Q's & A's For Prospective Users '~
Anthony S. Niskanen and Oscar H. Rothenbuecher Arthur D. Little, Inc.,.Cambridge, Mass.
The authors have reversed their usual roles as-market reo search consultants to computer systems builders, i.e., identi-fying new markets or prospects for systems manufacturers. Their goal in this Profile is to use their experience to pro-vide guidelines for the prospective user - helping him de-termine if he is a true candidate for a small business system and what type of system best fits his needs.
New systems for the small user abound in today's computer marketplace - a result of hardware-software design talent being combined with improved, lower cost technologies.
Evolving at a fast rate, these systems are breaking down the conventional product categories which define hardware by functions, such as "key-to-disc," "remote batch," "intelligent terminals," "business computers," or "accounting machines."
What emerges is a continuum of systems that possess the potential to do a wide variety of tasks. For the prospective user /buyer of such small systems, the choices turning up al-most daily are bewildering.
The first suggestion to be made to the prospective user is to look at these produ.cts last! Look first at yourself and your own business operation.
Anthony S. Niskanen is a staff member with Arthur D. Little primarily engaged in product, market, and corporate planning studies associated with the information processing industry. His recent work has in·
cluded a study of trends in the development of computer peripherals and systems, and an evaluation of the impact of computer technology on the data entry and business forms industries. He holds a B. A. from Amherst College and an M. A. from the University of Massachusetts.
MODERN DATAl NOVEMBER 1973
ARE YOU A GOOD PROSPECT?
The selection process about to be described is what most good salesmen follow for "qualifying a prospect" belOl'e making a sale. It works on a question and answer basis. A majority of "Yes" answers implies a good prospect who will probably be a happy customer. A predominant number of
"No's" denotes a poor prospect who will most assuredly be an unhappy customer.
A string of "Yes" answers does not guarantee a sale or customer bliss. It does, however, improve the odds that both the salesman's and the prospect's time will be well spent in pursuing further product proposals and evaluations. With this caveat in mind, the following questions are posed to de-termine if you are a good prospect for a small business com-puter (SBC) system.
ONE: Can you organizationally justify an SBC?
Answer "No" if your small operating lmit (sales office, ad-ministrative office, warehouse) is part of a large corporate or government organization with a number of similar operating wlits. You will find it less time consuming and much more profitable to seek the aid of the member of your corporate EDP staff who is responsible for planning. This individual
Asa senior staff member of ADL's Informa·
tion Systems Section, Mr. Rothenbuecher has designed and evaluated computer sys·
tems for users in the U.S. and overseas. Be·
fore joining ADL, he was responsible for the design of VW's National Computer Service.
While with Remington Rand Univac, he was in charge of introducing several of the first commercial EDP systems in Europe. Mr.
Rothenbuecher has a B.A. from Montana State University, and an M.A. in Industrial Organization from Frankfurt University.
53
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-54 MODERN DATA/NOVEMBER 1973
PRODUCT PROFILE
has the combined advantages of being trained to perform system analyses; of being familar with your organization, its procurement policies, and current systems in use; and, most important, of being able to examine system tradeoffs - ex-ploring the pro's and con's of such alternatives as remote in-telligent data entry devices, "slave" remote batch terminals, a series of independent "stand-alone" systems, or a network of interconnected small systems.
Don't hesitate to call the systems planner. Your knowl-edge of your own operation and system requirements will be of critical importance in planning - and in making the right choice.
Answer "Yes" if your operating unit is "one of a kind," a specialized department within a larger organization, or an independent small business.
TWO: Can you cost-justify an SSC?
Answer "No" if your organization has less than six clerical, management, or accounting personnel. If so, you probably don't have a sufficient work flow and/or displaceable gen-eral and administrative expenses to justify a general purpose SBC. Although systems can rent for as little as $300 per month, average rentals are closer to $800 to $1000 per month. Associated labor, supplies, and overhead can add from two to three times the hardware rental to total costs.
Answer "Yes" if you presently employ over six white col-lar personnel or expect to within the next year.
THREE: Is your present system obsolete?
Answer "No" if your operation is functioning smoothly us-ing:
A manual system that can handle a variety of tasks and services.
A service bureau (either online or batch) that specializes in your palticular industry and has a number of fully-devel-oped packages for your major applications.
One or more bookkeeping machines. Research tends to support the view that bookkeeping machines are quite effec-tive fo~ small users. Volume may be increased by the addi-tion of another machine, orientation to individual transac-tion entries, and tub-file manual storage is easy to understand, and new and increasingly sophisticated book-keeping machines are entering the market at a high rate.
Answer "Yes" if you use:
Tabulating equipment (a resounding "Yes").
A manual system serviced by eight or more employees which is not meeting information-handling needs.
A general purpose service bureau for only one or two ap-plications, where billings approach the $300 to $500 per month level.
FOUR: Are you the right kind of person for an SSC?
Answer "No" if:
You do not require management reporting capabilities be-yond those of your present system. Without this need you will probably find that an SBC is more trouble than it's worth.
You are not willing - and cannot inspire your employees
to be willing - to accept modified operating procedures.
MODERN DATA/NOVEMBER 1973
CIRCLE NO. 26 ON INQUIRY CARD
55
The worst computer system designs seen in operation are usually the result of forcing the new system to conform to old procedures. The user cannot understand why his system is inefficient, and good programmers avoid such systems like the plague.
You are not willing to invest the time and effort to study the system and learn about its operation, and to either train a key employee or hire a knowledgeable operator who will be responsible for the system.
Answer "Yes" if you're still with us.
If you are heavily on the "Yes" side of the ledger at this point, you're probably a good candidate for an SBC system.
Those who aren't quite sure of their status should also count themselves in (for the sake of simplicity, the questions were slanted towards the "No" side).
SElECTING THE SYSTEM
The SBC system field is populated by a large number of companies and models. The fact that many names may not be familiar is not necessarily a disqualifier. Because of the fragmented nature of the user market, specialization in a specific industry/application is quite common.
Most of the systems on the market today use similar - if not identical - hardware components. Differences are pri-marily in systems software and applications packages, and reflect an orientation towards a specific industry. informa-tion processing procedures within a particular industry have many common elements applicable to all firms in the indus-try. A systems design house can therefore develop and
mar-ket a turnkey system which can be adapted to the require-ments of any user within any industry.
After determining the companies which market systems for your industry, determine if each company has the capa-bility to support and service systems in your geographical area. Then determine if they are strong enough financially to be around two or three years from now to support and
service the system. .
The Simplest test for geographic capability is to obtain a list of users located in your area. Call - or better yet -per-sonally visit as many installations as possible. Satisfied users are usually willing to talk about their system and any changes made to optimize its application.
Financial testing is not as easy. Firms in any segment of the computer industry function under stiff competition and are in constant need for new funds to support growth. Be-sides obtaining a standard commercial credit report on the potential vendor(s), also ask for the name of their local com-mercial bank office. Give the banker a call. Chances are he will be helpful - and also interested in your appraisal of the prospective system supplier.
By the time you start talking to the banker, you should have a better lUlderstanding of your present system and its strengths and weaknesses;
Your priorities should be set in terms of what new appli-cations are needed;
You should know the person inside or outside of your or-ganization responsible for the system;
You should have established a timetable for changing or creating new forms and procedures.
At this pOint you can let the salesman buy your lunch! ..
CONTROL
• Visual disturbances • Work flow56
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CIRCLE NO. 27 ON INQUIRY CARD
MODERN DATAl NOVEMBER 1973
John A. Murphy • Associate Editor, MODERN DATA