STATUS STUDY OF DATA PROCESSING SYSTEM OF DEPUTY DIRECTOR FOR SUPPORT, CENTRAL INTELLIGENCE AGENCY, BOOK 1, 19 FEBRUARY 1962

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00708R000600140001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 163
• Document Creation Date: December 16, 2016
• Document Release Date: August 16, 2005
• Sequence Number: 1
• Publication Date: February 19, 1962
• Content Type: STUDY

TATU'S S UD ' OF
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DATA:..ROCESSIN `SYSTE1u OF;
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25X1A
LETTER, OF TRANSMITTAL
25X1A
Chief, Automatic Data Processing Staff
Deputy Director (Support)
Central Intelligence Agency
1016 16th Street, N, W.
Washington, D. C.
16 November 1961
We are submitting herewith the status report in compliance
with the above contract. This report is submitted under three
covers, one containing the text, the second containing various
charts and diagrams that support the text, and the third con-
taining appendices.
Very truly yours,
25X1A
25X1A
Project Manager
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25X1
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STATUS STUDY OF
DATA PROCESSING SYSTEM OF
DEPUTY DIRECTOR FOR SUPPORT
CENTRAL INTELLIGENCE AGENCY
BOOK 1
25X1
25X1A
19 February 1962
"This material contains information
f
affectin th na`..~.Ji al d en",e o the Un tad
States ie1 a^ c ?~ -T" 01t?:e wind 79e This ~ccument consists of gas,
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lavs?s, fltle 18, `LT `
the tra i.~xafSN to e,z rstLla non of which in
any r..;Inner to ,,App ocrftl*hse 2005$8EC R~~P90-00708R00060014. 9 a 2.2. - (/
law." 1
prohibited by
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A thirteen week study to determine the status of the data
processing system of the Deputy Director (Support) was
initiated in October 1961. The computer based system
has never functioned to expectation.
the difficulties now found within this system.
This report delineates the present status by use of
charts and descriptions. It points out certain problem
areas that have been causing dissatisfactions and ineffi-
ciencies within the system. Recommendations are made
for actions, over an extended period, which will alleviate
It is further pointed out that the anticipated savings in
tcient system will come into being.
time, costs and personnel have not materialized. This,
report shows that these expectations were not based on
fact and that they have not been achieved. Furthermore,
they are not significant factors in the operation of this
particular system._ It is shown that the requirements
must be based on the ability and necessity to complete
assigned tasks. Until a comprehensive systems study
is completed, it is improbable that any rigorously effi-
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TABLE OF CONTENTS
BOOK 1
ABSTRACT
TABLE OF CONTENTS
LIST OF FIGURES
1. INTRODUCTION
A. Purpose
B. Objective
II. STATEMENT OF WORK
III, ADDITIONS TO STATEMENT OF WORK
IV. DEFINITION OF SYSTEM
V. METHOD OF ANALYSIS
VI. PRESENT SYSTEM
A. Organization Charts
B. SystemFlow Charts
1. Office of the Comptroller
a. Finance Division
b. Fiscal Division
c. Automatic Data Processing Division 23
2. Office of Personnel 27
a, . Records and Services Division 28
b. Qualifications Analysis Branch 32
iii
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3. Office of Logistics 38
a. Supply Division 38
b, Inspection and Inventory Branch 41
C. Equipment 42
VII. MODEL SYSTEM 44
A. Management?s Role 44
B. Functional Groups 45
1. Description 45
2. Definitions 47
a, Financial Functions 47
b, Personnel Functions 50
c. Supply Functions 54
d, Support Services Functions 57
e, Data Processing Functions 59
C. Information Flow
1. Standard Payroll 61
2. Equipment Purchases
3. Othe r
D. Development of a Computer-Based
Data Processing System
1. Introduction.
2, Systems Study
3. Systems Design
iv
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VIII.
NEED FOR SYSTEM INDOCTRINATION
88
A.
B.
Training Courses
Limitations
89
90
IX.
EVALUATION OF EDP SYSTEM
94
A.
Performance and Progress -with
Present EDP System.
94
:l.
Logistics Stock Status Book
99
2,
Cost Accounting versus Allotment Accounting
101
3.
Reports
102
4,
Forms
103
5.
Entry of Data
104
6.
Posting
105
7.
Da-Span
106
8.
Error Rate
108
9.
Late Time and Attendance Cards
10.
Exceptional-Information, Reports
11.
Overtime
12.
Peculiar Problems
13.
Summary
111
B.
