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"Whenever people organize to accomplish desired ends, justification becomes a central social process,"
Thomas J. Waldhart, "The Process of Cost Justification," Advances in Library Administration and Organization, 10 (1992) 113-127.
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The justification process is important because it provides a way to secure the commitment and cooperation of others. Cost justification is focused on persuading resource allocators that the costs of a requested item are justified by its benefits.Sometimes, people seek to persuade others by making assertions about the proposed benefits. For example, one might say,
"The new system will result in a significant increase in the productivity of the unit's professional staff; it will greatly reduce the response time of the library; and it will greatly enhance the client's access to information."If the person making this statement has high credibility, then this may be an effective strategy requiring little effort on the part of the persuader. If not (as is more frequently the case), a more rational approach may be needed.Sometimes economic-based quantitative methods, such as measures of efficiency, cost-effectiveness and cost-benefit analysis, can be used to show that the cost of something is warranted by its benefits. Waldhart (see above) argues that analytic methods are rarely sufficient and must be combined with a purposeful strategy of persuasion to convince the audience.
Persuasive techniques that are often used include:
Analysis and Reason - persuading through explanation with appeals to logic and rationality
Building Coalitions - obtaining support of superiors, coworkers and subordinates
Appealing to Higher Authority - seeking support from those higher in the organization -- perhaps a mentor
Bargaining - proposing an exchange of something valued for the support of others
Appealing to Friendship - seeking support on the basis of existing friendship
Intimidation - seeking support through threats, coercion, and confrontations
Assertiveness - securing support through repeated assertions and reminders.
Effective persuaders vary the strategies they use based on the situation.
Persuasion seeks to change behavior in three ways:
by changing existing responses
by reinforcing existing responses, or
by shaping new responses.
One might cost justify a budget by arguing for an increase in the budget (changing past responses), or argue that current funding levels should be maintained (reinforcing existing responses), or that the needs of the clients require an increase in the budget sometime in the future (shaping new responses).
A stage approach to cost justification would follow the following familiar steps:
Define the need for cost justification and set some objectives
Analyze the audience of the cost justification
Assess which cost/benefit arguments would be most relevant
Present these arguments to the audience
Evaluate the results.
The definition of the need for cost justification provides a clear understanding of what the problems are. Objectives of the justification effort should also be developed. Confusion or disagreement can lead to lack of focus, difficulty in selecting the appropriate evidence or the most effective strategies.
The audience for cost justification consists of those folks at whom the persuasive effort is directed -- some may be instrumental, others might be decision-makers. Sometimes the audience is one person; other times it is a number of people with different ideas and values. An example of the latter occurs in the justification for purchase of a new system. The professionals and clerical staff who will have to implement the system will have different concerns than the administrators who must provide the funds. They will require different arguments from the clients who may or may not benefit from the system. Effective cost justification in this case may involve a number of different arguments based on quite different bits of evidence. It is important to select arguments that are consistent with the beliefs and values of the audience.
The systematic assessment of costs and benefits and their comparison provides the basis for the persuasive power of cost justification. In considering these costs and benefits, on has to determine
What costs and benefits are relevant
How these costs and benefits are defined, compared, and demonstrated
Who incurs the expected costs
Who realizes the anticipated benefits
Most people think of the cost of something in terms of dollars. Dollars are a useful way of equating different kinds of things, such as manpower, facilities, equipment, supplies, service changes, communication charges, and the like, e.g. the sum of all the resources involved in accomplishing the end. Sometimes cost is the same as price, other times, not.
Costs and benefits may be categorized in the following way:
as dollar expenditures or revenues
as costs or benefits that can be measured in dollars
as costs or benefits that can be quantified but not measured in dollars
as costs or benefits that cannot be quanitified.
Costs and benefits are usually expressed in economic terms. When they cannot be, an effort should be made to quantify them to show magnitude of the effect. If effects can be expressed either economically or quantitatively, they can be expressed verbally to assure that they are not disregarded.
Some techniques for justifying the budget include
Keep an ammunition file with testimonials from users, quotes on time savings, and examples of specific projects undertaken for your clientele. Examples are powerful and hard to dredge up at last minute. Get in habit of asking clients -- "How effective was X?" It will provide evidence and is a good feedback practice.
Keep performance figures. Know what it costs to perform certain functions and produce these facts at appropriate times.
Quantify what you do as much as possible. For example, easy to document an increasing level of circulation or of reference questions answered. Show the information graphically. Histograms or simple graphs can be powerful. Keep them simple and clear.
Distinguish between Fixed and Variable Costs. Many costs in libraries are fixed, for example, personnel. Use this to show that a 10% reduction in budget would have a major negative effect on variable costs like journal subscriptions but in similar manner, a relatively small increase can have a major positive effect.
Compare proposed budget with budget required to continue present level of service when taking inflation into account.
