Welcome to IOI's Costs and Benefits Model of Collective Investment

Updated March 19, 2021

Inroduction and Orientation

We modeled patterns of benefits over a five year period. These benefits come from a variety of open and collective efficiencies, reductions in risk, and improvements in operations.

We have also included simplified funding models (economic scenarios bringing money in), that permit you to test smooth or lumpy external or internal contributions.

We chose to use a five year modeling period in order to include enough years to accommodate startup periods for new software, but not go out so far as to step beyond typical institutional

strategy timeframes. We did not initially include discount rates for investments or costs that occur in out-years given the current low interest rates and added complexity.

Note: The model is initially addressed to an individual institution. The goal is to aggregate multiple institutions’ data to see mutuality. That is, gains an institution sees in one period

could be subsidized by the collective, followed by investments by an institution in another period, being accompanied by gains by others.

The documentation explains the rationale, assumptions, approoach and use case. It also shows an example of how you can use it to do scenario analysis.

There are a number of assumptions you can vary when you customize this for your institution or scenario. Download a "backup" copy for your reference.

Please note the following simplifications of the model that we made, but that you may choose to change:

- This contains reasonable, but not verified rates. Rates will be validated with the collective, and some will be unique to institutions or open infrastructure projects.

- We did not apply discount rates to the “out years” of the model. This could easily be added, but for simplicity (and in a low-interest market) we chose not to do that at this time.

- We calculated the benefits of both open infrastructure and the collective, as a difference over to a primarily commercial base case, year after year. We did not calculate

a return on investment, or “ROI,” because, both "I" and "R" are complex. For example, while we could estimate benefits versus dollars invested from the collective

we'd have to ask which investment? For example, the collective labor or funds from a donor? And we'd also ask about benefits beyond improved rates and standards,

It is not reasonable to estimate the non-productivity returns from the entire open infrastructure enterprise -- such as research content, community, grant info, or cultural heritage.

Jump to the sheets:

Snapshot of benefits over time, given the assumptions you put into the model.

Model's focus: productivity, innovation, and risk reduction. Rows marked with "x" are benefits that reflect both "open infrastructure" benefits, and collective benfits

(e.g., shared knowledge or cooperative buying).

Quantitative assumptions are labor rates and cost-decay rates (or benefits accrual rates) that the institution can input. You adjust the red rates and decay patterns.

Qualitative assumptions are below the quantative. You will want to edit these as well for your own organizatio.

Cost and benefits analysis uses a base case (comercial), and an open infrastructure/collective case, which is primarily open. You adjust the red staffing or funding.

You will see that the model pulls the decay patterns from the assumptions model.

Help us improve the model:

We welcome your feedback and suggestions! There are many additional things you might choose to do, such as sampling rates, combining different model scenarios

(in a multi-institution model), changing funding scenarios, or automation.