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AVON'S OFFICE SYSTEM John Walsh Avon Products Incorporated Avon is a large company. It is l4th in the Fortune 500. You probably know us for our fragrance sales, but we are also involved in marketing cosmetics, clothing, and jewelry and we have been very profitable for a number of years. We have approximately 35,000 employees; one-third of those we classify as clerical/professional employees. We have l.2 million sales representatives worldwide, and about 400,000 in the United States. These people don't work directly for Avon, they are independent contractors. The major corporate objectives that I am faced with are to improve profit margins, enhance product line appeal, and provide service support to those marketing representatives. One of the first things I would like to do is talk to you about the organization within Avon products because this is a key issue for a lot of corporations and government organizations right now. What is the optimized manner in which office automation, telecommunications, administration, and data processing should be organized? Within Avon products we have consolidated it on a worldwide basis. The whole group of directors, five of us, report to a single vice president. Our decisions impact the entire data processing, telecommunications and office automation aspects of our business worldwide. We meet on a regular basis, about every two weeks. We meet and talk about our project activities. The managers who work in each of the respective areas present their projects to the group. We look to see if there is commonality or conflict and we decide about different optimized approaches. One of the things that we have done is we have consolidated both telecommunications and office automation under a single person. It is getting harder and harder for me to differentiate between the telecommunications role and the office systems role. In fact, 55

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sometimes when I talk to the office system people I tend to switch into some telecommunications discussions and they pick it up very easily. Two years ago it wasn't like that, but today it is. When we study a specific need within our company, we follow a standardized systems development methodology. Whether it is the people wno work for me or the people who work for those development areas, if we are going to go in and study the needs of Product Cost or Purchasing functions, or a manufacturing area, we all follow the same methodology in analyzing the particular needs of that area. Generally, tne user will request our services. Sometimes the user is not sure wnose services to request: my services or the services of the development people. Because the development people in most Fortune 500 companies are backed up about l8 months in terms of addressing significant projects, more and more users have been coming to us looking for a backdoor solution. The check and balance on that is that we do follow a systems development methodology. We will get into an initial survey and if at that point it becomes obvious tnat ADRS-2, or CMS, or something like that is the obvious solution for the user, we will hand that project over to our development people. If it is not so obvious, if perhaps a distributed office system approach tnat type of thing becomes apparent versus ADRS-2, we will proceed along and get involved with a feasi- bility study. We mignt even get into an in-depth study phase and then decide that there are five or six alternatives. Then, we sit clown as a group and collectively decide what is the best approach. Sometimes the best approach is not the approach that we take because we have constraints on our staff, on our resources. We have capacity requirements that we have to address in terms of our resources; or the development staff is limited because they are working on a set of other projects. But this methodology has worked well, because we do not have to go back and r'3-invent the wheel once we get into the feasibility phase and it is obvious it should be a development project, we can essentially take the completed review work and it is transparent to that area. To give you an idea of the complexity of the environment that we work in, on a worldwide basis we have approximately l00 different computer systems. We consider our 370's really to be obsolete in terms of our capacity needs. Tney are all migrating to 433ls or 41s. From a standards point of view we have to address systems solutions on a standard perspective because we just don't have the resources to go out and install seven different word processors, for instance. What we try to do is we try to optimize the selection of equipment on a worldwide basis. It is not always so easy, because I am faced with 56

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import problems in Brazil or something similar in Germany, but generally we optimize the use of our resources by a standards approach. Further, to illustrate the complexity of the environment, most of these computers are communicating with each other on a peer-to- peer basis in terms of the transmission of production allocation or inventory or sales estimating information. This is just a small portion of our network reflecting the European situation. Over and above this there are message switching systems, that are switched out of London, Hong Kong, and McLean, Virginia. At a different level, there are voice networks. We are transmitting digital data in the form of facsimile over this network. So, there is a lot going on in terms of the telecommunications resources. In l976, when I was assigned the responsibility of implementing office automation at Avon Products, the thing that was missing was a conceptual overview as to what was office automation. We had a perspective that office automation was word processing, at that time. Obviously it was more than that, but we could not quite get our arms around the concept. We certainly did not have a frame of reference as to quantifying the concept as to what office automation was about. John (Hogan) referenced that and the need for that. One of the things we did in New York City was to ask the vendors who else was involved with office automation. They told us that companies like Union Carbide, RCA, and Exxon were involved, that the Department of the Army was involved, the academic community, MIT and Wharton were involved. So, we started calling on different people and saying. What are you doing? What is your concept? What are you looking at and what is your migratory path? What are your organizational thoughts? In l977 we put together a group of l2 of these organizations and we called it the Office Automation Round Table. It is not a formal organization, it is informal; although we do have by-laws. The idea was to have a small, limited membership, corporate, government and the educational community and to meet on a regular basis and to share practical experiences and ideas, and to have that membership evolve because we felt that it would be a dynamic environment and it should change, but it should always be manageable in terms of the size of the group. Our objectives were to influence office automation hardware, software development, standards; identify common problems and not reinvent the wheel five times; influence management direction as to what this was all about; and broaden the understanding of management and the people involved in this regarding office automation and also the users; and to establish guidelines and standards for achieving an evolutionary path in office automation. 57

