Page 117 - DLIS406_ACADEMIC_LIBRARY_SYSTEM

Academic Library System

Notes The cost- benefits analysis is one of the effective tools in the hand of management for the
proper functioning, growth and development of any organization. There are basically two
types of organization i.e., some are for the earning of revenues and others are for the welfare
of the society. Education falls in the second category. The cost-benefit analysis of such institution
can be measured in terms of the services they render to the users. In India, the cost of providing
various library services to it users and managing their resources is a very important aspects,
but a very few libraries have the detail picture of their cost-benefits analysis Webster (1981)
cited a number of sources of cost increase, due to which economic and financial pressures on
most libraries have grown enormously in the last few years. He also identifies some methods
of cost-benefit analysis in a library.

Task What do you mean by costing and cost analysis and importance?

Notes The cost benefit analysis can now be calculated by determining the total usage of
resources by all the users during a specific period of time and then evaluating it
by some standard methods of cost benefit analysis.

11.3.1 Meaning of cost

In general “cost” means “the amount of expenditure (actual or notional) incurred on or attributable
to a given thing”. However, the term cost interpretation depends upon:
(A) The nature of the business.
(B) The context in which it is used.
The broad elements of cost are as follow:
• Material

• Labour
• Expenses
• Overhead.

Basically, cost may be classified as fixed variable and semi-variable. Costs, which may further
be divided into product and period cost, direct and indirect cost, decision making costs and
accounting costs, relevant and irrelevant costs, controllable and uncontrollable costs etc, which
helps in assignment of cost to the different activities of both servers and users. Cost accounting
enables the libraries to improve these two basic unit costs. The cost accounting is mainly
concerned with the determination of cost, with the help of process cost accounting and job cost
accounting. Robert (1985) received fine different types of cost study for library and information
service, out of which cost benefit analysis is one of them. He found that work measurement
techniques are the best tools available for libraries to analyze the cost. Bryson (1996) stated
that cost analysis in libraries can be used to determine the anticipated value for certain activities
or to measure efficiency for comparative purposes. Welshmer (1991) also conducted cost analysis
of library and information system and standard pattern in controlling the cost of information
technology in India. So, the cost analysis helps in determining the benefits of a particular
services or products during a period of time.

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