Operating Cost and Computer Operating Time
112
C.
Progress Towards Original EDP Concept
113
D.
Savings in Manpower, Time n and Equipment
116
v
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E. Equipment
117
F. Workload
12.4
124
1.
Present
126
.2.
Future
G. Scheduling Effectiveness
1.27
H. Users' Reaction to Computer Services
128
1. Summary
130
1
X. RECOMMENDATIONS
32
BOOK 2
Contains Figures 11 through 43.
APPENDIX A
MANAGEMENT STAFF STUDIES
A- 1 thru
A-83
APPENDIX B
FINANCIAL REPORTING SURVEY
B -1 thru
B-2
APPENDIX (7,
APPENDIX :D
LIST OF ORGANIZATIONAL FUNCTIONS
LIST OF FORMS
C-15hru
D-1 thru
D-7
APPENDIX E
GOVERNMENT BUDGET AND ACCOUNTING,
PUBLIC LAW 863, 84th CONGRESS
EE- I -3 thru
APPENDIX F
EVOLUTION OF DD/S COMPUTER SYSTEM
F-I thru
14
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Figure Nod Title
1 Deputy Director/Support--Orgamza.tion Chart
2 Office of the Comptroller--Organization Chart
Office of the Comptroller, Finance D?~~vision~-
O Organization Chart
4 Office of the Comptroller, Fiscal Division?.
Organization. Chart
Office of the Comptroller, ADP Division-,
Organization Chart
Office of.the Comptroller, Electric Accounting
Machine Processing Branch--Organization.
Chart
3 Office of Personnel--Organization Chart
Office of Logistics--Organization Chart
Office of Logistics Supply Division-Organi_
zation Chart
Office of Logistics, Supply Division, Stock
Management and Catt.1ag Branch--Organization
Chart
11 Office of. Logistics, Supply Division, Depot Stock
Control Branch (proposed),--Organization Chart
12 Cha.rge Flow, Expenditures on all Unvouchered
Property and Inventory Accounts
13 Unvouche red Leave Account- -information Flow
14 Finance Division Compensation an4 Taxes
Branch--Flow for, (EOD) Entrance on Duty,
Staff Agent
Figures 1 through 10 are. in section. V1, Fiegu:r s 11 through 43 are
in Book 2
v::L
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Figure No. Title
15 Fiscal Payroll Branch.. -T&A Card Flow
16 Fiscal Division --Pa.yrol.l Branch--Audit of
Personnel Action Af:'ecti,,'g Payroll.
17 Fiscal Division-Payroll. Br.anch?---Leave
Account Flow
18 Fiscal Division . _.Payroll Branch- ..Problem
Areas
19 Auditing Bills Against Purchase Order
20 Bills Audit Against Contract
21 Audit of Individual Contr?a.cts for Payment
22 Expediting Payments
23 EAMPB of ADPD..?Ac:cou-nts Branch-.,-To
Provide Means for Making Entry of Various
Forms of the Finance Division into EAM
24 Vouchered Payroll Branch of EAMPB of ADPD-?a,
Vouchered Check Preparation for Payroll
Branch, Fiscal Division., To Prepare Checks
and Time and Attendance Reports on A Once
Every Two Weeks Basis
25 Electric Accounting M.acin.e Processing Branch
of ADPD--Per?son.nel Branch,-To Maintain
Record of All Employees as to their Knowledge
of Foreign Areas and Languages
26 Electric Accounting Machine Processing Branch
of ADPD-mCover Operation File
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Figure No. T-rltle
EAMPB of ADPD.a-To Maintain. and Update
A List of Individuals Awaiting Security
Clearance
Electric Accounting Machine Prrocessirzg
Branch of ADPD Personnel Branch--T o
Maintain A File of Applicants for .Employ-
ment with the Agency (All Departments)
as to their Employ_ .e:nt: Status
Logistics Branch of EAMPB of ADPD -
Daily Process_-To Adtc st Inventory - by
Items Added or Withdrawn.f:r?om Stock
Listing and f:rrom Physical Stock, Daily
Electric Accounting Machine Processing
Branch of ADPD Logist.1cs Branch.--To
Update (make cha.n.ge s, additions, and
deletion-,) in the Nomenclature (master)
File for Logistics
Personnel Actions Su.r-rim.ary for Changing
Status of Perso r,nel (H.".:wir g new personnel,
transfers, etc. )
Office of Personnel.- -Reco:r?ds and Services
Div:sior , =Record of Overseas Service
Office of Personnel,-.?.,.Recc:~:rds and Services
Division.,.-Prcn.-aot on Records Flow
Office of Personnel--Rec;ords and Services
Divisior ......Position Control Register
Requisition. Validation
To Withdraw Merchandise from Stock and
Ship to Requester.