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Bob DicKinson, from Exxon, came forth with the concept of tne business communication system. His concept was that there is very little difference between the way John Hogan works and the way Jack Walsh works. Essentially, we create through thought something we capture, whether we write or we dictate it or someone keybords it. It is stored, retrieved, and disposed of. Dickinson said, "Those steps can be quantified and measured." He said, "The difficulty is in how to do it." But, he said, "If we are going to seek office automation in the corporate environment, we had better be able to quantify it and qualify it so that our managements will make the resource commitments in terms of organization and capital." We wrestled for a long time with a definition as to how to quantify and qualify those steps. Essentially we said that office automation involves the functional integration of a host of technologies that can be overlayed on each of these steps. It is centered around communications and the key to it to us, in terms of the pay-offs, are decision support systems: providing automation tools to those people who are making major decisions for the corporation; not looking at secretarial productivity where perhaps you will net five or six percent as far as total secretarial cost opportunity and you might net that one-eighth of a secretary. That is really not a hard dollar savings. It is better to look at those pay-outs where you can go to the treasurer's department and find someone who is investing $50 million and offer that person access to information so that he or she can make a better investment decision. Perhaps that translates to a l0 percent opportunity, that is $5 million per annum. We also felt that there were things that were extremely important, other than the technology, including organizational factors, formalization of policies and procedures, environmental, human factors, and also, internal and external business factors. Of course, whatever we developed would have to tie to our business plan. Economics were a major consideration because of the major capital investment required. IBM shortly afterwards said essentially the same thing. This confirmed in my mind the integrated synergistic nature of the technology, the users and the functional needs. At that time, we were very confused by the proliferation of vendors who claimed to be in the office automation marketplace. We subscribed at the time to Datapro and Auerbach, and as we started to read through those thick manuals we became somewhat befuddled by the type of system I was looking for. So, we prepared a general RFI that we mailed to eacn of the vendors listed in those books. We said, "We are not sure what we are looking for, but we are looking for an information based system to meet our general requirements for ooth management, secretarial, clerical and professional staffs. It should 58

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be software based, it should offer flexible communications, it should fit in in a transparent manner with our data processing environment, and it should offer vertical and horizontal modularity to meet our changing and flexible needs." We structured this RFI objectively. We defined our criteria as equipment, service support, economics, contractual terms, and financial stability, We had a predisposition towards dealing with vendors like IBM and Xerox because of their ability to service our organization, but we were somewhat surprised when Wang Laboratories emerged as the company best able to meet those total requirements. They met those requirements on the basis of a number of considera- tions: the friendliness of their system; the marketing response; strong vendor interest in our needs, not only short term but long term; a willingness to divulge their planning scenario, which was important to us in the longer term. We weren't looking for short terms solutions, we were most interested in the longer term scenario. We were more interested in an information based system than a word processor. We recognized at the time the need for a communications, information-based, modular system. We looked very hard at Wang and selected them as our standard for office automation text/informaton processing systems. As John (Hogan) referenced, one of the most difficult things was to gather hard facts about our organization. When we went to our management and spoke about our plans for office automation, they said, "We really don't understand what goes on as far as the administrative side of the business. Let's find out about it." So we talked a little bit about some of our concerns Essentially, they are the same as most large organizations: rapidly rising administration costs, increasing personnel requirements, inefficient distribution systems, paper proliferation, inaccessible information, increasing reporting requirements both internally and externally, and, of course, the sorting and retrieval of paper, which in our case was becoming increasingly expensive; more and more information requirements, more and more cost, more and more personnel and flat white collar productivity. In our company the thing that gets management excited is increasing corporate profitability opportunities. So, we presented our scenario with that as the lead item. We also had the intention of orientating our management on what office automation is and what is the potential for it. We wanted to also talk to departmental management. We wanted to build a technology profile, just like I mentioned, in terms of our RFI. We wanted to have feedback with our corporate steering committee on an ongoing basis so that we could communicate to the president and senior management, establish this group as a very dynamic organization in terms of maintaining state-of-the-art expertise and knowledge. 59

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We wanted it to be a fluid and flexible group and yet, at the same time, have an orderly path towards the future in terms of the integration of communications, data processing and office automation. So, with that as a framework, we decided to do an in-depth study of the administrative operations within Avon Products. We wanted to learn about the requirements of users, both professional, technical, clerical and secretarial. We wanted to learn about procedures within the organization, both formal and informal. We wanted to know about the interrelationships between users in different departments. We wanted to address administrative work solutions and needs of both professionals and secretarials, as I said, with information on their current information requirements, information requirements that are needed that have not yet been identified, and information requirements that are not needed, as well as future information requirements. We wanted to know about information processing: manual information processing; distributed information processing; text processing. So, we did an in-depth analysis of a 2,000 person population in our headquarters in New York City. We wanted to look not only at classifications of workers, but we wanted to look functionally at classifications of workers. We wanted to study R&D workers. We wanted to study administrative workers. We wanted to study marketing workers. We felt then, these would be different by category. We wanted to look at the support staffs of each of those functional areas because we felt their needs would also vary. The tools we used — and I am simplifying this — were questionnaires, interviews, logs and file sampling. The procedures were to key off questionnaires for specific areas of interest, and then go back and talk to those individuals who indicated a strong interest in a particular type of system or a strong need for something that was not evident to us. We were concerned about privacy, and the proper involvement of people, because we felt that if we got into a study like this and there were a lot of complaints to our senior management about our probing, we would be finished before we started. So, in all cases, we communicated to people about the intent of the study, which was to provide them with solutions, better tools, better techniques, for doing their jobs. We stressed very strongly we were not there to develop a case to eliminate jobs. It was interesting. We also looked at single sources of information. We found that many items could not be identified unless you went to some old hand who had been with the company 30 years and really understood the interrelationships between different departments. 60

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I am not going to go into data collection, but you see we used pretty decent sampling techniques, received good returns with the exception of a communications questionnaire which was addressed to many levels of management with emphasis on the senior level and which took about an hour-and-a-haIf to complete. Our 38 responses were not exactly what we wanted, but it served our purposes to conceptualize on future needs. We also looked at 22,000 file drawers. I was amazed to find that we have ten drawers for each person in our headquarters organization. We wanted to see how Avon stacked up against other companies. There wasn't a lot of information around for measurements like this, but we did find that similar studies or partial studies had been done at a bank, at an insurance company, and at a manufacturing company. We obtained that information so that we could correlate our results against their results. We found that we were not that much different than other organizations. We thought we had a tremendous amount of typing. In reality it was significantly less than the others reviewed, although those organizations, two of them, are very transaction-oriented. We did the same thing for our managers. Again, we found nothing earth-shattering or significant in the correlation analysis other than a lot of time spent at meetings. I am only going to touch on a few of the statistics uncovered, but I think you will find them very revealing. We found employee statisfaction in the company was very high. Study participants thought it was a fine company. Good longevity with the company, as you see. A very good program, internally, to move people. You will see that people were with us a number of years, yet in their current position for a very short time, indicating a good internal personnel program. Secretarial training is high. We found they were extremely oright, high-level, and really had excellent skills. This indicated to us that in our conceptualization on terminals usage that the secretaries could cope with that quite easily. Some of our secretarial findings: all secretaries, very traditional in terms of the relationships of secretaries to principals. They spent 29 percent of their time typing. Our study indicated that is about l6 words a minute, which when we netted the whole thing out, is pretty good. We found opportunities to delegate about l0 percent of the manager's time to this group. On communi- cation channels, we found we had good relationships between the managers and the secretarial staff. 6l

