Shall we circulate automatically?:A cost benefit analysis of Newcastle Polytechnic Library's automated circulation control system Available to Purchase

This paper examines the recent acquisition by Newcastle Polytechnic Library of a computer aided circulation control system. Using the Cost Benefit Analysis methodology (CBA), the costs and benefits of the new system are compared with the previous manual system, particular attention being given to the valuation of students' time. While the CBA approach has many critics, it is basically just an application of traditional economics, i.e. a study of the allocation of resources modified to take account of non‐marketed costs and benefits. As such, it can be a useful guide to policymakers through the identification and evaluation of ‘external’ costs and benefits of alternative projects. External effects which the organisation's accounting methods might otherwise ignore. The study, though subject to errors of omission and misinterpretation (which are inevitable given the complexity of the project and the limited resources available to the analyst), showed that the resource costs of the new installation exceeded the benefits by £33,000 — discounted over a projected life of five years. The major factors influencing this conclusion were: the high cost of ‘in house’ computer programming, and the relatively small saving of user time. A more sophisticated computer with the capacity to hold ‘online’ information on the current state of the book stock could have had a significant impact on the time taken to borrow an item. This would have increased the benefits to users (and possibly encouraged a rise in demand) which may have been sufficient to offset the additional capital costs.