COST SAVINGS AND VALUE ADDED SURVEY -- 1996/97
EXECUTIVE SUMMARY

The Virginia legislature, working with the State Council of Higher Education in Virginia and the state's academic library community, continued funding for the Virtual Library of Virginia (VIVA) for the 1996-97 fiscal year. By working together, these entities restructured the academic libraries' materials budgets to give VIVA a central budget of $1.8 million for group purchases (collections, software, ILL delivery service, and training materials) for fiscal year 1996-97.

The financial benefits to VIVA institutions can be measured in three ways: I. Reduced Purchasing Costs; II. Cost Savings; and III. Value Added Benefits.

I. Reduced purchasing costs: VIVA calculates financial benefits in terms of reduced purchasing costs for all purchases. During 1996-97, we calculate that VIVA purchased $6.7 million in resources for only $1.8 million. This represents a cost avoidance of approximately $5 million for fiscal year 1996-97.


In the summer of 1997, for the second year in a row, VIVA institutions were asked to analyze the VIVA resources available to them in fiscal year 1996-97 and to record direct cost savings, indirect cost savings, and value added savings realized during that year. A total of 55 responses were received from 58 VIVA institutions and their branch libraries. Respondents included all 14 of the 15 state-assisted doctoral and comprehensive VIVA institutions, 25 of the 34 public two-year institutions, and 16 of the participating 27 independent colleges.

II. Cost savings: The survey documented new direct cost savings of $552,188, for the 1996-97 year, a significant increase over the $330,997 recorded for the 1995-96 year. In addition, calculations for continued cost savings with an estimated 10.5% inflation rate for serials equals $274,425 during 1996-97, for a total of $826,613 for the 1996-97 year.

III. Value added: This survey documented a financial benefit of $11,443,199 for value added resources for the 1996-97 year. This is nearly twice the $6,121,031 of value added benefits documented in 1995-96.


Key results related to significant value added for the full-text databases for VIVA: