D.T.S.S College.

Zero Based Budgeting.

A Project Report On
ZERO BASED BUDJETING.

By
Miss. Priya L Desai. Submitted in fulfillment of S.Y.B.Com. (B&I)

D.T.S.S College of Commerce. Malad (East), Mumbai.

[University Of Mumbai]

Academic Year 2008-2009

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INDEX Sr.No 1. 2. 3. 4. 5. 6. 7. 8. 9. Topic Introduction. History. Implementation. Advantages and Disadvantages. Drawbacks and Solution. Behavioral Impact. Concept. Case Studies. References. Page No.

INTRODUCTION
The budgeting process is an essential component of management control systems and has been an effective system by which management can
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successfully plan, coordinate, and control. The process involves the creation and implementation of the broad objectives of an organization, the detailed objectives, and a short-term and long-term financial plan. The philosophy and procedures used to implement zero-base budgeting in industry and government settings are quite similar, only slightly differing with the mechanics to fit the specific needs of each organization. The basic process of zero-based budgeting is to justify budget requests every budgeting cycle, regardless of prior period budgets. The following sections address the specifics including the history, implementation, drawbacks and solutions, and behavioral impacts of zero-based budgeting.

HISTORY OF ZERO-BASED BUDETING

Government budgeting was established in Great Britain in the late 17th century. The enactment of the 1689 Bill of Rights gave taxing authority

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to Parliament as opposed to the King. Parliament gradually established spending programs and by the 1820s published detailed annual financial statements showing revenues and expenditures and a projected surplus or deficit. The usage of budgets by the United States government did not begin until 1800 when a law was passed for the Secretary of the Treasury to submit an annual financial report to Congress. This action was not taken by the Treasury department, and instead, federal government agencies developed their own reports and submitted them to the Treasury. Several attempts were made in the early 1900s to implement federal budgeting and financial management, but each failed, even though 44 individual states had already passed laws concerning budgets. Congress passed the Budgeting and Accounting Act in 1921 along with the creation of a centralized Bureau of the Budget. Although created in 1921, it was not until the mid-1940s that the federal budget included identification of the major goals and program objectives, a systematic analysis of supplies and needs for both military and civilian purposes, and a long-range plan of projects. In the 1960s, the Planning-Programming-Budgeting System (PPBS) was adopted by President Lyndon B. Johnson to be implemented throughout the federal government. The PPBS was short-lived, however. In the 1970s, every federal department except for the Defense Department abandoned the system. The concept of zero-based budgeting gained notoriety in 1977 when President Jimmy Carter announced he was introducing zero-based budgeting into the federal budgeting process. The term, "zero-based budgeting," and the techniques for carrying out these budgeting processes had been previously introduced in an article written by Peter A. Pyhrr in the Harvard Business Review in 1970, but former President Carter

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adopted this method at the federal level, zero-based budgeting began to spread more rapidly. President Carter, while still governor of Georgia in 1973, contracted with Pyhrr to implement the system for the entire executive budget recommendations for the state of Georgia. However, when the system was applied to governmental budgeting, it failed due to the great amount of effort and time required development and implementation. With further refinement, however, zero-based budgeting was largely hailed as a success when introduced to Congress in 1977. Early business budgets focused on controlling costs and little emphasis on measuring effectiveness. In the early 1900s, the use of budgets increased due to the necessity for industries to implement more careful factory planning. A systematic plan of budgeting arose from two areas: industrial engineering and cost accounting. Scientific methods were used by industrial engineers to arrive at production standards, which could then be used to estimate future operations and performance standards. Cost accountants used budgeting to establish standard costs and to estimate future expected costs in a budgetary form. Also at this time, texts on budgeting and managerial accounting began to emerge. As zero-based budgeting gained traction in the 1970s among public budgeting constituents, it also gained popularity among private enterprises, and during this time a number of organizations modified and implemented the system. An example of an organization successfully implementing this system is the Florida Power and Light Company. In 1977 zero-based budgeting became required for all Florida Power and Light general office staff departments. Ben Dady, the company's director of management control, favored the system because when managers
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develop the zero-based budget, they begin with nothing in terms of budgeted dollars, and have to justify or prove why they need to spend money on each activity or project for all the dollars they expect to spend. New and old problems are treated equally. Every managerial activity is properly identified and then evaluated by analyzing more efficient ways and alternative levels of performing the same activity. These alternatives are then ranked and relative priorities are established. The publicity in the 1970s surrounding zero-based budgeting gave the impression that the system was a relatively new technique, although the system was not new at all. Zero-based budgeting is quite similar to the Planning-Programming-Budgeting system, implemented in the 1960s. Both systems involve evaluating the inputs and outputs for specific activities, as opposed to the traditional line-item format.

