The Emergent Market for Information Professionals: Educational Opportunities and Implications

DURINGTHE 1980s, information technology proliferated in corporations. While the technology permitted information professionals to add much more value, i t also greatly increased information expense. Rising expense made financial management the fundamental library management competency, while intensifying top management pressure on the library more generally. Unfortunately, librarians continue to lack serious interest in the financial management implications of information technology. The education tends to reinforce this because i t is defined by a series of obsolete dualismstheoretical versus practical, core versus types of libraries, active versus passive learning. Acceptance of theory-plus a rigorous active approach to the core-will help release the education’s potential for both corporate libraries and the businesses they serve. INTRODUCTION Corporate library management is in crisis. Top jobs turn over frequently. Sometimes new library managers are general administrators with financial backgrounds and are not librarians. Relatively few librarians aspire to top jobs. Other warning signs are easy to miss. For example, the profession accepts the small size of most corporate libraries as a function of subject specialization. At the same time, many librarians envy other managers whose functional areas grow as they progress beyond their original position parameters. Richard A. Willner, Lehman Brothers, American Express Tower, World Financial Center, New York, New York 10285 LIBRARY TRENDS, Vol. 42, No. 2, Fall 1993, pp. 232-48 @ 1993 The Board of Trustees, University of Illinois WILLNER/EDUCATION IN BUSINESS AND FINANCIAL SERVICES 233 Corporate library management is in crisis because too many library directors lack substance. How has this happened? This article will begin by answering this question. Todoso, i t develops a historical perspective on the current management environment in corporate libraries. This will receive considerable emphasis because relatively few professionals are aware of the profound nature of the changes that have occurred in late twentieth-century business libraries. Next, the article will discuss library science education and assess its strengths and weaknesses from the perspective of contemporary corporate library management. Since people become managers by doing management jobs, staff development issues will be pervasive. THERISEOF FINANCIAL MANAGEMENT Between 1980 and 1990, corporate libraries changed dramatically. This change is the key to understanding the library management crisis and warrants a comparison of corporate libraries then and now. In 1980, corporate library management focused on human resources and library operations. Library managers hired quality staff and organized their work. Most library staff were reference librarians who found information for clients on demand. Expert reference work was the library’s primary client service and this service was the hallmark of special libraries. Resource development activities were relatively less important because clients lacked time to use collections and adequate collection space was often scarce. Many first rate serviceoriented corporate libraries had no catalog because the associated effort was deemed inappropriate to collection size. Libraries generally lacked advanced technology. However, telephones, wire machines, typewriters, copiers, and microfilm readers had been introduced over the years. But the large mainframe and minicomputer applications typical of the period were absent from all but the largest libraries serving major scientific research organizations with an exceptional level of systems orientation. Online databases were still relatively new. Few in number, they were perceived as supplemental sources to be searched at simple terminals by only the most highly experienced staff. Terminals were frequently located in dedicated rooms and sometimes behind locked doors. Overall, corporate library costs were low. When viewed as a percentage of corporate revenue, they were actually insignificant. This meant that financial management was not an important component of library management. The biggest expense in almost every library was for reference staff. Resource expense was usually quite small. Quite naturally, top librarians came from the reference ranks. And, while they prepared annual budgets, managers knew that if reference service was good and users were happy the budget would be approved. By 1990, financial management had become a basic library management competency. Most employees were still highly proficient 234 LIBRARY TRENDSIFALL 1993 reference librarians who found information on demand for clients. However, it was common for them to disperse hundreds of thousands of dollars annually in the normal course of making professional judgments. Resource management activities were highly automated and the more talented technical services people could independently develop and deliver information products directly to clients. Top corporate libraries had as many microcomputers as people. Overall, corporate library costs had increased substantially. Sometimes they were 1 percent to 2 percent of the sponsoring business units’ revenue. This figure was astonishing given that MIS expense was usually 6 percent to 7 percent of revenue in information intensive industries (Erbschloe, 1992, p. 3). The library budget looked quite different, too. The salary line, to be sure, was bigger. Not only had the head count increased, but base salaries had grown at a rate greater than that of inflation-perhaps for the first time in the history of the profession. On the other hand, resource expense was now two to three times greater than salary expense. Resource managers with good analytical and systems skills now had strong backgrounds for top jobs. And although good reference service and satisfied customers were still the heart of the library, they would not make budget approval a foregone conclusion. The more costly 1990 corporate library and the closely related importance of managing i t financially were caused by the proliferation of information