Inventory Inspection Flow--To Take Inventory
on. Request
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Figure No.
Title
RCA 501 Computer -- Major Processing Equipment,.
Rooml
RCA 501 Computer -- Input/Output Equipment,
. Room Z
40 Function Groups
Model Flow for Standard payroll
41
Model Flow Chart for Standard Payroll
4Z
(3 sheets)
Model Flow for Equipment Purchases
43
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I. INTRODUCTION
A. Peuypase
This is a, Status Study of tie data processing system of
the Deputy Director of Support (DD/S) as it relates to the RCA
501 Computer located in. the Automatic Data Processing Division
of the Office of the Comptroller. The major purpose of this study
is to answer several questions propounded by the. DD/S concerning
the a.dhievexnent of goals that were specified in previou..s Feasi"
bi.lity Studies made for the DD/So Another purpose is to provide
a status study followixig the first year of computer operation, The
Deputy Director wishes to know whether the objectives o- .tlined ire
the Management Staff Is Feasibility Studies (see Appendix .A~ have
.been, fulfilled with regard to the matters of reducing personnel and
saving money. It was upon the basis of the recoxn4rnenda.tfons of
the original Management Staff's studies that a computer was decided
upon and the RCA 501 coraputer was leased. It was intended that
this computer would -replace the IBM electric accotu?tir;ig machine
SEAM) facility then, in. ope,ra.tiono
The objective of this status study is not to prescribe an,
ideal system for the Agency nor to improve the present system. The
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major objectives of this relatively short investigation are to
delineate the present status and to maker.ecommendatlons for
solve most of the problem s
disclosed by this study.
2
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II. STATEMENT OF WORK
The statement of work for this systems study is as follows:
A. Scope-
1. Evaluate performance and progress of the EDP
(electronic data processing) system.
2. Determine present operating costs and good computer
time.
3. Report on and analyze the progress being made towards
the fulfillment of the original EDP concept.
4. A ess the likelihood of achieving a savings in man-
power, time, and equipment as originally conceived in the
feasibility study.
5. Report on the workload- -present and future.
6. A5 ess the effectiveness of scheduling activities.
B. Method of Analysis
1. Identify system and computer parameters.
2. Contact all levels of operation within the computing
system.
3. Contact the personnel who provide the computer input
or use computer output.
4. Obtain users' reactions to present operations.
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C. Reports
1. Report on the computer operations of the Automatic.
Data Processing Division
aw 2. Report the results of the systems analysis.
3. Recommend various courses of action.
4
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III? ADDITIONS TO STATEMENT OF WORK
This contractor, after initial investigation of the system, has decided
that it would be in the interests of this report to make certain additions
to the Statement of Work. These in no way change the Statement of Work.
The areas covered in these additions are listed in the Table of Contents
and include:
Section VII Model System
Section VIII Need for System Indoctrination
Appendix F Evolution of DD/S Computer System
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IV. DEFINITION OF SYSTEM
In this report, the term system includes the equipment in the
computer complex, the users of the computer (those who supply input
to-the computer as well as those who use the output of the computer),
and the operators of the computer. Since this computer is used to
provide support services to the entire Agency, almost everyone within
the Agency is a part of the system either as a generator of computer
information, a user of computer information, or one involved in equip-
ment ope rations.
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F. I
V. METHOD OF ANALYSIS
.The method of analysis used in this system study is specified
in section; II, Statement of Work. This method has been followed
throughout. . It is an approach. which.. provided for the obtaining and
digesting of the maximum amount of information.in the minimum
amount of. time. All levels of personnel were contacted within. the
major areas. of this study. All of these areas are within. the DDIS
(Deputy,Director', Support) and include the Office of the Comptroller,
.the Office of Personnel, and the Office of Logistics. The study was
made within four major areas. namely,. Accounting.(which.is sub-
divided. into Finance and Fiscal), Logistics, Payroll, and Personnel.
Ninety per cent of the, information was obtained through personal
contacts with people in these various areas. The remaining ten per
cent was obtained by mail. The method of personal interview proved
most valuable and, from the start,, a question and answer routine was
used, one question leading to another logical one. A formal question=
aire, prepared at the start of this study, was modified as necessary
during the course of the interviews. Questions were asked`throughout
the various. components, cross referenced, and. then verified in other
areas of that component or other components. Thus, within, a short
time,. it was possible to obtain cons istent.'information. It must be
realized in a study of any type, and especially in one of the complexity
of this,, that the inaccuracy of personal communications must be tales.
