This guide is a product of a study conducted as part of a broader effort by the Department of Education to identify the causes of rising college costs and find and disseminate ways to contain these costs. In institutions of higher education most costs are manageable and can be contained without jeopardizing key services. This can be achieved by designing and conducting a comprehensive cost-management study incorporating all aspects of an institution's support services. Such a study is based on the premise that there are four factors that determine success in achieving those goals: the university's strategy, the work it performs to pursue that strategy, the way in which the work is organized, and the actual results. An effective cost-management study should be holistic, long term, strategic, focused on people and work, and alert to cost/benefit tradeoffs. It should include seven basic components: (1) project definition and planning; (2) fact-finding; (3) analysis; (4) recommendation development; (5) implementation planning; (6) implementation; and (7) communication. The result of the study should be a series of recommendations to improve services and reduce costs, and may be categorized as follows: structure, service definition and delivery, alternative funding, work procedures, operational redundancy, management organization and productivity. (LPT)