technology in corporations. Sometime after 1982, electronic databases, microcomputers, LANs, and third party applications unleashed unprecedented growth in corporate library expense. The new technology also tended to establish direct links among information use, resource expense, and associated staff time and skill level. This had a dramatic impact on corporate libraries and library management. First, library staff work became measurable in an entirely new way because knowledgeable people could produce better results in less time at less cost than those with poor skills. Second, it became possible to quantify and evaluate source usage on a large scale easily and in a meaningful way. Previously, counting inspections of library resources to develop cost per use data were so burdensome that they were simply never deemed worth the effort. From a management perspective, that which is measurable is, by extension, controllable. Increased library cost, plus improved ability to quantify time and expense, meant that library directors could reasonably be expected to analyze their operations fiscally and report their findings to management periodically; this process would become the substance of library management. Initially, most library directors did not recognize this fundamental development or appreciate its implications WILLNER/EDUCATION IN BUSINESS AND FINANCIAL SERVICES 235 for library management. Granted, managers focused on costs at the project level-cost per online search, for instance. However, few of them extrapolated library fiscal analyses demonstrating business impact from these incidentals. After all, the new technology permitted talented library staff to add much more value to research and, by extension, their companies. Some traditional functions, like literature searching, were so transformed as to be completely unrecognizable in terms of both speed and comprehensiveness. In some cases, there was demonstrable productivity improvement not only in the library but also in user areas as well. The application of Compustat to ratio analysis of companies, for example, permitted a skilled information intermediary to do in a morning what had previously taken teams of business analysts many days. However, this type of productivity improvement-whether observable in the library staff or user ranks-almost never meant head count reduction because talented people used the new technically driven capabilities to expand their job functions by doing things which had never been done before, and management, most often, did not question this. Here, marketing also played an important role. Virtually all of the new technology was promoted-by both vendors and corporate information managers-on the basis that it would make companies more competitive and hence more successful. So long as business was good, management accepted this with relatively little proof and in many cases actively encouraged both the diffusion of information technology and the growth of many kinds of value added information services, including libraries. They also accepted sharply increased costs as the price of obtaining the “competitive edge.” When business staggered in the late 198Os, this rationale was severely challenged. After all, some companies with very advanced technological infrastructures actually closed. Some companies with relatively weak technical platforms built upon older types of strengths-strong, high level client relationship management, for example-flourished. Clearly, there was no necessary link between technology spending and profitability. Top management did not abandon technology. Rather, they demanded that all information managers-including librarians-conceptualize and implement “next steps.” This involved scrutiny of all information-related costs and substantial fiscal analysis. Financial management was now a management expectation of library directors. THEMATURATION INDUSTRY OF THE INFORMATIO The rise of financial management in corporate libraries coincided with the rise and maturation of the new electronic information 236 LIBRARY TRENDWFALL 1993 industry, a phenomenon which ultimately increased the importance of library fiscal management still further. To understand how this occurred, i t is necessary to trace key industry developments which happened with amazing speed over a period of only ten years between 1978 and 1987. The electronic information industry is, of course, large, and different observers size and segment it quite differently. For the purposes of this discussion, the most useful segmentation is represented by Figure 1 (Arnold, personal communication, March 1990). Total = $9.7B Market Value Real Time Financial Data-$4.9B Big Players-Reuters; Dow Jones; Quotron Participation is concentrated. Players own content and distribution capability. Historic Financial and Market Data-$3.5B Big Players-D&B; S&P; Donnelley Participation is less concentrated. Some players do not own content. Text and Reference Products--fl.SB Big Players-MDC; Dialog Participation is very diffuse. Content is owned by thousands of small players. Figure 1. Segmentation of the electronic information industry A striking feature of the figure is the correspondence among the diffuse ownership of content, its specificity, and its intended market. Put another way, the information industry is a source business. Relatively few sources have really large markets with high ability to pay. This electronic information industry structure is fundamentally very old, being derived from that of traditional reference publishing with which it shares profound social assumptions upon which an elaborate legal framework has been built. During the 1970s and early 198Os, the electronic information industry essentially put reference publishing in a solutions business by making reference data manipulable. New companies-value added resellers-grew rapidly, introducing literally thousands of products and defining market niches based upon software functionality, content, coverage, and complex pricing. However, this rapid growth was driven by the relatively few big-ticket products with large deep-pocket markets. This growth obscured the older market characteristics of sources to a