PURPOSE
This paper examines what happened
when modern computer resources were employed in a variety of businesses in
the Central Wisconsin area. Particular
attention is given to changes that occurred in productivity, and to several
other effects that the computer has had on these businesses. Some potential
installation and operational pitfalls are identified, and are suggestions to
avoid them are issued to present and potential computer users. The findings
of this case approach study should be helpful to those contemplating the
installation or expansion of computer resources.
This paper further reports findings in some recent
literature regarding the constantly changing scenario confronting the
business manager as s/he pursues selection and application of computer
technology in the business environment.
BACKGROUND
Computers
are everywhere! They are in our toys, wristwatches, and in our factories.
They teach arithmetic, schedule airlines, provide entertainment, and
diagnose diseases. In short, computers provide an incredible range of
services in our society. (Kroenke, 1986)
While the cost of computers has generally continued
downward, their power has continued to increase. Most experts believe that
the true impact of computers is yet to be felt. As these tools of modern
management become increasingly affordable, more and more businesses are
finding it advantageous to put them to use in many new applications.
As business moves more and more into what John
Naisbitt, in his book Megatrends,
called the "information society", and the employees in those businesses move
closer to what Peter Drucker calls "knowledge workers", business management
must go through a transition from emphasis on production to a concentration
upon the development, condition, and interpretation of information.
In the traditional production environment, the product
and other industrial secrets were reasonably safe with loyal company
workers. In the information-oriented business, company secrets may be less
important to the workers than the technology they use. (Smith and Medley,
1987, p. 18)
THE CENTRAL WISCONSIN EXPERIENCE
What follows is an
examination of how computer resources have been used in seven firms in
the Central Wisconsin
area. Particular attention is paid to the identification of the firms;
what they do with their computer resources; what productivity changes
they have experienced; and what advice they have to offer others.
Participants in the Study
1. Gremmer-Bablitch
of Stevens Point
- Civil Engineering Services
2. Milwaukee
Teleservices of Stevens Point - Insurance
Services
3. Marshfield Oil
Company of Marshfield
- Petroleum Products
4. Modern of
Marshfield - Upholstered Living Room
Furniture
5.
River Pines Living Center of Stevens Point - Skilled Nursing Care
6. Scenic Signs,
Incorporated of Wausau - Commercial Signs
and Silk Screening
7. WSPT/WXYQ
of Stevens Point
- Radio Station, providing Information, Entertainment, and Marketing
Services
Computer Applications in These Firms
1. Gremmer-Bablitch
makes use of three IBM personal computers for computer-aided design and
drafting. In addition, survey equipment provides computer-readable input
from field work to the computer, which in turn is used to draw contour
maps, compute property lines, and produce estimates. Much of the
hydraulic calculations for jobs are handled by the computer, and the
computer is used for job tracking to record resources used on each job.
In addition, word processing is used by office personnel.
2. Milwaukee
Teleservices uses its Wang VS-55 computer for a variety of
applications, including: storage and retrieval of all policy
information, billing services, all accounting and general ledger
services, policy administration, claims history and authorization,
statutory reporting, and managerial reporting.
3. Marshfield Oil
Company uses and IBM PC-AT and an
IBM-compatible PC for accounts payable/receivable, payroll, monthly
profit and loss statements, and inventory management. In addition,
word processing is used extensively.
4. Modern of
Marshfield is using an IBM System 34 for order entry, inventory
management, process control, all accounting functions, merchandising,
and sales forecasting.
5. River Pines Living
Center has an IBM System 36 and two personal computers, which it
uses for a wide variety of administrative functions including: word
processing, accounts payable/receivable, account analysis, and staffing
requirements. Shortly, they will begin to use these resources for
payroll, patient accounts, medical records, and may link remotely to
their corporate offices.
6. Scenic Signs,
Incorporated uses a special-purpose computer for die-cutting
vinyl lettering for signs, as well as for some design and layout work.
Future plans call for adding computing resources for bookkeeping,
accounting, inventory management, and manufacturing systems.
7. WSPT/WXYQ
has a Wang 2200 minicomputer, a Wang personal computer, and an AT & T
personal computer in use at present. These three systems provide
computing services in four major areas: a.)
Administrative tasks, such as accounting, bookkeeping, billing,
payroll, business information reports, and sales projections; b.)
Music rotation, which assists in the
selection of music and programming; c.)
CO-OP Advertising, which keeps track of the
amount that manufacturers/ distributors will provide to the station's
clients for marketing and advertising; d.)
Election coverage system, which takes
preliminary results and keeps track of election returns for use in
reporting election results on a timely basis.
The amount of time which
these firms have been using computer resources ranges from four months
to 14 years, an average of 4.5 years.
Productivity Changes
One of the major thrusts of this
study was an evaluation of the changes in productivity which has
occurred in these firms as a result of the application of computer
resources. Here is what our participating firms had to say about
productivity increases.