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into account. Therefore, it was especially important that information
be cross-checked.
The cooperation. of all concerned has..been much appreciated. It
was only through.the freely given opinions and statements and demon-
strations of operations that it was possible to achieve the results that
are discussed in the following sections.
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VI. PRESENT SYSTEM
A. Organization Charts
Figures 1 through-11 describe the organization of the office of the
DD/S in some depth, limited by security requirements and the-.problem
boundaries. These boundaries were -defined by. the electronic data pro-
cessing- requirements.. It can.be seen. from these charts that the organ-
ization structure is well defined on. the basis of general information . .
requirements for conducting Agency business, What is not evident from
these organization charts is the fact that certain functions overlap the
organization and therefore, responsibilities may not be well defined
in those areas or they maybe duplicated.
These functions are. listed in. Appendix C for comparision with tho
of the Model System described in section VII of this report.. A cursory
examination. will show that certain areas of information are handled in
two officcs_ but are really a single function, A particular example is the
handling of.the Deriodic step increase which is a payroll function but is
initiated by.the..Records and Services Division. of the Office of Personnel,
The Payroll Division. then makes the required pay adjustment. Similarly
r,rnv ~~cotln_ts__are handled by both the Office of Logistics and the
Finance-Division of the Office of the Comptroller.
It should be noted from Figure 6 that the Electric Accounting
Machine Branch and the Electronic Data Processing Branch are divided
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organizationally rather than by function. This kind of division permits
close liaison between the users and ADPD personnel. Internally, how-
ever, such a division for EDP personnel has limited the rate of program
conversion.. This has been evident from the fact that, although the Office
of Personnel has-been able to make a large amount of progress in putting
All its information processes on EDP, the Payroll Branch of the Fiscal
Division has had difficulty, although many information requirements of
the Records and Services Division of the Office of Personnel are identical
with those of the Payroll Branch. Cross-fertilization of methods .and
goals would be served more by.this functional approach and .similar
roblems would then be handled with greater ease,
B. System Flow Charts
Figures 12 through 37 identify. the paper work and information
processes., lumped under the general heading of systefnflow. Ref-
erence to these flow charts will enable management to determine the
present path of information flaw.
to Office of the Comptroller
The functions of the Office of the Comptroller.are listed in
Appendix Co These are. to a-large extent. similar to those of the
model system. A major exception, however, in this system. is
the division of accounting functions between the Fiscal and Finance
Divisions. This division of functions is an outgrowth of the
peculiar security requirements of the Agency. They are divided,
10
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generally speaking, so that. the Fiscal Division handles
.accounting information of a general business nature,. where-
as the Finance Division handles .the same accounting functions
for information of a specialized and security-oriented nature
In addition, the automatic data processing function...is.in
the Office of the Comptroller,. in accordance with the recom-
mendations of several of the. Management Staff studies .(Appen-
dix A)0
a. Finance Division
The Finance Division has a multiplicity of functions
which. can. .be. generally. labeled: payroll and accounting.
As indicated above, these functions are, generally, security
oriented. It should, however, be noted that all property
accounts are maintained by;the Finance Division, although
many property items. also show up in the Fiscal Division
Accounts Branch. records.
(1) Payroll
The, Compensation and Tax Accounts Branch of
the,Finance Division is responsible for the unvouchered
payroll: People are paid under several different 25X1
classifications. These break down.into staff, em-
11
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25X1
General Accounting
Figure 12 illustrates the flow of expenditur. e
accounting in the Accounts Branch of the Finance
Division. Its main. obliga.ti,on. is property account-
ing since all property accounts are controlled by
Finance for security purposes. . Additionally, its
.functions are those of a general accounting system
modified for security needs.
