Making a cost calculation helps you map out all possible costs of a project or activity.

What is a cost calculation?

When making a cost calculation, you map out all possible costs of an activity or project. You take into account the lead time, the required staffing, and the deployment of facilities, for example in the field of development, storage and management. You will also have to map out the (structural) costs that will remain on the institutional budget after the project has been completed. Do you outsource parts of the project or do you want to do it yourself? Alternatives may arise and you can develop different scenarios. You can make better choices based on these types of cost calculations. Therefore, draw up your own project budget for each specific project. Use the cost calculation as input for this.

Why should I make a cost calculation?

Every digitization process costs money. These costs vary widely because every project is different. A project plan can be substantively elaborated on elements such as goals, description of the end product and planning. When making a decision, the first consideration is the costs. Proper cost calculation is crucial to arrive at a feasible and responsible project plan.

Costs can never be separated from benefits. When seeking external financing for a project, a cost-benefit overview must be provided. Funds and grant providers often expect that at least part of the costs incurred will be recouped. In digitization projects, you can also think under benefits about possible returns and possible savings that it will yield. Thinking about options for generating benefits or impact can be an additional input in the development of information policy or a project plan.

To work

What costs do you have to take into account?

Every project entails different costs. In your project budget, take into account the following types of costs:

• Costs for the preliminary investigation : processes around ICT and digitization often also require a good start. Reserve time and resources for the preliminary phase in which the problem definition can be determined and a first orientation can be set out. In addition, it may also be necessary when setting out a quotation and assessment process.
• Personnel costs : Wage costs of own personnel, hourly rates of contractors, costs for training and literature and travel costs. Personnel costs are generally the largest cost item.
• Handling costs : applicable to projects involving the digitization of analogue materials. Heritage comes in many shapes and sizes. A fold-out card or rolled-up poster requires a different way of digitizing than a book of 300 pages. The more special requirements are placed on the way of digitizing the original, the higher the costs will be. Also keep in mind that some objects have to undergo treatment before digitization is possible, such as repairing cracks or removing dust or deposits.
• Costs for equipment, software and ICT infrastructure : These costs include the purchase, depreciation and maintenance. Costs for hardware and software, depending on the equipment required, can be considerable. Consider carefully whether some services could not be better outsourced.
• Facility costs: Costs for housing, infrastructure and communication.
• Finding out and remitting usage rights: It is quite possible that digitized items are copyrighted. The investigation into the rightholders can take a lot of time. Therefore, reserve an item in the budget for determining copyrights and for the fees to be paid. See the theme on copyright for this.
• Costs for promoting a presentation : Reserve a post for the launch of your end product and the promotional activities around it. This also includes submitting the site to search engines.
• Costs for operation and aftercare : It is wise to also identify the costs for the management and maintenance of the presentation and to take them into account in your project budget. These are mainly costs for evaluation, documentation, management, storage, hosting and updating. These costs may often not be included in project budgets used for grant applications, but they are certainly important to include in your cost calculation; Part of the management costs and the costs for storage and hosting are structural costs that recur annually in the institution’s budget.

How do you make a good cost calculation?

The Calculation Model for digitization projects has been developed by DEN to give you insight into all possible costs that the production of digital reproductions of an analogue collection can entail. In the Calculation Model, both the incidental project costs and the structural costs of a digitization project can be calculated. The more specifically you fill in the model, the more reliable the outcome. The working of the model, which is created as a spreadsheet, is explained in the manual (pdf) and there are help texts in the model itself.

Business model

DEN advises institutions that seriously want to get started with revenue models to develop a business model. DEN, together with Kennisland, developed the publication Business Model Innovation Cultural Heritage for this purpose , which provides guidance on how institutions can innovate their digital services. You can also opt for an approach in which impact is leading. This does not only have to be about an economic impact (something that you can express directly in economic value), but also about a social impact, where it is more about the effect that you as an institution achieve on your audience or stakeholders.