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Paper flow. The average document is handled four to six time from creation to destination. We found a dramatic need for improved distribution systems. Of the entire study, document distribution emerged as the most important need in the entire study. Lets touch on information storage and retrieval. We looked at 22,000 file drawers. We tagged them and did a pretty thorough sampling. What emerged was a need for a formal records management program in the broadest sense. We have decent records management programs in our securities area, in our tax department, in those areas where formalization is required, but on a general basis, we found a strong need for a general corporate program for records management. One of the most interesting set of statistics that emerged was that only 56 percent of the file drawers are actually utilized, and of that, about half are utilized for business materials. The average document in there is 39 months old. So, when you think about electronic storage and retrieval you are really talking about something that is quite manageable and justifiable. Dan (Hosage) mentioned this morning, electronic mail. The need in our business is for fast, accurate distribution. Sixty-three percent of our mail was found, on the basis of tagging l0,000 documents, to be required within 24 hours. In actuality, it was found to take two and-a-half days within the same department, three and-a-half days between departments and 4.7 days between U.S. locations. Because of that, l6 percent of the mail was found to be hand carried and 23 percent of the documents that were analyzed were considered to be late. Data processing. Everyone indicated a need for increased data processing support. Within Avon we have over 2,000 data processing terminals, a lot of online inquiry and access to various data bases, all different types of systems. The users indicated an extensive need to re-format the output from those systems. Generally we would find somebody would be outputting a voluminous report and it would be retyped, and sent to someone where it was further reconsolidated into a final report. We found, as someone mentioned earlier this morning, a high awareness of data processing on the part of the people we interviewed. Twenty-eight percent of the users told us tnat they had been exposed to various types of systems and many of them could program in basic. Thirty-one percent of the time of the professionals was found to be spent in meetings, which translates to $l2 million in salaries. If you think about just introducing good agendas and good meeting techniques, it is possible to impact that by l0 percent, you can see the potential significance. This alone translates to two cents a share in our case and meetings are an area that not many people talk about. But, just from the practical instruction 62

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perspective, it did not seem to be that difficult to attain improvements in this area. It is just something very worthwhile to think about. The study also indicated additional requirements were needed for copying and duplication needs; manuals were found that were not used, that were out-of-date, and people were commonly calling specific individuals to ask a question because they hadn't maintained their manuals. We found an obvious need for an internal education program for file maintenance, how to conduct meetings and document distribution. Distribution lists are prevalent in my company. They just expand and expand and expand, despite the fact that on a quarterly basis we ask people to look at those; in reality it is rare that someone takes an individual's name off them. We found that reports had increased dramatically. One of the most dramatic things we did was to take the computer output for a single month from one department and stack the reports up end-on-end. It turned out to be two nine-foot piles of paper. In some cases, l00 reports were being distributed to users. I was mentioning at lunch today that there is a feeling that if you have got something like a 3800 printer you had better use it eight hours a day or it is not justified. That type of ranking has resulted in a tremendous proliferation of paper. We found a need for graphics and photocomposition. One of the by- products of this study, when we got into source information analysis, was energy management. I think that was mentioned just a moment ago. As we analyzed our costs, we started to ask questions about monitoring procedures of electrical and steam and oil usage. Then we reviewed the technologies that were available and found that there were a number of mini-and micro-processors available that could control peak demand, reduce consumption, and impact in general the energy consumption area. We began by installing microprocessors (8O8OA) that were provided by Intel, and we migrated subsequently to IBM Series Is. In each case we got a payback on these systems, which ranged between $20,000 and $30,000 in cost, in less than a year; in some cases, six months. So, that proved to be what I describe as a golden opportunity. It brought senior management awareness to the function that we were performing. The cost for this entire macro-administrative review, which involved nine man-years, were recaptured on that single project. At the conclusion of the study, we applied as best we could — and you have to remember this was l977 — what we thought would be the available technologies against how people spent their time. Our conclusion was that there was an opportunity to impact about l9 percent of the professional's time and about 3l percent of a secretary's time. I think the Booz-Allen study came up with a similar conclusions. 63

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We did a lot of thinking about this and we looked at all the available technologies very, very hard. We presented these findings to our management and informed them that the requirements to move ahead included a strategic plan and an organizational plan. We wanted a commitment to address office automation over an extended period of time. We talked about a strategic focus for administrative planning. We discussed this as being a coherent focus and stressed it as a very flexible, fluid thing in terms of an ongoing awareness and a commitment to the program. The strategic plan stated that we would develop guidelines and procedures to monitor and control the general administrative processes within the company. We needed a master plan that looked at internal resources and project benefits on an ongoing basis. We expressed a need to establish controls to make sure that on a regular basis we could review what we were doing against the established plan. And, we needed to define resources that would insure that we would be able to carry out the projects that we identified as worthwhile. One of the problems is that most of us have a static set of resources and an exponential development curve in terms of projects over time. The delta between available development resources and maintenance resource expenditures becomes larger and larger, and essentially you start to push valid users away and the group starts to look like a traditional data processing development staff unable to touch projects for l2 or more months. From an organizational point of view, we stated a need for a corporate guidance consultant responsibility for strategy and planning. We stated that this group should be fairly sophisticated and should not be administrative types. They were identified as a combination of administrative, data processing, and communication types. We stated that the group should be involved with research, and development work, in the sense of software, and implementation and post-assessment analysis. The entire process should be planned, orderly, and phased over time. That is all great, but what has gone on? Over the period '77 to '79 we classified the projects into two categories, stand-alone projects and integrated projects. We developed a very, very large text processing capability using Wang Laboratories systems. Since that time we installed the Wang system and we interfaced it to our mainframe (S/370-N5). We now use our 38OOs, for instance, to output from that center. The Wang equipment in the center is interfaced via communications to an IBM 6670. The center has changed over time. It has grown significantly. It has become much more sophisticated. We 64