b. Fiscal Division
The Fiscal Division is concerned with vouchered
funds and is. subject to GAO audit. The Fiscal Division
responsibilities lie in the areas of payroll records and disc
bursernenta payment of invoices, and-accounting functions
controlling these responsibities,
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(1) Payroll
The payroll function for vouchered, funds is hand-
led by the Payroll Branch of this division. T,t is of
interest that the salary scale and. other personnel
fringe benefits, such as, retirement,. health, and
life insurance, conform Lo Oi.vll Service :a?'+ =tes,
Figure 1.5 illustrates the method of time and. attendance
recording and. ~iud.:`s:tin.g by the use of T and, A cards,
These T and A v.a.rd.s are di.strdbuRed. by the Payroll
Branch to T and. A clerks of the oper.at?.ng components
at the be. ginning of the pay period, The c I.e: r:k:s have the
responsibility of daily attendance and
leave records oh these. cards,
The T and. A ca:rd.s become the offic.>.al
record. for pay issue, . AU, T and. A cards musts in add-
iti.ona show the d os't rcenter .o which the individual ha s
cha*ged. hi.s time, This becomes the basis for cost
accounting with respect to personnel changes. Other
information, requirements of the Payroll Bra:n,ch are
shown in Figures l( and. 17, Thus, the Form 2150
Notification of Personnel Action is tran.smii't;ted from
the Office of Personnel to Pay.r'oll to inform Payroll.
about all changes in pay status of the individual, Of
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Excess sick leave. roster
5 4e e: ?1:.rme listing
60 Individual Earnings Record.
7. Individual Leave Record. by Pay Period
8, T anal. A card, listing
Figure 18 describes some of the problem areas
found in the Payroll Branch.
(2) General, Accounting
The auditing of bills and. payment exped.iti.u.g
for the Fiscal. Division are handled by the Claims
Branch. and. Fiscal. Processing Branch respectively,
particular interest is the fact that Personnel is
presently changed with initiating action .for the
Periodic Step Decrease because Payroll Branch
does not as -yet have e nou.gh information to under-
take this functior.i independently, This information
should eventually be made available to Payroll
filed
directly from a computer master
Some representative reports required. by the
Payroll. Branch area
1., Payroll roster by cost center
2. Military leave roster
3. Jury duty roster
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The Fiscal Processing Branch acts, in adds"
Lion, as a clearing house for mail inquiries anal.
paperwork routing for invoices, purchase orders,
and contracts. In addition, it has the responsibility
of initiating payment vouchers both for individual
payments (voucher abstract] and for batching
obligations on the Voucher axed Schedule of Payments
(Form fl66~ for transmittal to the Ali.sbra.rsia g.Bran- chi
Figure 22 shows the sequence of in.iti.ation of these
information items, their collation for auditing and
certification by the Cla;icros Branch, and their dec.oi-
lation for payment and. accounts pos-U.ng by, the Dis-
bursing Branch and, the Accounts Branch of the Fiscal
Division, respectively.
The Claims Branch is the invoice auditing branch
for the Fif.cal D v-ision0
it hand:? a s. all charges
except those for tra vel . Thee Claims Branch receives
the documents regarding an. obligation, from the
Fi.sca7. Processing Branch. These include the invoices,
the purchase order, voucher abstract, receipts, etc.
(Figures 19, .20,, 21.)o The Claims Branch checks
all. documents against the terms of the purchase order
or contract or purchase order, with respect to price,
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numbers of items, types and qualities as desi.gna-
. ted. in.the invoice and receiving documents.. The
Claims :Branch then enters on the contractor purchase
order,. the amount of the invoice, and the balance.
All papers are then sent back: to Fiscal Processing
Branch where they are listed by voucher number
on Form 11660.. This comes back to Claims Branch
for certification, . Fiscal Processing then relays` this
Voucher and Schedule of Payments, Where several
vouchers may be listed irrespective of payee, to
the Disbursing B r, a,nch.,
The number of voucher s. handled is recorded by
.each auditor on a dally inventory form which is totalled
at the end, of each week and summarized in.. the Claims
Branch Produ.ction.. Report. Additionally, the Claims
Branch has the :1?esprtns'bility to pay .,f4vo ces within
the allotted time required for .di.scou nt5ing, . At the
present time, the.-discount is lost in l5% of vouchers
because of the delay in".transmitting receiving documents
from warehouses. Two occagi.ons saw this :loss at
$350, and $500, respectively. The Disbursing Office
requires that vouchers be in its hands by 10 A. M.
the day proceeding the drawing of a check for paym :rit,
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Contracts are made with individuals as well as
business organizations. Whert these are completed,
the Claims Branch runs a tape on the total contract
and sends a notice of final payment (Form 183) to the
contracting offce. This tape run may be quite time
consuming since every invoice must be included.
