GENERAL COMMENTS ON TAB C

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-04376A000100080004-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: November 17, 2016
• Document Release Date: July 28, 2000
• Sequence Number: 4
• Content Type: MISC

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TAB
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1. This Tab contains random counts by industry and other
government agencies concerning the feasibility and value of
Electronic Data Processing.
2. Bibliaganlay
Gustav F. Porssel6l
Electronics Research Analyst
Atlantic Mutual Insurance Company,
l now York, H. Y.
Stanley R. lion
Manager, Mmugement Controls Department
Peat, Marwick, Mitchell &.Co.
70 Pine Street
Now York, N. Y.
Jeers T. Scott
Assistant Manager
Electronic Data Processing Department
Union Carbide Corporation
30 East 42nd Street
New York, V. Y.
John A. Comerford
Manager.. Development Bureau
Consolidated Edison Co., of New York
4 Irving Place
New York, Ni, Y.
'hams New
user, office Systems & Services
East Pittsburgh Division
Westinghouse Electric Corporation
Best Pittsburgh, Pennsylvania
T.
,~,~X.. Sweeney
manager
Price Waterhouse & C=VWY
56 Pine Street
New York, N. Y.
Peter . Wilson
Electronics Research Analyst
Atlantic Mutual Insurance Company
770 Bread vay
new York, N. Y.
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Ueada Univac Department
Washington Hanufacturing Company, Inc.
224 2nd. Ave., North
shvillea Tennessee
Kenneth Uuts,w
Fine we Controls Moment
Union Carbide Corpwation
30 Fast Street
Nets York, N. Y.
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IIBTAi~A'P~G~1 COSTS
"Mm following are one time costs which not be considered:
a. Spam preparation, wiring, air loving, humidity control,
sound proofing.
b. Freight (approxi te1y $5000D)
co Machine tapes cost $40 to $50 ee4h and the laripr computer re-
quire up to 100 each.
d. Cabinets, files, etc.
00 Wir=ing ftwela
f. PISIMAing and Program sing
Testing a dehWging (E out comay took 100 man years)
h. Pirellel operations (This memo that you continue on your old
system and all6do thy: computer operation until it is proven out)
I. Conversion
~. Outside Assistants (consultants )
k. Taitiaa eVmes of hiring specially tom, people. (I O.
no total cost of site pr?peratios wee $122,803.78.
(A USA ldica1 Depot)
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PROGRUMM
"It took $200,000 to $3O0,0O0 to ccupute 3 PIWOM for Westizghou e
on the UNIVAO T." (lam)
"It took 25 people l Year to program a Pwrol, of23,~ lR~e
on the If 705 for Edison. (1arg GOBU co a c). 1c +QRD)
"It took 1 year to work out the program for Accounts Receivable
on the ttstron outer Installation. One fifth of the Staff` could be
let out after the first year*" "It took the experts 5 months to an&Uw West 's old reports
and 4 more months to actumlly ado the p xg." )
"All exc ions which are not standard le M to m nu 1 cards a
it is easier to do by head than to crank data into program. the "
(FMSELL) - In this coeu etion, it is thought notevortby tlhat perhaps
more then 50% of the Agency business axe exceptions."
"The F xg staff at the i dic?.el Dent consists of 3
peoples
1 - Supervisory Progm=ner (08-11)
2 rs NUitexy (WBgt. )
(R*port on RAM - WA radical Depot)
"The stock accounting programs were c tel. in 9 months (ley
to Dec. 1956) and on the basis that the proscribed suer system would
not be altered."
(Report on RAMC - USA ) dicPi. Depot)
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"Thepreparatory costs are large ...The anmal cost of a medium
computer will be from $100j,000 to $MO,,000 per year." ( Oc)
"The computer is expensive. With regards to saving, I do not say
there never will be a saving, but there has been non up to now. It
is really too early to get cost saving." (KLICH)
"Costs to be saved are based on what is present clerical costs."
(mac)
"$1.00 rental requires $.60 operational costs." (KLIOO)
"As a result of data available on the computer, reports grew from
27 to 51. The reports cost more to do on computer than on tabulator,
but results in better management. Increase service affects costs."
