Records Managers

Analysis of Costs and Benefits for ERM/ERK Projects


The decision to implement an electronic recordkeeping (ERK) or electronic records management (ERM) software system will typically involve an analysis of the costs and benefits of alternative solutions. In most cases, the current system (whether manual or automated) is one of the alternatives evaluated and the costs and benefits of maintaining the status quo are compared against one or more new ways of satisfying requirements. A cost-benefit analysis can include:

  1. A statement of the policy rationale or business case for undertaking the evaluation of alternative systems/processes.

  2. A list of any assumptions that underlie the analysis of costs and benefits. These may include a standard cost for personnel salaries and benefits, standard rates of annual increase used to calculate future year costs, etc.

  3. An analysis of costs associated with the existing system/process and with each alternative.

  4. An analysis of benefits of the existing system/process and each alternative.

  5. A summary of other qualitative factors used to compare and evaluate the existing system and each alternative.

This Fast Track document does not provide a complete methodology for cost-benefit analysis. Your organization may already have a standard method of conducting cost-benefit analysis, for example as part of your Information Technology systems development lifecycle methodology or as part of your standard procedures for purchases and acquisitions.

This document is intended to supplement a full cost-benefit methodology, by identifying some typical cost categories and by suggesting benefits that might be attributed to an existing records management system, or to the alternative ERM/ERK solutions you evaluate. It should not be regarded as either the minimum, or maximum, information to include in your analysis. Requirements vary from one organization to another and the analysis of costs and benefits should reflect the needs and circumstances of your organization.

Costs

Following are some of the costs that may be involved in your current records management activities or that you may incur in developing and implementing an ERK/ERM system. Your cost-benefit analysis may include some of these and not others, or you may identify additional cost factors relevant to your own circumstances.

Costs are divided in two categories:

  • recurring (ongoing) costs

  • non-recurring (one-time or start-up) costs.

Both recurring and non-recurring costs can be further subdivided into fixed costs and variable costs (those costs that change depending on the number of records and number of users).

It is essential that everyone involved in the analysis have common definitions for each cost category, what it consists of, and how it is calculated. These definitions should be documented as part of the analysis process.

Recurring Costs


1.     Personnel Salaries & Benefits                                                                                          
   a. RM staff: manage and oversee administration and use of the system                                                                                          
   b. IT staff: maintain and operate the system                                                                                          
   c. End users: time spent interacting with the RM system                                                                                          
2.     Hardware maintenance, upgrade & replacement                                                                                          
   a. Servers                                                                                          
   b. Storage devices                                                                                          
   c. Desktop computers & peripherals                                                                                          
   d. IT infrastructure components (e.g., networks)                                                                                          
3.     Software licenses, maintenance & upgrades                                                                                          
   a. Records management software (may include server, administrator and end-user modules)                                                                                          
   b. Required server operating system and database software                                                                                          
   c. Required PC operating system and other desktop software                                                                                          
   d. Document and image management software                                                                                          
   e. Other system software (e.g., security, back-up)                                                                                          
4.     On-going training                                                                                          
5.     Consultant services                                                                                          
6.     Other (e.g., records migration, records storage)                                                                                          

Non-Recurring Costs


1.     Personnel Salaries & Benefits                                                                                          
   a. Software conversion                                                                                          
   b. Data conversion: records, file plans                                                                                          
2.     Hardware purchases: New equipment or infrastructure                                                                                          
   a. Servers                                                                                          
   b. Storage devices                                                                                          
   c. Desktop computers                                                                                          
   d. IT infrastructure components                                                                                          
3.     Software Purchases: New software or infrastructure upgrades                                                                                          
   a. Records management software (may include server, administrator and end-user modules)                                                                                          
   b. Required server operating system and database software                                                                                          
   c. Required PC operating system and other desktop software                                                                                          
   d. Document and image management software                                                                                          
   e. Other system software (e.g., security, back-up)                                                                                          
4.     Software customization                                                                                          
   a. Integration of new systems with existing systems                                                                                          
   b. Changes to user interfaces                                                                                          
5.     Training                                                                                          
   a. End user training: records management basics, system use & operation                                                                                          
   b. System administrator training                                                                                          
   c. Organizational change management                                                                                          
6.     Personnel salaries & benefits                                                                                          
   a. Records management staff: implementation management, file plan (re)design, RM process re-design                                                                                          
   b. IT staff: analysis, design, development                                                                                          
   c. End-user staff                                                                                          
7.     Consultant services                                                                                          
8.     Other (e.g., pilot testing, backfile conversion of records)                                                                                          

Benefits

Following are some benefits that might be attributed to your current records management activities or that you may achieve in implementing an ERK/ERM system. Your cost-benefit analysis may include some of these and not others, or you may identify additional benefits relevant to your own circumstances. Business benefits will often be unique to an agency's processes and may involve reengineering of the existing processes, so the determination of benefits will require close cooperation among the RM, IT and program staff of the agency.

