Using cost models
Describe and compare your costs in a structured manner
Rapid growth in the volume and complexity of the digital information assets managed by organisations has led to an increased need for a reliable and comparable way to describe curation-related costs. This where cost models can help you. These cost models offer a structured approach to identifying where spending is taking place and where efficiencies might be realised. By using an established cost and benefit model, organisations can break down their activities and describe the range of costs incurred across the digital curation lifecycle in a standard way. This enables the effective comparison of costs across units of operation, services or budget centres.
Select an existing cost model that meets your needs
Over the last decade, several cost models have been developed through research and development - each with a particular strength or focus. Our summary of available cost models can guide you towards the model that may best suit your organisation's needs. Keep in mind the following recommendations when selecting a cost model.
Cost models should:
- support not only accounting, but more importantly enable budgeting
- handle various amounts and various types of assets and use cases
- have a sound definition and breakdown of costs, and enable modelling of cost variables
- be easy to use, preferably providing meaningful default values/settings to guide users
- address measures of benefit and value of digital curation.
Develop a bespoke cost model
If you have looked into the existing cost models but find that none meet your needs, you may wish to develop a bespoke cost model. This could be for use either within your own organisation, or more widely by a particular community of practice. If you opt for this approach, we strongly recommend making use of standard terms and fields to describe your model. Doing so will help other users to understand the origin of your bespoke model and which aspects it covers. The 4C project produced a Gateway Specification Template that provides standard metadata for each of the core cost concepts and is intended for use by future model developers, model users, and service and solution providers to promote interoperability. To learn more about the Gateway Specification, please read the Cost Concept Model and Gateway Specification report.
Looking for a more detailed comparison of the cost models?
Please read the 4C project's Evaluation of Cost Models. Using 78 assessment criteria, this provides an in-depth analysis of how current cost and benefit models meet stakeholders' needs for calculating and comparing financial information.
Now that you have a handle on using cost models, it's time to consider the role of cost drivers in assessing whether you are spending in the right areas. Alternatively, refresh your understanding of the basic cost concepts that underpin cost models.