1.
Gremmer-Bablitch found it needed
productivity tools, and found that the computer was several times faster
and more accurate than manual methods. Although productivity increases
are hard to prove, they realize savings because of the decision to use
computers. Because of the use of word processing, they were able
to avoid hiring another secretary.
2.
Milwaukee Teleservices indicated that they
simply could not offer the services they offer without the computer.
They anticipate that because the computer has kept operating lower, they
will be able to offer their services at approximately 10 percent lower
cost, providing a competitive advantage not otherwise available.
3. Marshfield
Oil Company indicated that this was a hard question to answer.
Probably the biggest advantage is the availability of timely
information. This helps in making decisions faster, but probable
has not resulted in any savings of personnel. It has resulted in
better management of the firm, however.
4.
Modern of
Marshfield is
absolutely sure that they have experienced considerable savings since
the installation of the computer resources. In fact, the initial
installation in 1973 was justified by the time and labor savings over a
three to four period. Since then, the time and real dollar savings have
continued to grow. In addition, the timeliness of information is
critical in their business in order to maintain the competitive
advantage; their computer system helps them do this.
5.
River
Pines Living Center has found that the systems they have
installed has resulted in a personnel time savings of about 50 percent
over the manual systems. In addition, the availability of more timely
and accurate information is critical to the organization's operations.
6.
Scenic Signs, Incorporated, which uses a
special-purpose computer for die-cutting vinyl lettering, has found that
the quality and speed of production is their primary gain over a manual
method. In addition, the use of the computer by the art director for
layout and design work shortens the amount of time and effort required
for these activities.
7.
WSPT/WXYQ, which readily admits it has not
reduced the amount of paperwork in their firm, has found that the use of
computer systems has made possible the production of much better, more
timely and accurate management reports and information. They are able to
provide more and better services than before the systems were installed.
Also, although the workload has increased because of increased services
being provided since the beginning use of the computer, the firm has not
had to hire the number of extra people that would have been necessary
without the system. This has amounted to a savings of about three
positions.
Suggestions Offered by these Firms
One of the ways that
information from this report could be used would be to share what others
have experienced with those considering beginning or expansion of the
use of computer resources. Of the suggestions offered, here are some of
the more frequently heard.
1. Define clearly
and exactly what you expect the computer to do to help your firm. Like
any tool, it is only helpful if you know what you want to accomplish
with it. Keep in mind, too, that everything doesn't have to be done with
a computer!
2. Select the
computer resources that fits your needs, not
what someone may want to sell you. Carefully evaluate the match
between your requirements and the computer's ability to meet your
requirements.
3. If you or
someone in your firm doesn't have the expertise to identify the "right"
computer, hire a consultant who has the ability to work for you, and who
thoroughly understands your business.
4. In selecting
the computer system to meet your needs, pay particular attention to
systems and software support services available from the vendor. This
type of support most critical at the beginning, but is also an ongoing
requirement for most firms.
5. Shop carefully
for software (programs) that meet your needs. Like the
hardware, the software must match exactly your
needs and expectations. Here again, your in-house expert or the
consultant can be invaluable.
6. For first-time
users of computers, you should be able to justify your investment in the
computer over a 3 to 5 year period from savings. If you can't, maybe you
don't need one!
7. Look for a
system that is expandable. The need for upward expansion of the system
is critical as the firm and its computer applications grow. Don't get
locked into a situation where you have to change systems to get the
speed, power, or capacity you will need in a few years.
8. Start with a
system that will provide data base capabilities, not just flat file
capabilities. Increasingly, the ability for management to link files of
information together is important for decision making, and that is
difficult or perhaps impossible with a flat file system.
9. If you have to
hire someone to run your data processing operations, be sure that person
fits into the company; don't hire a technician, or someone who sees the
computer as an end in itself.
10. Particularly
if you are a small firm just starting to use a computer, look at the
personal computer as a possibility. Newer technology offers very
powerful computing in a small and relatively inexpensive package. Also,
there is a lot of very reliable business application software available
for the PC, and often at reasonable prices.
11. Keep your
expectations within reason; don't expect the system to operate without
error, or without service. Whatever you calculate for time to
install and bring the system up to an operational level, double it, and
you'll be about on target!
12.
Be prepared to keep your firm in operation when (not
if) your computer breaks
down. Have service arrangements (both preventive and corrective) in
place at time the system is installed.
13.
ALWAYS have backup capability! Keep
your firm's data duplicated and available for use when (not
if!) you files are destroyed. It is relatively inexpensive
for most forms to make an extra disk copy of the daily transactions;
this should be a part of the daily operation.
What
Does the Future Hold for Business Computer Applications?
