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M anaging Microcomputers ~ ~ 1n barge Organiz ations Board on Telecommunications and Computer Applications Commission on Engineering and Technical Systems National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1985

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NATIONAL ACADEMY PRESS 2101 CONSTITUTION AVE., NW WASHINGTON, DC 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the forum were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to pro- cedures approved by a Report Review Committee consisting of members of the Na- tional Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The National Research Council was established by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Acad- emy's purposes of furthering knowledge and of advising the federal government. The Council operates in accordance with general policies determined by the Academy un- der the authority of its congressional charter of 1863, which establishes the Academy as a private, nonprofit, self-governing membership corporation. The Council has be- come the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in the conduct of their services to the government, the public, and the scientific and engineering communities. It is administered jointly by both Academies and the Institute of Medicine. The National Academy of Engineer- ing and the Institute of Medicine were established in 1964 and 1970, respectively, under the charter of the National Academy of Sciences. Library of Congress Cataloging in Publication Data Board on Telecommunications and Computer Applications, Commission on Engineering and Technical Systems, National Research Council. Managing microcomputers in large organizations. Includes index. 1. Business-Data processing-Management-Congresses. 2. Office practice-Automation-Management-Congresses. 3. Microcomputers-Congresses. I. National Research Council (U.S.) Board on Telecommunications and Computer Applications. HF5548.2.M297 1985 ISBN 0-309-03492-2 658 ' .054 84-22617 Copyright 01985 by the National Academy of Sciences No part of this book may be reproduced by any mechanical, photographic, or electronic process, or in the form of a photographic recording, nor may it be stored in a retrieval system, transmitted or otherwise copied for public or private use, without written permission from the publisher, except for the purposes of official use by the United States government. Printed in the United States of America

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Preface and Acknowlerlgments Most people in the business of information management hac! been expecting microcomputers for years. Yet their arrival in the Christmas season of 1981 took many by surprise. It was another example of technology being in advance of our ability to use it and to manage it. Since that time, further technological advances have made microcomputers more powerful, more economical, and simpler to use. These so-called personal computers have spawned a revolution in the way information is gathered and exchanged. For large organizations the revolution means a basic change in the relationship of end users to central computing facilities. Until recently end users depencled on data processing specialists to cre- ate and operate their programs. With new development in per- sonal computers and software, however, end users are growing more and more independent of the specialists: Many profession- als with no prior experience in data processing have introduced personal computers into their working lives. The proliferation of microcomputers has overwhelmed many or- ganizations and in the process created two serious problems for management: How do we control the headlong transition from centralized to decentralizes! computation without stifling the cre- ativity of the end user? And how do we manage the use of micro- computers to enhance productivity and make the organization's total computing capability cost-effective? - ~

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1V PREFACE AND ACKNOWLEDGMENTS The National Research CounciT's Board on Telecommunica- tions ant! Computer Applications held a forum in late 1983 to ad- dress these and related concerns. The meeting featured experts from two broad areas of experience: senior executives from the private and public sectors who have directed the use of computers in their own companies or in the federal government, and technol- ogy innovators who are directly responsible for the increasing popularity of personal computers. This book is the product of that meeting. Written by and for executives, it probes these questions: Where is microcomputer technology going? What are the implications of these directions for large organizations? What are the emerging issues critical to top management? And how are selected large organizations deal- ing with these issues? Many people shared in the creation of this book. In particular, I wish to thank the members of our steering committee (see page viii) and the contributing authors. Staff members of the Boarc} on Telecommunications and Computer Applications who organized the forum-Jerome D. Rosenberg, senior staff officer and forum director; and Lois A. I~eak, administrative secretary also cle- serve special thanks, as does Paula Kaufmann, who editec! the transcript of the meeting. I also wish to recognize and thank our sponsors: Arthur Young and Company, the Tennessee Valley Authority, the U.S. Depart- ment of Defense? the U.S. General Services Administration, and the U.S. Veterans Administration. Francis A. McDonough* Chairman *Francis A. McDonough is deputy assistant administrator of the Office of Informa- tion Resources Management, U.S. General Services Administration. He championed the development of the federal government's Managed Innovation Program, which is fully described in Chapter 9.

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Contents Steering Committee OVERVIEW Vision and Value: Getting the Most out of Microcomputers John M. Thompson The Organizational Issues. John Diebold ~ . V111 3 .. 11 I SMALL COMPUTER TECHNOLOGY WHERE WE ARE AND WHERE WE'RE HEADED Introduction . William H. Leary III Faster, Smaller, Cheaper: Trends in Microcomputer Technology .................................. Thomas H. Wilimott Trends in Personal Computer Software Mitchell Vapor Personal Computer Networks Robert M. Metcalfe v . 17 19 28 36

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V1 CONTENTS II SMALL COMPUTERS IN LARGE ORGANIZATIONS THE IMPLICATIONS Introduction ........... Hannah I. Blank Managing Uncontrollable Growth John H. Bennett . 43 . 45 Managed Innovation: Controlling EncT-User Computing in the Federal Government 52 Ray Kline Personal Computers and the Office of the Future. James H. Bair III MANAGING MICROCOMPUTERS-THE ISSUES Introduction William C. Rosser A Perspective for the Chief Executive Officer AlastairI. Omand . 60 . 69 Managing Microcomputers and End-User Computing: Some Critical Issues .......................... Roger L. Sisson Regaining Control Through Centralized Action Thomas D. Conrad . 81 . . . . . . 93 IV MANAGING MICROCOMPUTERS-CASE STUDIES Introduction . . . Rhoda W. Canter Productivity Through Automation John ]. Alexander, Jr. ....... 99 . 101

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ATanaging hilcrocomputersin State and Local Covernment ......................... ~ Or Tbe User Era ......... ......... .. . 37~~fn ~.Zi~ Moran PersonalComputing, Not PersonalComputers. ^~n ~ ~sfein Controlibrou~b Persuas10n Index . . .115 .124 .180 .135 141

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Steering Committee Managing Microcomputers in Large Organizations FRANc~s A. McDoNouGH (chairman), General Services Administration JOHN H. BENNETT, United Technologies Corporation HANNAH I. BLANK, Chase Manhattan Bank RHODA W. CANTER, Arthur Young and Company E. FLOYD KVAMME, Kleiner Perkins Caufielc3 & Byers WILLIAM H. LEARY III, Office of the Assistant Secretary of Defense WILLIAM C. ROSSER, Gartner Group, Inc. ARTHUR H. SCHNEYMAN, Mobil Corporation MICHAEL E. TREACY, Massachusetts Institute of Technology ~ vail