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have installed approximately 3O different word processing systems, different in the sense of users. The majority are Wang Laboratories WP or OIS systems. We also installed a DEC system (WS2O2) and have some Vydec equipment which we had purchased five years ago. The key here on text processing for us was user transparency, flexibility, programmability, the ability to provide a basic compiler to a user who has that need, and the ability to have 2780 communica- tions protocol or 274l communications protocol, again, depending on that user's need. We put together a corporate records management task force on the basis of the findings regarding our files and our problems in that area. We have addressed that through micrographics or computer output microfilm. We have done many studies of administrative needs. I think it used to be called work simplification. We actually do a lot of that in terms of reviewing user administrative needs. Maybe it is elimination of forms or maybe it is reallocation of staff. Perhaps it is designing an ADRS-2 for a user. Or, maybe a Wang OIS. The point is, we look at many different system alternatives for many different users. A fascinating system we installed was the PARS system, the Passenger Airline Reservation System. When we looked at travel, we found it was not controlled very well and we needed a system that would provide an audit and at the same time online access so that we could ticket and schedule, not only airline, but hotel and car reservations. Using TWA's resources, we installed an on-line facility for our transportation department. We migrated from analog, six-minute machines, to digital as well as faster analog machines using Rapidfax equipment and linking them to our alternate voice data net-works around the world. We use the CCITT standards worldwide. Message switching. We had a lot of old ASR 33s and 35s. We upgraded all of them using intelligent terminals, so that we could do editing and front-end manipulation of text and data before sending it over our worldwide networks. We tried tele-conferencing. The initial thrust was a one-year pilot using RCA's slow scan system. It eliminated a lot of travel, but it really turned people off. It was not interactive enough. 65

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We installed a Compuscan OCR as a front-end to our message-switching system. Every secretary in our environment types on a pre-programed form either in l0 or 12 pitch depending on whether it is ASCII or Baudat code. The front end to the message-switching system reads the form and sends it to either the domestic ASCII or international (Baudat) system. In the centralized text processing center we initially installed a Wang-30. We had a need to communicate to our mainframe, so we added 2780 communications capability. The Wang system looks like an Remote Job Entry (RJE) terminal to the mainframe.. We dramatically increased the output. We have done some other similar things which I will discuss in a second. We installed a number of digital telephone systems. These devices have security monitoring and are connected to various doors for office control. More recently, we decided to install a Northern Telecom SL-l that can handle both voice and data simultaneously and this portends all sorts of things in terms of the distribution o' information, including digitized voice as well as other digitizeu information of all sorts. Information utilities. We have and use access to over 300 external data bases. Our research people are involved in toxicological, medical, chemical, physical and immunological studies. Our marketing people are curious about what is going to happen with the l980 census in terms of the way we do our business, our legal research people are always looking at legislative information. We look at the Department of Commerce data bases in terms of our limitations in doing business in places like Brazil or Spain. I can go on, and on. We have an information scientist who runs that system. She has an assistant with a Masters degree in Library Science who manipulates it. It has paid for itself literally dozens of times over. Current project activities. More administrative reviews are now underway. More people and departments are coming to us for help as we become more well known and accepted. This has resulted in more complex administrative reviews in order to assist departments that have various systems, or that have combinations of systems. Because we now have to address different solutions, our task is starting to get more and more complex. Distributive text processing. I can't say the word "text processing" means anything in our environment. I think information processing is really what I am talking about. Almost every system we have has some sort of communications either on a peer-to-peer basis or on a distributed-to-CPU basis. We are looking for switching capability in terms of being able to send a broadcast message or a multiple address message between different systems, as well as on a 66

