Management Myths and EDP

Firms of several sizes, industries, and types were included—at least one firm from each of the following types: Insurance, banking, public utility, wholesaling, wholesaling-retailing, manufacturing-wholesaling-retailing, processing, transportation, investment, and government. Other information was obtained from representatives of computer manufacturers and computer consulting and/or service bureaus. Interviews were held with people in the following positions: Manager of the data processing department, programmers or computer operators within these departments, managers of departments affected by the computer, and senior executive officers.

For a detailed compilation of the advantages and disadvantages, see Grimes Andrew J. Vergin Roger C. , The Impact of the Computer: A Management View, Business Report No. 5 (Minneapolis: School of Business Administration, University of Minnesota, April, 1963), pp. 5–6.

Ibid.

Specific evidence of both the reluctance to change vendors and the continuing need for larger equipment was revealed in the study. Of the eleven firms, nine were either on their second computer or in some stage of planning for a second. Eight of the nine were acquiring larger computers from the same vendors which produced their original computer. This group even included one firm which was unable to achieve a completely operational state with their original computer data processing system and was very dissatisfied with the original equipment. The ninth firm, which was acquiring a larger computer from another vendor, was also unable to achieve a working system with its original equipment because of what it felt were hardware deficiencies.

Naturally, not all of the nine firms had installed equipment of inadequate size originally. Many of the changes were undoubtedly due to increased volume and the availability of improved equipment at later times.

The remaining firm did show a marked reduction in overtime work.

The immediate job reductions cited are those resulting from the applications performed on the computer immediately following its installation. Many firms expected and experienced additional job reductions when future applications were programmed. At the time of this study many of the operations were not completed. Many firms did not keep records of changes resulting from these subsequent applications. Several managers estimated that the impact from these subsequent operations would be two or three times as great as immediate reductions had been.

Two of the eleven firms did lay off a total of twenty-five employees. It could not be determined how many of these were directly attributable to the computer.

The reader should not interpret this statement to mean that upgrading and downgrading did not create problems. The degree of downgrading is related to how each individual perceives his new job vis-à-vis his old job and the new and old jobs of his co-workers. In other words it is a highly personal situation. It may be that management is unaware of the problem created by these changes and is in error in its estimates of their effect.

For a discussion from a non-managerial point of view see Hoos Ida R. , Automation in the Office (Washington, D.C.: Public Affairs Press, 1961); and Adjustments to the Introduction of Office Automation, B.L.S. Bulletin No. 1276, May, 1960.

On-line real-time computer systems would completely eliminate this type of problem.