(NEW)
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PMO L
"The biggest problem encountered was getting people for the Data
Processing Center (Computer)." (1o1ROW)
The average salary2or a programmer is $6,000 to $8,000; an analyst
from $7,600 to $8,600 and an operator from $5,000 to 43..5w. (Survey
of Conferees)
"Very few codes have actually ,,educed peracrMl as the result
of a computer." (Scott)
A typical Data Processing Center (DPC) organization would be set
up as follows:
Chief,, DPC (normally the Assistant Comptroller)
Manager, DFC, Operations
-Computer Operators
-Key Punch Operators
-Machine Operators
-Clerical Controls
Manager, DFC Research
Analysts
-Auxiliary Machine Specialists
-Programmers Specialists
(NUoI)
"The computer duplicates the experience of people." (OUTSHAW)
"A full time maintenance programer is required to keep those
programs already established on a current basis." (Scott)
"An audit clerk is required at the end of each machine processed
document to find errors and to associate those errors with people with
the hope to end input errors." (Scott)
"Computer cannot duplicate experience - EDP is used up to a point
of least return and thereafter season judgement mast take over."
(GUTSHAW)
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The present staffing of the test project:
1 - Project 0
1 - Supervisory Prog r
1 o Systems Asst (EDPS)
1 - System Planner (EM)
2 Programers
1 - Property and Supply Clark
I - Clerk Typist
8 TOTAL
(US Hadical Depot)
"EDP itself faces a manpower sho ?" (Scott)
"It is not y to find the proper people for EDP. you must twin
them yourself and `atter that you have to hold on to tha " ( )
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O OF C
" sible to u dorestimste the problem which will be encountered."
(OHM)
"Each c has their own problem a no 2 companies area tho.
- no o can do your job - you must do it all yourself - you must
train your owl people." (FOMML)
"Some of the bigg st lessons learned were:
must a. Requires extremely y.~.detailed ple atio of e deviation - you
Must think of the most mthute details that Might come UP.
i4. Operating costs tend to rise became of inforAntion now available.
A fire hand is required to correct this.
c. Scheduling - requires intensive sling - you any require
a scheduling board..
d. A screening unit )i?e needed to review all input documents going
into the commuter. "
"A total of 16,E stock record cars core put into the "
"`. stock accounting function has been operating an a parallel
operation (both the old E and computer) since Kay and will continue
for an indefinite period." (RAMC Report) ( i Medical Depot)
"Mm program for effecting supply control computations, (stock
levels) and producing procurement, listings ha been completed and tested,
but will not be put into operation until September 1957-" (NOM There
is i8 mo. after the initial system psis was stud.) (RMC Study
MA Medical Depot)
The PrDgMM for producing the audit t asactlon s? ster has been
written and tested with two approaches. neither ions been coasidere t
satisfactory due to excessive processing time. Lmeenuch as this is a
-listing sppllicatiou, it is not con idered feasible for the R CO "
(RAIMC Study - USk Mdical Depot.)
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Fessibili-ty Study
"Basic r+e~sscn8 for interest in computers are;
A. Cost reduction and a desire to do something about data
processing.
b. Development of hitherto unobtainable management controls
information end a need for faster data and better data processing
and mint information.
c. Use of scientific management techniques." (XU ON)
"Will what vo propose (computer) be better arfvorae then we have
now?" OM W
"Size of the t making the study eboul4 be Vrooi 2 to 12 depending
on the size of the co ugy, with an average "of 6 recc ended. They people
selected should be from within. the company and must be the BEST. Several
mean years are required to main the study." (Klion)
"The #'eaeibility tam 'should attend schools, conferences, make
visits, attend seminars., use consulting companies and, in general,
learn, from others. There. is a danger of. too touch training as it may
limit imaginative work and actual doing. The team should be sent to
schools Of more than one manufacturer. 7h e supervisor of the team
should be from within the Division which will supply the bulk of the
people. He not have sound. judgment, be a comptroller or accounting
officer and has to be ace in charge of the day to oiay operations
and in top m aexnt. " (BLICN)
"Use consultants - but not to do the job. Use them only as advisors
and don't shift the xeapv +sibility to the consultants." (MCM)
"Analyzing Current Procedures
a. Prepare floe chart procedures within selected amass.
b. Collect and compile list of all form used.
c. Accumulate detailed, volume and cost information (clerical and
machine costs)
d. Study effect of exceptions - your current procedures may have
many exceptions in the normal procedure which would be too bulky or
almost impossible to program an a Mchine which would still have to be
dome manua].l y.
