RE: A word on calculating costs

["Mcsean, Tony (ELS)" <T.Mcsean@elsevier.com>]

One of the problems in discussing costs is the great variety of approaches
to what actually constitutes "costs".  This varies between bodies with a
sector, and even more so between for-profit and not-for-profit
organisations.  I've managed budgets in many not-for-profit contexts.
Always I've experienced the phemomenon of there being different kinds of
money.  Most of these distinctions have their origin in one or more of
these axes: fixed/variable, realisable savings/unrealisable savings,
capital/recurrent, traditional/innovatory, fun/boring; and there has also
been an underlying assumption of multiple sources of funding some of it
external to the parentinstitution, particularly for experiment and
innovation.

This is much, much less true in the private sector, where expenditure
tends to be just expenditure (with of course there is the assumption that
it is a Bad Thing), to be switched where needed when needed.  In many ways
it's a much simpler world, but with a more rigorous discipline - that
everything (including wages and pensions) is paid for by sales income.  
It means that when private sector work out costs, everything has to be
included - not just the cost of doing the work and wheeling out and
selling the finished item, but also contingency, life-cycle calculations,
future-proofing and above all a realistic overhead.

And I would like to concur with Dean Anderson's assertion that in today's
STM journal industry cost-control is an absolutely crucial variable.

Tony


Tony McSe�n
Director of Library Relations
Elsevier
+44 7795 960516
+44 1865 843630

-----Original Message-----
[mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of Anthony Watkinson
Sent: 07 January 2005 04:47
To: liblicense-l@lists.yale.edu
Subject: Re: A word on calculating costs

I have kept out of this correspondence so far because I am no longer in a
position to discuss details of costs, though I was involved in past ICSU
workshops. However I read from time to time in this and other postings
sentiments like this one from Adam:

>"We shouldn't be bench-marking the present production method, which is
>seriously inefficient"

I will be very interested to hear his explanation for this statement
especially since as far as I know he has not been involved in journal
publishing since some time in the mid 1980s when I succeeded him as head
of journals at Oxford University Press. In my experience since then
publishers have made significant savings on production costs since then.
Unfortunately other costs such as remuneration and expenses for journal
editors have increased and new costs such as most of the electronic ones
have been added. Every publisher that I know in both for-profit and
not-for-profit sectors work to minimise costs - obviously.

I prefer to believe that when actual publishers produce costs they are
likely to be more correct than those from outside publishing. I would have
serious doubts of schemes produced by a publisher to show how librarians
should save money unless it was backed up by real librarians.

I have seen in another posting a request from a BMC spokesperson for
audited costs. I would love to see BMC audited costs.

Anthony