Information Technology Reference
In-Depth Information
And yet by the late 1960s there were signs of trouble in paradise.
Foreshadowing the “productivity paradox” debate of later decades, hints
began to appear in the literature that a growing number of corporations
were questioning the value of their investment in computing. As an
article in 1969 in
Fortune
magazine entitled “Computers Can't Solve
Everything” described the situation, “After buying or leasing some
60,000 computers during the past fi fteen years, businessmen are less and
less able to state with assurance that it's all worth it.” The article recited
a litany of overambitious and ultimately unsuccessful attempts to com-
puterize planning and management processes at such fi rms as Pillsbury,
Westinghouse, and the International Minerals and Chemical Corporation.
The success that many companies experienced in computerizing their
clerical operations in the 1950s, argued industry reporter Thomas
Alexander, had generated unrealistic expectations about their ability to
apply computing power to more sophisticated applications, such as con-
trolling manufacturing operations, optimizing inventory and transporta-
tion fl ows, and improving the quality of managerial decision making.
But perhaps one in ten businesses was “showing expertise in the manage-
ment of the computer” to higher-order activities. The rest were slowly
and uncomfortably “waking up to the fact that they were oversold” on
computer technology—not just by self-interested manufacturers and
computer consultants, but by their own data processing personnel.
14
Fortune
was not alone in its assessment of the apparent unprofi tability
of many corporate computerization efforts. Beginning in the mid-1960s,
the noted Harvard Business School professor John Dearden published
a series of articles in the
Harvard Business Review
dismissing as
“myths” and “mirages” the alleged benefi ts of computerized corporate
information systems.
15
Prominent industry analyst John Diebold com-
plained, also in the pages of the
Harvard Business Review
, about the
“naive standards” that many businesses used to evaluate the costs and
benefi ts of computer technology. “Nowhere is this lack of [business]
sophistication more apparent than in the way in which computers are
applied in American industry today.”
16
Management consultant David
Hertz argued that computers were “oversold and underemployed.”
17
A
survey in 1968 by the Research Institute for America had determined
that only half of all corporate computer users were convinced that their
investment in computing had paid off. The inability of computerization
projects to justify their own existence signaled “the fi zzle in the 'com-
puter revolution,'” suggested the accounting fi rm Touche Ross and
Company.
18