IMPLEMENTATION OF ZERO-BASED BUDGETING

The zero-based budgeting system puts the burden of proof on the manager, and demands that each manager justify the entire budget in detail and prove why he or she should spend the organization's money in the manner proposed. A "decision package" must be developed by each manager for every project or activity, which includes an analysis of cost, purpose, alternative courses of action, measures of performance, consequences of not performing the activity, and the benefits.

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This approach is different than traditional budgeting techniques due to the analysis of alternatives. Managers must identify alternative methods of performing each activity first, such as evaluating the costs and benefits of making a project or outsourcing it, or centralizing versus decentralizing operations. In addition, managers must identify different levels for performing each alternative method of the proposed activity. This means establishing a minimum level of spending, often 75 percent of the current operating level, and then developing separate decision packages that include the costs and benefits of additional levels of spending for that particular activity. The different levels allow managers to consider and evaluate a level of spending lower than the current operating level, giving decision-makers the choice of eliminating an activity or the ability to choose from a selection of levels of effort including tradeoffs and shifts in expenditure levels among organizational units. The decision packages must be ranked in order of importance once they have been created. This allows each manager to identify priorities, combine decision packages for old and new projects into one ranking, and allows top management to evaluate and compare the needs of individual units or divisions to make funding allocations. In this respect, zero-based budgeting is quite different than traditional rolling budgets. Rolling budgets often appeal to people who prepare budgets because they make budget development much easier. Managers can add an inflation factor to the previous year's budget and then include any adjustments for major changes. Rolling budgets also give management a concrete number to help make comparisons from year to year. However, traditional rolling budgets have a tendency to create conflict; they can create an incentive to spend money carelessly in order to justify the next year's budget. They can also create inefficient operations due to the fact that individual

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departments or units do not have to justify expenditures based on operations, but only on the prior year's expenditures. Zero-based budgeting addresses such problems that can occur with traditional rolling budgets. In zero-based budgeting, each dollar spent by management must be justified with a detailed account of what will be purchased, how many labor hours are needed, what problems will be faced, and so forth. This allows management an opportunity to review operations in depth and make recommendations for changes to if necessary. The zero-based budgeting process helps managers identify redundancies and duplications among different departments, concentrating on the dollars needed for proposed programs as opposed to percentage increases or decreases form the previous year. Specific priorities of departments and divisions are identified more easily in zerobased budgeting. The process also allows for the comparability of different departments as to the respective priorities funded. Zero-base budgeting enables a performance audit to determine whether each project or activity has been performed as efficiently as planned.

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ADVANTAGES AND DISADVANTAGES.

Although the technique is difficult to implement it is acknowledged has having a number of value added benefits which include:

It can aid organisational change. It focuses management attention to organisational objectives. Managers are concerned with the future rather than the past. Established priorities in relation to resource allocation and Increases staff motivation through participative management and Organisational communication and co-ordination is improved. Assists in identifying inefficient and obsolete activities within the

optimum use of funding.

responsibility for decision making.

organisation.

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Compels planning and examines cost effective ways of improving

activities. There are also some disadvantages related to the technique. These include:

Time-consuming in terms of management input compared to Often difficult to define decision units and decision packages. Requires additional management training (at a cost). There is often the temptation to focus on the short-term rather than It takes time to show real value added benefit of implementing

traditional method.

the longer-term.

such a system.

