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Information creates relative bargaining power in vendor negotiations

Katharine V. Macy (University Library Indiana University – Purdue University Indianapolis, Indianapolis, Indiana, USA)

The Bottom Line

ISSN: 0888-045X

Article publication date: 14 May 2018

Issue publication date: 19 June 2018

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701

Abstract

Purpose

This paper aims to examine how libraries can create relative bargaining power and presents a methodology for analyzing collections and preparing for negotiations.

Design/methodology/approach

A brief literature review of the current state of collection budgets and electronic resource prices is presented prior to proposing a methodology based on business analysis frameworks and techniques.

Findings

Electronic resource subscription prices are increasing at a rate significantly higher than inflation, while collection budgets grow slowly, remain stagnant or decrease. Academic libraries have the ability to counteract this trend by creating relative bargaining power through organizational efforts that take advantage of size and concentration (e.g. consortia), vertical integration through practices such as library publishing and open access and through individual efforts using information. This paper proposes metrics and methodologies that librarians can use to analyze their collections, set negotiation priorities and prepare for individual resource negotiations to create relative bargaining power.

Practical implications

The proposed methodology enables librarians and buyers of information resources to harness the information available about their electronic resource collections to better position themselves when entering negotiations with vendors.

Originality/value

This paper presents metrics, some not commonly used (i.e. average annual price increase/decrease), that aid in understanding price sensitivity. Pareto analysis has been traditionally used to analyze usage, but this paper suggests using it in relation to costs and budgets for setting negotiation priorities.

Keywords

Citation

Macy, K.V. (2018), "Information creates relative bargaining power in vendor negotiations", The Bottom Line, Vol. 31 No. 2, pp. 137-149. https://doi.org/10.1108/BL-12-2017-0033

Publisher

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Emerald Publishing Limited

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