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terrainal-to-terminal basis. That whole area is changing dramatically. More and more people are coming to us and saying they need software support so that they can do different things at the local level. They want to control their data and manipulate it locally. That presents us with some problems in terms of formalized procedures on software development. Expanded micrographics. We are pushing very hard in the area of micrographics to eliminate paper. It is a slow battle. We are having a very difficult time selling the concept of records management. It is like motherhood, baseball, and apple pie. I hate to say that but that is really a tough one to sell, despite the obvious advantages. Yet, at the same time, when I look at the synergism between all these technologies and paper and people it is obvious that a very good records managment program is going to be as important as communications are in pulling the whole thing together. As for integrated project activities: in New York we are installing a very large digital telephone system, a Northern Telecom SL-l/XL. It is justified on the basis of a competitive analysis of Bell equipment, (the Dimension system) , but really in the back of my mind an additional important factor is that it can handle simultaneous voice and data. It will enable us to add terminals for various users. It is an internal Ethernet, in a sense. People can send and receive messages through that switch. Simultaneously with use of the telephone, someone will be able to address my administrative terminal, and be able to send me a message. So, our intention is to migrate with that system from the voice environment into the hybrid voice and data document distribution enviroment. The one piece that is missing is a really good communications based, yet, user transparent terminal for both the secretarial as well as the professional environment. We have tried systems like Qwix and Olivetti and a host of others, but they really don't meet our requirements for the secretarial area. In the management areas we have used TIs and a number of others. They do not fit our universal requirements either. One of the most interesting projects we are working on right now is an improved method to prepare our brochures. Anyone who has been involved with the emergence over the past year of photocomposition, photo-typesetting, interactive graphics and color graphics, realizes that this is probably the most dynamic portion of the whole information processing revolution. We are working with people like Raytheon, Compugraphic and Harris and a host of others, companies who are looking at how to build a total integrated printing system. We want a unique system, with very sophisticated color graphics, with user transparent terminals at the front-end; that copy-writers and art directors feel comfortable with; with communications to various data bases that reside on DEC equipment or IBM equipment at the front end. We want to integrate our printing 67

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capability into the total system and be able to flow information through and produce excellent copy and graphics. Teleconferencing. We can't push that enough either. We have had a lot of people who could use teleconferencing. However I think there is a reluctance on their part to leave their offices to go somewhere to use a public facility. We have a feeling that if we could bring teleconferencing capabilities directly into the user enviroment it would work from an operational sense, but not from a justification perspective in terms of eliminating travel. Working in a marketing organization there is a strong need for individuals to get out to the field locations and rub shoulders, and find out what is going on. But, as an operational tool we think teleconferencing has considerable viability, assuming that it can fit in with our other networks. We think if we can justify teleconferencing on the basis of modest cost increment, it will be fine. However, we don't think we will be able to justify it alone. I am going to cite just a few of the difficulties of working in the current operational enviroment. We had a Wang system working; highly operational, very satisfactory. Despite that, we were still spending a decent amount of money on the outside, especially in personalized letter-writing preparation. We wanted to eliminate that. We wanted to eliminate intensive keyboarding and maintain a high level of personalization in terms of marketing base letter-writing. To do this, we installed an IBM 6670 to work in conjuction witn a Wang system and we saw a dramatic increase in output, from a million lines a month to four million lines, which brings me into the next point. People working in the area of integrating a variety of vendor systems have a lot of problems. To do this project we had to go through all sorts of finger-pointing, we had to face the complexities of communications and the lack of vendor support. It is very a complex task, and as we move toward integration I think we are going to experience more and more difficulty in getting the levels of marketing support that we want from the vendors, particularly as equipment costs come down and vendors cannot justify such support. As to the future let me just briefly say, we are looking at a lot of activities. We are looking at worldwide network development. We are looking at interactive cable TV. We are participating in the German and United Kingdom Vudata experiment. We are intrigued by the fact that 2l percent of the population in the United States now has cable television. We are very interested by the Warner Cube system. Video-disk has great potential as a learning tool for us. Voice response — Dan (Hosage) mentioned it this morning — We are intrigued by it. I think it is going to be as revolutionary as the word processing enviroment was four years ago. I think the key summary point is the need for the proper organization to manage all this on an ongoing basis. 68

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Conclusions Senior management must be committed to do all this. It must be integrated. The largest pay-off will be in management decision support systems. There is an absolute need for standards in terms of system compatibility. There is a great difficulty of getting good staff. We need to maintain technological awareness. And, of course, there is an overall need for an overall, flexible, fluid, evolving strategy. 69

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