ZERO-BASED BUDGETING DRAWBACKS AND SOLUTIONS

One drawback to zero-based budgeting is cost in terms of managerial time; it takes a considerable amount of time to go through the process of reviewing operations in enough detail to justify costs each budget cycle without relying on past expenditures. One solution to this problem is to create a rolling budget every year and perform a zero-based budget every three to five years, or when a major change occurs within the operation. This allows an organization to benefit from the advantages of zero-based budgeting without an excessive amount of work. Likewise, traditional rolling budgets should never strictly rely on a prior-year budget plus a percentage; consideration should always be given to past numbers. In some cases, a zero-based budget may rely on some prior numbers where it is overwhelming to create a budget from scratch. Ultimately, the

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process gives top management the opportunity to judge the performance of managers in terms of allocating resources efficiently and effectively, and gives managers more responsibility in developing their budgets. An organization should not feel that all budgets must be developed in entirely the same manner. Some departments can utilize an in-depth study of a zero-based budget while others can use a rolling budget. This is a way to spread the extensive work over a number of years instead of concentrating on one certain year. Many organizations have implemented the system in some form or another and found that it did not work. If properly implemented, however, the process could have a considerable improvement over traditional rolling budgets. The number and nature of decision packages varies from organization to organization; it is not uncommon for large organizations to identify several thousand packages. Furthermore, it is often hard or even impossible for top executives to have the necessary knowledge or time to develop and rank priorities for thousands of packages. To alleviate this problem, managers, after ranking their own packages, can have their top executives rank the packages of all the managers that report to them. This approach is used by one of zero-based budgeting's pioneers, Texas Instruments. Another solution is for each level of management to rank a certain percentage of packages within its own area of responsibility. In this solution, the first level of management may rank 40 percent of the proposed packages; the next level may rank the next 40 percent of packages, while top management may concentrate on the remainder of the budget.

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BEHAVIORAL IMPACTS OF ZERO-BASED BUDGETING

The impact of budgeting on organizations was probably first studied by Argyris in the 1950s. These studies show some of the behavioral effects resulting from the way budgets are used in organizations. The results of his research showed that the particular process used could cause dysfunctional behavior in subordinates, regardless of the degree of technical refinement of the budgetary system. In the 1970s, Hopwood's studies inquired into the effects of budgets on human behavior. These studies showed that the use by a superior of a budget-constrained style of evaluation gave rise to significant levels of job-related tension; had adverse effects on peer and subordinate-superior relationships, and was implicated in manipulative behavior on subordinates. A long line of studies have been performed since then to uncover an array of variables that govern the effects of reliance on budgets on behavioral outcomes, including managerial performance. Examples of these variables include budgetary participation, task uncertainty, environmental uncertainty, strategy, and culture.

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Zero-based budgeting may require an extensive amount of time, money, and paper work; but it does provide a systematic method of addressing an organization's financial concerns, in turn enabling an organization to better allocate its resources. A combination of zero-based budgets with rolling budgets or some other form of budgeting that spreads the work of justifying new budgets each cycle is one way to incorporate zero-based budgeting without undo stress at the same time for all managers with budgetary responsibility.

THE CONCEPT OF ZERO BASED BUDGETING AND HOW IT CAN BE APPLIED TO INCREASE EFFICIENCY IN GOVERNMENT.
Ten years on from New Labours first Comprehensive Spending Review (CSR), the Government intends to launch a second CSR, reporting in 2007, to identify what further investments and reforms are needed to equip the UK for the global challenges of the decade ahead. The 2007 CSR will include a set of Zero-Based reviews of baseline expenditure in Government departments. Zero Based Budgeting (ZBB) is not new it first appeared in the 1960s and is an attempt to find a budgeting model that actually serves the objectives of the organisation. ZBB starts from the premise that no costs or activities should be included in a budget, just because they figured in the costs or activities in previous periods. ZBB works as if the organisation is starting out afresh in the new planning period it is as if the life of the organisation exists as a series of fixed term contracts. It is usually used most effectively
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where the activities involved are wholly or mainly discretionary in nature. But it is very easy to fall into the trap of assuming that something is non-discretionary, for no other reason than the activity has been carrying on at a similar level for a number of years. This initially appears to be a very resource hungry approach, and if applied in this simplistic form, would quickly fall foul of the law of diminishing returns. However, the application of practical common sense to the ZBB concept quickly identifies potential gains. ZBB can be applied usefully to budget heads such as repairs, maintenance or equipment costs. The traditional incremental approach often simply takes last year plus x%. But if proposals are presented with different options for service levels and predicted outcomes, funds can then be allocated on the basis of best value for money. ZBB is there to question set assumptions, and to provide a tool for systematically reprioritising, and perhaps withdrawing from long term activities that no longer align properly with objectives. ZBB has its own jargon, the key term being the Decision Package. This analyses each discrete activity, according to cost and purpose, together with benefits, alternative courses of action, how to measure performance, and the consequences of not performing the activity. Decision packages should relate to activities that are stand-alone; a good test is whether a decision could be made to sub-contract, or to abandon the activity

