Information Technology Reference
In-Depth Information
Perhaps the most devastating critique of corporate computing came
from the venerable consulting fi rm McKinsey and Company. In 1968
McKinsey released a report titled “Unlocking the Computer's Profi t
Potential,” in which it claimed that “computer efforts, in all but a few
exceptional companies, are in real, if often unacknowledged, trouble.”
Despite years of investment in “sophisticated hardware,” “larger and
increasingly costly computer staffs,” and “complex and ingenious appli-
cations,” most of these companies were nowhere near realizing their
anticipated returns on the investment in electronic computing. Instead,
they were increasingly characterized by rising costs, lost opportunities,
and diminishing returns. Although the computer had transformed the
administrative and accounting operations of many U.S. businesses, “the
computer has had little impact on most companies' key operating and
management problems.”
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The McKinsey report was widely cited within the business and techni-
cal literature. The editors of
Datamation
endorsed it almost immediately,
declaring that it “lays waste to the cherished dream that computers create
profi ts.”
20
Computers and Automation
reprinted it in its entirety several
months later. References to the report appear in a diverse range of jour-
nals for at least two decades after its initial publication.
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The dissatisfaction with corporate computerization efforts expressed
in the McKinsey report and elsewhere must be interpreted within the
context of a larger critique of software that was percolating in this
period. As mentioned earlier, the “gap in programming support” that
emerged in 1950s had worsened to “software turmoil” in the early
1960s, and by the end of the decade was being referred to as a full-blown
“software crisis.”
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And in 1968, the fi rst NATO Conference on Software
Engineering fi rmly established the language of the software crisis in the
vernacular of the computer community. Large software development
projects had acquired a reputation for being behind schedule, over
budget, and bug ridden. Software had become “a scare item for man-
agement . . . an unprofi table morass, costly and unending.”
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It is important to note that the use of the word software in this period
was somewhat inconsistent. As Thomas Haigh has suggested, the meaning
of the word software was changing rapidly during the 1960s, and could
refer alternatively to something specifi c—the systems software and utili-
ties that today we would describe as an operating system—or more
generally to the applications, personnel, and processes associated with
computing. He argues that the software crisis as it was understood by
the NATO conference organizers referred only to the former defi nition.
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