G. Examinee relationships between areas and to other procedural
entities.
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V Fiessibili Y stud,Y
f. 'i input r qui , tea such kin.; tY , volume, cost,
and c cation problAw for decentralized activities.
g. Eat9b1ish report requi uts as to what you actu 11y do med.,
not c tit you now get.
h. Identify nt control needs.
Accumulation of costs as if function weze going to be ela ted
but segregating input costs." ( c1)
"KnoV what you can do now with present equipwut before you go into
caffiputers . `? (=ON)
"Consideration must be given to the fact that CMWMIS, MM
RUZJ YOUR 188 . to ( )
"The study skhould include a review of all reports to ascertain if
they are needed. really Ow cavWy found that their problem use to
eliminate reports end not to procure a commuter. 11
( oR)
"An effective, seusible, visa use m atbe Investigated. - used oz 1y
when proper. You std use the saw UU.A of j t deciding to
get a tars a you world use to any other prob1en. " (ia Ic )
" stiot the need'Zor f'eas't processing ? YOU
must be critical about
the sitj for putting , a Machine in orb to gnat restate 2 or 3
dWs sooner. (SCOTT)
"ThO value of the study s for its .by the review of current
procedures. It my generate profitable saviz'p by tang fat by
this method study. In some cases eliminates need for tile c!!"
(NUON)
"Yom met know uh ,t You, can do with t1 present equipesent
before 3+ n go into ca utery. " (> oo)
" teibility study resulted in the savings of 23 people out
of 100 at Union Carbide." (sCt r) .
"!sea, not consider hoar you can modify existing equilmat to do the
job before you consider a c tear. "
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SAY
"Westinghouse saved $568,3OO a year and expect to save an
addi.tiow1 $257,000 next year. This is based on a reduction of 55
people and an additional 24 more. Undw the manual system, it required
149 people and nov only 94 people. (NW)
NOTE: Figures vere given that the initial start up expense me $357,360,
not including building and a $450,000 per year operation expense. The
$357,360 vas not taken into consideration; so thereforre, the actual
saving is not a fact.
"We estimate that we are saving $70,000 by using the computer on
a 7,500 People Pavron?" One )
W: The initial cost was reported as $300,000 plus installation aM
apparently this was not considered as it is Impossible to save this
amount of money on a 7,500 payroll.
to other $150,000 fo one year. They .ere able to release
people "Edison
"
60 ~
NM: Edison has 1 ;ISM 705 and 2 UEYAS. They maintain and prepare:
2,000,000 assets
100,000 line item
23,E weekly paychecks
2,200 s -montW y p ych cks
1,000 monthly paychecks
161,000 stock holders
2,700,000 bills per day
70,000 bills per day
9,000,000 units of property
25,000 preferred stock hors
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"Average MM months required by WA -B dica1 Depot:
Old System 103.83
PAW
8Potential Savings 25.42
Potential money sav ,s was shorn as $8.,496.00,, but RAAC does
not prepare the following reports which are still prepared by I
Daily Transaction Reinter
Daily Financial State nt
Receipt take-up listing
Financial. Inventory Control
(Verbal - USA Depot)
: The author does not concur in the ata t of savings itch
as the only visual savings could be the reduction in the nuser. of
editors. Partial editing is still required for items not in stock
and substitutes. There is no change in their present workload of
vouchering, coding of documents, document processing and review. So
much as pertains to savings or preparation of chipping documents should
be disregarded as this is a normal function of any Z procedure even
thoagh it is not accomplished by this Agency. 2y later stated that
the bulk of the saving was due to the elt mirnation of 8 editors; if no..
then the initial cost, rental, main amnee and operation costs of the
RAC and the people required to operate se= should be considered
v4pdnst this savings.
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