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altogether. If such a decision could not be made, the activity is likely to be part of a larger decision package. The decision packages are ranked in order of importance, using performance measurement tools such as cost/benefit analysis, but also allowing a level of subjectivity. Few activities are capable of reduction to a definitive measures, while some ideal measures may not be practical because of difficulties in real world application, or simply because of the costs of data collection. For example, managers may believe that there would be a feelgood factor in taking a particular course of action. The ranking list results in a priority order for the allocation of resources. The final budget will be made up of the decision packages that have been approved for funding, whether they are existing ones, or new, reallocated into the appropriate operational units. ZBB, when applied intelligently, parallels much of the thinking that underlies the Efficiency Agenda. Top management can expect to have available the detailed information that will enable decision-making, and that will highlight redundant activities or duplications of effort within an organisation. The key benefit, though, is that ZBB serves to focus attention on the actual resources that are required in order to produce an output or outcome, rather than the percentage increase or decrease compared to the previous year. It should be more user friendly to operational managers than the traditional incremental budget model. It moves the process away from the bookkeepers

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number crunching spreadsheets, and engenders a balanced partnership between the finance professionals and the budget holders.

CASE STUDYS
I Since joining the company, John Thistle, the management accountant at Coverdrive has focused much attention on planning techniques particularly from a short-term budgetary perspective. In recent meetings with Steve Ambrose the companys MD much discussion has centred on the behavioural aspects of budgets on the management team. Steve had recently attended a Chartered Management Institute branch meeting on "Budgets a Management Tool" and one of the concepts discussed was an alternative to conventional method that of Zero-Base Budgeting. Steve decides that the technique should be an item for discussion at a management training "away day" to be held later in the month and asks John to prepare an outline paper on the technique for discussion with the senior management team.

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"A method of budgeting whereby all activities are re-evaluated each time a budget is set. Discreet levels of each activity are valued and a combination chosen to match funds available." A further definition is "an operating planning and budgeting process which requires each manager to justify the entire budget request in detail and shifts the burden of proof to each manager to justify why he/she should spend any money. This procedure requires all activities and operations be identified in decision packages which will be evaluated and ranked in order of importance by systematic analysis". It is acknowledged that ZBB as a system of budgeting was used in the early 60s by the US Department of Agriculture. Research suggests that it was developed as a technique by Peter A Phyhrr a senior manager, staff control, at Texas Instruments and is also now widely used in the federal government department in the US and in many large corporate businesses. ZBB as a planning and decision making technique reverses the process and procedure of the traditional budget setting model.

Traditionally business unit managers simply justify increases over the previous years budget. It is often on extrapolation of last years budget by:

incremental changes for an assumed rate of inflation anticipating increases in wages and salaries recognising new projects / programmes of activity adding incremental business activity as a base for the budget

This model is the one currently used in Coverdrive Ltd.

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ZBB however makes no initial assumptions. The manager of each business unit compiles the budget by assessing each potential activity from scratch the zero base. Every department or function is reviewed comprehensively and all expenditures are approved rather than the incremental effects of what has gone before. Managers should evaluate the value added benefit from activities by asking questions as:

Is the activity or function necessary? Does the activity add value? If the activity was not carried out, what would be the What level of activity is required? Is the activity performed efficiently? Is it cost effective?

consequences?