Whether the question regarding
productivity increases has been, or even can be adequately addressed, is
subject to debate. What has been observed, however, is that area businesses,
much like the rest o~ the world, have recognized the important contribution
that 'computer resources can make, and have employed them in a variety of
ways, and with considerable enthusiasm.
But can we expect from the future? Can we expect
continued decreasing costs and increasing power in computers? Are there
other signs on the horizon that we need to be aware of? In all likelihood,
the answer to all these questions is "yes".
In the past 40 years, the computer revolution has
followed a path similar to that of the printing press and movable type when
they were introduced in the 1450s. During the last four decades of the
fifteenth century, about 10 million pages of print were distributed to meet
the increasing demands of an information-hungry world. (3)
Since the first commercial computer installation in
1954, we have witnessed a continuing downward spiral in both the size and
the price of computing devices. Organized approaches to systems development
can be traced to the 1960s and to technologies borrowed from military
project management. This rapid evolution saw the recognition of common
procedures, the emergence of a software industry, and the commercial
packaging of applications. Now, the software industry has grown to a level
that rivals hardware equipment in both dollar volume and management
emphasis.
The proliferation of computers and compatible
application software has resulted in increasing demands for communication
links between computers. Data communications networks are now worldwide,
offering virtually instant transfer of information where ever businesses are
located.
Through all of this, users have penetrated the technological mystique that
surrounded computers in the early days. Now, sophisticated users are capable
of selecting appropriate software packages and establishing configuration
needs, thereby reshaping the nature of computer utilization.
Today, many top managers no longer manage directly the
physical organization of their business; they manage a conceptual
organization, one based on information about that physical organization.
These individuals are literally managing without ever seeing firsthand the
organizations the run; they are totally reliant on information available to
them from their computing resources. Just as the travel agent books airline
passage for the traveler on a flight the agent never sees, today's managers
make planning, organizing, staffing, directing, and controlling decisions
about resources they may never see. Only 40 years ago, that would not have
been possible.
According to Smith and Medley (1987, pp. 258-266),
several specific changes are on the way that will revolutionize the
managerial decision making through the employment of entirely new computing
resources.
First, just as the microcomputer of today is much more
"user-friendly" than the microcomputers of the late 1970's, computers in
general will become increasingly user-friendly. Improved menu displays
to support interactive users, better icon displays, graphics output
generators, windows for easy transitions among applications, and color
monitors are among the growing list of people-oriented tools. Added to this
will be new developments in natural language processors, expert systems, and
an entire sub discipline known as "artificial intelligence""
Second, the combined forces of market demand and
technological response have brought about significant developments in
networking and data transmission. The next decade will see increasing
sophistication in this area as virtually all computer users will be brought
into instant contact with each other and the information resources of the
entire organization through improved and more economical communications
technologies.
Third, some of the most dramatic technological
breakthroughs have occurred in the area of input and output options to
computer systems. Some that are more likely to see continued growth and
refinement are: voice input and output; optical input; computer graphics
enhancements (particularly in the area of typesetting and photographic
reproduction); laser technologies which will speed both input and output;
multiple purpose devices which will incorporate both voice and data
communications (such as computers also serve as telephones); and
self-service computing, which will increasingly appear in public places like
hotels/motels, airports, shopping centers, libraries, and health-care
facilities.
Fourth, the expansion of computing technologies will
provide both the larger and smaller computers. Supercomputer systems are
increasingly needed for such areas as automated navigation, advanced image
processing for mapping entire geographical regions, specialized production
facilities such as factories controlled and served by robotics, decision
support systems, expert systems, and other outcroppings of artificial
intelligence. The potential for increasing sales of supercomputers is
highlighted by the all-out development efforts undertaken by the Japanese
government and a consortium of electronics industry giants. In the
United States,
computer manufacturers have received an unprecedented number of approvals to
develop a family of super devices.
The interest in smaller systems stems largely from the
need for personal convenience. Already, several major manufacturers offer
"lap-top" computers; this area will continue to grow as newer technology
offers improved display and processing capabilities in increasingly smaller
devices.
Fifth, there will be increased demands for
special-purpose computers and robotics devices. Already, we have witnessed
significant demands for special-purpose computers to serve as communication
protocol controllers, robotics drivers, and even as components for popular
toys. As factories continue the drive toward automation, both robotics
and special-purpose computers will see significantly increased application.
In conclusion, it seems safe to say that the real
driving forces that will affect the future lives of managers, computer
professionals, and society at large are still in the laboratories.
Predicting the exact shapes, sizes, and capabilities of developments that
have yet to surface is an impossible task. Unquestionably, however,
new an more powerful technologies will emerge in the future. In short,
the best is yet to come!
REFERENCES
Kroenke, D. Fundamentals of Business
Computer Systems. Mitchell
Publishing, Inc.
Santa Cruz,
CA
1986
Smith, A. and Medley, D.
Information Resource Management. South-
Western Publishing
Company, Cincinnati, 1987.
