
In the University of Southern California Digital Library Program, Marianne Afifi reported, “we’re finding a need to track what people are doing. We’re having to become more formalized, take a project management approach. Before we start, we’ll do an analysis of whose time is going to be involved and how much. We do a better job of tracking resources—money, time, etc. It helps us to prioritize projects.” Almost every project noted that a full-time project manager was needed. Wittenborg at the University of Virginia commented, “It would have helped to have a project manager assigned to the project full-time from the beginning and to have one department responsible for the whole project from the outset. Hiring a full-time digitization coordinator to be responsible for the imaging schedule and quality control helped to improve the efficiency of the project. We should have incorporated staff turnover into the time we budgeted to complete the digitization project.”
By its nature, a digitization project or service is likely to have copyright and intellectual property issues associated with it that other projects undertaken by cultural heritage institutions do not face. Laura Gasaway, a leading copyright expert, articulates several reasons for creating a university copyright ownership policy, and many of these apply to digitization projects (Gasaway 2002). In general, copyright is designed to encourage research, scholarship, and the creation of new knowledge. The policy should
- protect the institution’s interests
- protect the faculty, archivists, curators, and librarians or other -creators
- deal with issues before disputes arise
Specific issues to be addressed in a higher education setting would include the following:
- work-for-hire considerations, a particularly important issue for museum photographers, library and museum Web designers, exhibit designers, and education resource creators
- deeds of gifts that ensure the institution has the rights needed to undertake the digital asset presentation activities
- copyright for educational programs, including the Technology, Education, and Copyright Harmonization (TEACH) Act and best practices related to library reserves; copyright permission procedures; and special issues in the copyright arena, such as those related to music and other performances
- the Native American Graves Repatriation Act, a key issue for most museums
Generally, a copyright policy is developed by a team, including faculty members or curators, librarians or archivists, board members, and legal counsel. Legal counsel experienced with copyright and intellectual property rights and, in particular, with fair-use issues, is preferable. Few, if any, certainties can be found in the area of copyright and fair use, although guidance is available and case law is emerging slowly. If a cultural heritage organization is participating in a collaborative initiative, there are additional legal issues. Further, there are different considerations8 for managing digital versions of published and unpublished resources.
Another expert on rights and fair use is Georgia Harper, who has mounted an extensive set of policy and instructional pages on the University of Texas Web site. Many of these are extremely helpful for all kinds of organizations with a public mission. Although the advice and briefings were prepared for a higher education environment, museums and other cultural heritage organizations would benefit from the information available in Harper’s publication Crash Course in Copyright (Harper 2001).
While the business plan is not intended to articulate every element of a rights management plan, it should address aspects of intellectual property, copyright, and other legal issues that entail risk and cost. If a cultural heritage institution is considering creating a digital resource to sell, it is particularly critical to know about rights. While intellectual property law changes frequently, the basic principles are outlined by Lesley Ellen Harris, a media copyright attorney, in her book Digital Property (1998). More information on rights issues specifically related to digital assets can be found in chapter IV of the NINCH Guide to Good Practice (2002). Two concise guides to the decision-making process related to public domain resources are available from Laura Gasaway’s Web site (Gasaway 2003) and from the Michigan Library Consortium (2003).
Many museums and libraries are incorporating their digital initiatives into their operating budgets. Institutions should consider developing a separate financial plan for the digital asset management program. The financial plan provides decision makers with a better understanding of the true costs of digitization. It also provides the type of financial information needed to support a grant application. Should the organization decide to develop fee-based services, some of the information required for pricing those services will be available in this plan.
The financial component of the business plan covers a three- to five-year period and has revenue and expense components. The revenue component includes all revenue streams. For example, a library could be offering a consulting and training service that is one revenue stream, software service that is another business, licensing of digital assets as another business, and grants and donations as another revenue stream. Projections for years beyond those covered in the plan are usually based on historical trends; however, with new products, estimates have to be based on market research, discussions with customers or potential customers, and contracts. Inflation needs to be built in, as do price increases.
On the expense side, all costs associated with the above-noted components are reflected, along with salaries and fringe benefits, equipment, facilities, legal and accounting activities, production costs (where outsourced), promotion costs (printing of brochures, Web site design and development), sales costs, and exhibit costs. The costs of content creation should also be included.
It is important that a nonprofit organization budget for future development and equipment replacement. Jill Koelling of the Nebraska Historical Society reported that their budget office has done a thorough job of budget planning. The budget shows revenue and expense with excess revenue over expense allowing for equipment replacement.
Product Evaluation and Usability Assessment
Evaluation is an important component of a business plan, and it should be done on a regular basis. Use is one important measurement for many digital product and service programs. Karin Wittenborg noted, “Our measures of success for the Early American Fiction product are based mainly on usage data of the materials from the Electronic Text Center site and on the income from ProQuest licensing royalties.”
Evaluation of the program or service’s effectiveness must be done from the perspective of constituents, including funders and users. Many interviewees reported that they rely on usability labs to test their Web sites. The University of Washington Libraries staff reported that they have “a nice usability lab and run everything through it, testing the interface.” Product usability is a critical component of product development and should be used during various stages of product development, including product design, prototyping, and testing.
Customer-satisfaction surveys are effective tools to evaluate current or new users of a product or service, board members, and staff. Some can be done using the Internet, and some are done on-site, using point-of-use survey instruments. The Denver Museum of Nature and Science’s Kris Haglund reported that the museum conducts a set of evaluations of the final product with focus groups representing various market segments (teachers, lifelong learners, the general public). Institutions should consider what of their existing infrastructure can be used to evaluate a digital initiative, rather than reinvent the wheel.
8 See the wide range of papers and resources available through the NINCH Copyright Town Meeting series and the resources associated with the Digital Copyright Workshops. Available at: http://www.ninch.org/.