ZBB technique requires that both decision units be identified and decision packages developed. Decision units are responsibility centres as expense centres, profit centres or investment centres. The manager of the decision unit justifies the budget proposal. Decision packages are developed by managers for their responsibility centre and includes issues as:

The function of the business unit. Performance measure or measures for the unit.

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Costs and benefits from the unit at various levels of activity and Effects or not operating at those levels.

resource allocation.

The packages are evaluated and ranked using costs / benefit analysis technique. The Zero-Based budgeting process thus comprises three distinct stages:

Identify and define decision packages Evaluate and rank packages Allocate resources

A decision package is an activity within the organisation that results in costs and or revenues. A decision has to be made whether or not an activity should be carried out. The question to be addressed is whether or not the activity is worthwhile. Decision packages are compared and ranked in order of preference. Business unit managers prepare packages for the activities within their responsibility centre. Two types of decision packages have been identified:

Mutual exclusive packages are those which contain alternative methods of performing an activity. A comparison of costs and benefits of the options available in the package are evaluated. For example Coverdrive may consider contracting out its delivery of finished goods as a package, whereas, a second package would involve handling deliveries in house with its own fleet of vehicles.

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Incremental packages sub-divides aspects of an activity into

differing levels of effort. The base package specifies the minimum amount of resources required to carry out an activity and the other packages specify additional activity and the relevant costs and benefits.

Evaluate and rank packages.

Each package is ranked in terms of priority on the basis of its value added benefit to the business unit. This process provides managers with a technique which aids the allocation of scarce resources to activities within responsibility centres. The ranking process is participative and may involve managers from expense centres, profit centres and investment centres within the organisation. The overall ranking of the packages is reviewed by the senior management team who consider the views of the entire management structure.

Allocation of Resources.

Resources in the budget are then allocated on the basis of the evaluation and ranking of the various options in the form of competing packages. The results of the evaluation guide senior management in prioritising resource allocation.

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Conclusion It can be said that Zero-Base Budgeting is a systematic logical approach to allocating limited resources where they will do the most good.

II ZERO-BASED PRINT JOURNAL COLLECTION DEVELOPMENT IN A COMMUNITY TEACHING HOSPITAL LIBRARY: PLANNING FOR THE FUTURE
ABSTRACT Objectives: The paper describes and evaluates the success of a zerobased collection development approach to print serials in a community teaching hospital. Methods: The authors first assessed the environmental factors that would determine future needs of the medical library and its customers. Liaisons to various departments and constituencies were substantially involved in the data-gathering phase. Using newly defined collection parameters, a list of journals to consider was compiled and each journal was categorized justifying its inclusion. Any title not having a strong fit in at least one category was eliminated from further consideration. Results: Overall, 21 subscriptions were cancelled and 34 were added. Despite a 15% increase in total subscription costs, mostly due to normal annual journal price increases, the average cost per journal went down from $344 to $327. Journal usage went up over 30%, interlibrary loan lending went down 25%, and borrowing went up 20%.
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Conclusion: As resources available to libraries decline, it becomes critical that collections and services are continually and systematically reviewed with a view to keeping them aligned with the mission of the organization, needs of the customers, and emerging trends. Zero-based collection development can be a valuable tool in bringing a print journal collection into closer alignment with the needs of library customers. INTRODUCTION Each year, serials librarians are faced with the challenge of renewing print journals. Consideration must be given and concessions made to changes in the budget, the ever-growing popularity of electronic journal collections, the reduction in space for archiving, and the changing needs of library customers. In addition, the parent institution may have added or deleted education programs or services requiring changes in focus. In the context of the prevailing issues of the year, the librarian must attempt to cultivate a useful, accessible, within-budget print journal collection. Too often, this decision-making process is conducted at the level of what holdings must be added and what holdings can be done without. Zero-based collection development is based on the concept of zero-based budgeting (ZBB). ZBB essentially means to begin from scratch and justify any addition to the budget based on customer needs, organizational mission, and future projections. When practicing ZBB, The future, and what is to be accomplished in this future, is paramount. This is also true with print journal collections. While making decisions about print subscriptions for the following year, serials librarians view the decisions in a long-term context of the collection development process. Zero-based methodology is also used in the curriculum development process. Paulsen and Pesau call it zero-based curriculum review (ZBCR),
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in which the goal is to help us move from an accidental curriculum to an intentional curriculum. In the ZBCR process, the curriculum is rebuilt through a series of steps based on current student competency requirements, changes in technology and science, and newly established learning objectives. Similar steps can be taken by the serials librarian to assure that the collection remains dynamic and responsive to customers' needs. When discussing the current and future environmental influences on the library, the staff realized that past processes for collection review had been inadequate and needed to be significantly reformulated. The library director, having previously been an accountant, suggested a zero-based approach that would accommodate the increasingly diverse needs of our individual customers and the curriculum changes in the graduate medical education programs. THE INSTITUTIONAL CONTEXT Community Health Systems (CHS) purchased Easton Hospital, a nonprofit hospital, in October 2001. At the time of purchase, it was the only teaching hospital of the approximately seventy hospitals owned by CHS. Currently, it is one of three teaching hospitals in the organization. The Frank J. D'Agostino M.D. Medical Library is located in a prime foottraffic area near the hospital entrance and across from the surgical suites. Due to the location, the library experiences heavy usage for not only quiet studying and database usage, but also quick checks of patient lab results and colleague consultation. In addition, the library is a conveniently located gathering place. Due to a recent donation of space to the adjacent cardiac catheterization facility, archival storage space and current journal