It is essential that everyone involved in the analysis agree on which benefits should be included and have a common definition for each benefit, what it consists of, and how it will be determined or measured. These definitions should be documented as part of the analysis process.

Some items listed may be benefits of one alternative ERK/ERM solution but not others, thus helping to determine their relative merits, while some may be benefits of your current records management system, thus setting expectations that any alternative ERK/ERM solution must at least meet if not improve upon.

costs-and-benefits-erm-erk.html
1.     Reduces costs associated with current recordkeeping activities (e.g., activities that would be discontinued or scaled back).                                                                                          
2.     Makes records accessible to the public from remote locations and at any time.                                                                                          
3.     Makes records accessible to agency staff from remote locations and at any time.                                                                                          
4.     Meets requirements imposed on Federal agencies by law and regulation.                                                                                          
   a. Helps agency manage records it is required to accept from the public in electronic form (e.g., helps agencies meet GPEA requirements).                                                                                          
   b. Reduces times to fulfill FOIA and legal discovery requests.                                                                                          
   c. Reduces FOIA and discovery compliance costs.                                                                                          
5.     Enables access to data in legacy systems.                                                                                          
6.     Provides rapid access to records needed in business dispute resolution.                                                                                          
7.     Reduces the need for parallel recordkeeping systems (e.g., paper and electronic).                                                                                          
8.    Ensures authenticity and reliability of records.                                                                                          
9.     Ensures the integrity of records and the security of recordkeeping processes.                                                                                          
10.     Facilitates migration and preservation of records.                                                                                          
11.     Permits retrieval of records based on keywords or record contents.                                                                                          
12.     Makes it easier to create a variety of reports used to manage the collection of records.                                                                                          
13.     Facilitates audits.                                                                                          
   a. Allows tracking of the use of records.                                                                                          
   b. Facilitates retrieval of records used to conduct audits.                                                                                          
   c. Facilitates audits of organizational recordkeeping.                                                                                          
14.     Facilitates re-classification of records when re-organizations occur, file categories changes, records dispositions are modified, etc.                                                                                          
15.     Enables more complete capture of records by moving the focal point of records management to the individual computer desktop, where many electronic records are created and received.                                                                                          
16.     Reduces the costs of preparing records for publication.                                                                                          
17.     Reduces/controls paper usage.                                                                                          
18.     Decreases physical storage costs.                                                                                          
19.     Makes it easier to reliably identify the authoritative copy/version of a record.                                                                                          
20.     Enables multiple, simultaneous access to records which may permit parallel processing.                                                                                          
21.     Facilitates comparison of records for investigative purposes.                                                                                          
22.     Allows the agency to more easily interact with the public.                                                                                          
23.     Supports agency-specific strategic initiatives (specify).                                                                                          

For More information

You may find it helpful to review the cost-benefit analysis methods and guidelines used by various offices and agencies of the federal government that are cited below.

  • Office of Management and Budget. OMB Circular No. A-94 provides general guidance for conducting cost-benefit analysis for all types of projects.

  • General Accounting Office. The GAO Information Technology Investment Evaluation Guide describes the analysis of benefits, costs and risks in the context of an overall IT investment management process.

  • National Institutes of Health. The Cost Benefit Analysis Guide for NIH IT Projects is a comprehensive guide for performing cost-benefit analysis. The NIH IT Cost-Benefit Analysis web page provides access to examples of cost-benefit analysis.

  • U.S. Patent and Trademark Office. The USPTO Economic Analysis (Technical Guideline IT-212.3-10) provides the framework and requirements for completing a business case and economic analysis of IT investments, including analysis of benefits and costs and evaluation of alternatives.

Version date: 10/11/00

Top of Page

PDF files require the free Adobe Reader.
More information on Adobe Acrobat PDF files is available on our Accessibility page.

Records Managers >

The U.S. National Archives and Records Administration
1-86-NARA-NARA or 1-866-272-6272

.