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display space has been reduced. A large construction project currently underway includes building a new library of similar size right off the new lobby. HISTORY OF THE COLLECTION Ten years ago, the library subscribed to, and archived for 15 years, approximately 200 print journal titles. In addition, an offsite storage facility housed archived journals for more than 40 titles, with some going back to the 1950s. Over the years as the budget started to shrink due to the poor financial health of the hospital, the print collection shrunk. Three changes in directors in 3 years also left their mark on the collection. When the current director took over in 2001, the library subscribed to almost 150 print journal titles. The change in ownership of the hospital in 2001 stopped the budget decline, but an increasing demand for electronic access needed to be addressed. The library already offered a number of databases but still lacked organized, easy, electronic access to journals. In 2002, to justify a large investment in aggregated journal databases, a project was initiated to eliminate all of the database-duplicated print journals and low-use journals. To preserve current access, if a journal was embargoed more than a month in the database, the print copy was kept. As a result, more than 50% of the print collection was eliminated. Customer comments were tracked to determine if any journals had obviously been missed. Two comments were received in the following 6 months, and 2 journals were added to the list for re-subscribing the following year. With the new hospital owner, facility changes included plans to raze the building housing the archived older journals and construct a new library.

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The new library would have less print collection space but would include a teaching computer lab, which was much needed for the educational support the library and research staff provided to the residency programs and medical staff. In planning for space changes two to three years in the future, the changing educational needs of the residency programs in response to the general competencies of the Accreditation Council for Graduate Medical Education (ACGME), and the need to provide an increasing array of services to a wider variety of customers without dramatic budget increases, the staff decided to undertake a zero-based print journal collection development project. METHODS After the significant increase in electronic journals and a more than 50% reduction in the print journal subscriptions, staff were left asking, Do the remaining print journal subscriptions meet our current and future needs? The zero-based methodology calls for collecting information about any curriculum or organizational service changes, future projected changes, and other applicable environmental factors. The authors acted as the data collectors during this project and were supported by a library assistant. Liaisons played a key role in this process. The liaisons were substantially utilized during the initial data-gathering stage. Liaisons included internal medicine and general surgery residents, the chief medical officer, the residency program directors, and the assistant chief nursing officer. Rotating students were interviewed as needed. Environmental factors that needed to be considered included curriculum changes due to the ACGME general competency requirements, an active EBM/EBS training program, hospitalists added to the hospital staff who were heavy users of the library, a sizeable addition of electronic
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resources, the loss of print storage space due to the construction project, a new library under development with less planned print storage and more technology space, and the fact that the use of print journals had dropped off substantially. In addition, the library and research departments were much more involved in teaching than in previous years, and residents and medical staff were conducting more research and scholarly activity. Based on the library's mission and the scope of our programs, a deeply archived journal collection was not necessary. Finally, the library did not participate in any consortia or collection agreements dictating the need to maintain particular holdings. Using the collected environmental information and liaison feedback, the next step was to define the parameters of the new print journal collection. The new collection would be geared toward browsers and heavy in EBM/EBS educational resources. It would include journals frequently used by residents for submitting or citing in their scholarly activities. The collection would support the special needs of residents, students, and hospital-based physicians and would include basic journals in the main rotation subject areas. The print journal collection would include few nursing resources as the nursing staff remotely access the electronic nursing databases via the library Website, and the library would no longer offer deep layers of specialty journals. Using the new print collection parameters and liaison feedback, staff compiled a list of potential journals to consider for the new collection. In the next step, each potential journal was placed in an Excel spreadsheet in one or more of the following categories:

title included on the Brandon/Hill list title with significant requests via interlibrary loan
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usage of title, if in current collection title identified as a gold standard title (e.g., JAMA) browsing title identified by liaison(s) as preferred in print title frequently requested by library customer(s) title often used for scholarly activity (e.g., publication site) instructional resource used by the attending faculty, library, or research departments

Any title not having a strong fit in at least one category was eliminated from further consideration. For each remaining title, the authors independently assigned one of the above categories as the main reason for potentially subscribing to it. The few disagreements in categorization were resolved through discussion. RESULTS The original print journal collection held 62 titles. As a result of the zerobased print journal collection development project, 21 subscriptions were cancelled and 34 journals were added. Of the 75 resulting journals, 80% fit in multiple categories as discussed above and 63% were listed in 3 or more categories (Figure 1). Figure 2 shows the results of assigning the main reason for subscribing. The most common main reason was past usage of the title (37%), followed by browsing (28%) and instruction (16%). Figure 1 Total number of reasons for decision to subscribe to each print journal holding (n = 75) Figure 2 Main reason for print journal holding

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Some key characteristics of the collection before and after the project are shown in Figure 3. Although the percentage of titles indexed in MEDLINE changed little, the number of titles included on the Brandon/Hill list increased 15%. The number of print journals duplicated in electronic format rose from 15% to 36% of the holdings in the new collection. Despite a 15% increase in total subscription costs, mostly due to normal annual journal price increases, the average cost per journal went down from $344 to $327. In the year following the changes to the print journal collection, journal usage went up over 30%, interlibrary loan lending was down 25%, and borrowing was up 20%. Figure 3 Characteristics of the collection before and after zerobased collection development project DISCUSSION Every library situation is different. The library's and parent organization's mission must be considered, along with the diverse stakeholders, education programs, services, and consortial holding agreements. Collection development is a social and political process, and thus outside influences and opinions are unavoidable. Providing library customers with a sense of ownership over the process through liaisons is critical. Successfully communicating the steps and the resulting changes in the collection to the customer base were directly reflected in the 30% jump in print journal usage. Despite the significant changes to the print journal collection, the library received only one complaint in the following year about a cancelled journal. In fact, although many of the journals are now archived for much shorter periods of time (one to five years) to save space, this did not result

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in any comments or complaints. Interestingly, the resulting print journal collection is much more aligned with the recommended standards of the Brandon/Hill list than before. In addition, we discovered through this process that our customers value browsing print versions of some journals that are duplicated in the databases. By building a browsing collection with general coverage of specialty subject areas rather than deep layers of specialty journals, we reduced the cost per journal, which allowed us to subscribe to more print journals. The changes we made as a result of our zero-based project align the print journal collection much closer to the needs of our customers at the present time. This raises the question of how often the zero-based process needs to be undertaken to keep a collection fresh, cost-effective, and responsive to customer needs. While we believe it would be unnecessary to repeat this process every year, fluctuating environmental factors suggest that redoing it every five years would be reasonable. Major changes in the curriculum, library, or organization could also be a prompt to perform at least a limited zero-based review. We also believe the zero-based process could be very useful for reviewing other service or collection areas, such as electronic resources, outreach programs, library curriculum plans, and consumer resources. As resources, and sometimes space, decline in libraries, it becomes critical to continually review collections and services in a systematic fashion to keep them aligned with the mission of the organization, needs of customers, and emerging trends.

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