Contracts with individuals present an, additional
problem in that no income tax is withheld and a Form
1099, U., S. Information, Return (tax) must be filed in
January. Thirty-.fou.r continuous hours are spent dur-
ing January typing. Form 1099. Ernd-of-year auditing
requires 131 hours, half of this must be accomplished
on, overtime. Thus, contract liquidation and balance
figures are now entered and totalled manually. This
job is particularly pressing in January and at the end
of the fiscal year because of the required number of
year end reports. Electronic data processing methods
are eminently applicable to the updating of contract
liquidation and balance figures. This information could
be made available in a periodic listing. Similarly, the
completion of the U. S. Information tax return, showing
income tax obligations of individuals now withheld, could
be accomplished by EDP.
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Other reports .of the Claims Branch area
(1) Record of Documents Destroyed
(2) Record of Paper Sent to Records Center
(3) Annual Report on ,Tort Claims (Public Law
79-601)
(4) Grants for Scientific Research
The forms list shows other reports which are
self - explanatory
The Fiscal Division's Accounts Branch open
ations are similar -to a general government agency
accounting function. It is charged with.the main-
tenance of allotment accounts and expenditures 1
object class. Its ledgers are divided by allotment
number and cost centers. Cost centers are used
.for charging of property, material,and personnel
costs to a budgetary allotment- They are sub-
accounts of allotments. Most of the Accounts
Branch. information processes -are manual. Among
the reports.it is responsible fore and which are made
up by electric accounting r .a?chine methods, are.
(1) ` Unliqu.idated :Obligations Summary by
Object Class
(2.) Report of Allotments, Obligations and
.Expenditures ,by Object Class
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y3) Form 17339 General Subsidiary Ledger--
Summary of all payment vouchers -_1i.dited
and approved for payment.
I* s allotmennt.ledger cards are made up on a
National Cash:Register bookkeeping machine. It
handles 275 cost center accounts, each cost center
ledger is three to four page long. Allottees receive
a copy of each allotment ledger she et.
co Automatic Data Processing Division
(1)
Electric Accounting Machine Processing, Branch
This is the IBM card-based automatic account;
system whose responsibility it has been to meet Agency
requirements for all types of accounting and statistical
operating reports and documents. As .indicated by its
organization chart, it-has responsibilities to all offices
of the Deputy Director (Support). The flow of infor-
mation and its processing (sorting, collation, arithmetic
procedures) are illustrated in Figures 23 through. 31
These are exemplary rather than: comprehensive,
The programs and sequencing.of operations for
the 501 have been based upon those already in use in
the EAM procedures, in many cases. In some areas
.such as Fiscal Payroll and Personnel Qualifications
Records, this one-to.-one conversion philosophy has
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not worked out satisfactorily.
(2). Electronic Data Processing Division
The RCA 501 Computer System. was, installed
October, 1960. It was ready for operation by March,
1961. Almost all programming was done. by ADPD
personnel with some assistance from RCA repre
sentativea. There is one RCA programmer assigned.
to assist ADPD at the Central. Building. Stock programs
from RCA have been limited mostly. to service. routines.
No compiler program has been` d. It is, however,
expected that Cobol will be.used exclusively in the
future. ' The present programs are satisfying. Agency
requirements in a limited way. They are mainly.non.
optional programs converted directly from the EAM
system (see above). It is expected that these pro-
grams. will be. reworked,. using-Cobol. The conversion
from. EAM to EDP has not been c-ompleted.
No attempt has. been made to determine whether
,present. listings and programs can: be reduced. in. volume
because of duplication.. of information. It has been
mentioned above that the EDP Branch is organized so
that its programmers are grouped according to re-
spons.ibility,,to a particularuser rather than an infor-
mation requirement. Much information required for
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the Office of Personnel, for .exa mplep . is also required
for payroll processing; yet. each office uses. programs
entirely; independent of the other. Similarly, Finance
Accounts records .are dependent to a.large extent upon
transactions of the Office of Logistic-a9: ande therefore,
there should be-the closest coordinatioia._of programming
effort between members of EDP assigned to do their
work.
Computer time is now divided_on_a 60-40 basis
with.the major part going into production runs and the
remainder into debugging of new programs. The service
of the 501 c:omputer and peripheral equipment has not
been satisfactory. The computer- mainframe does ha'ie
an excellent record for reliability. The peripheral
equipment has been .troublesome. The Model 527
Printer and Model 538 Card Punch,. although used
infrequently, develop trouble while a job,. as running
or at the time it is-tested before running.
Master records are now maintained on magnetic
tape where programs :have already been converted from
EAM to EDP.. The fixed .8O-column, card format can be
modified because the. tapepper?mits use of. variable-data-
length recording,.
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The Payroll Branch of EDPD handles two types
of payroll: Payroll I for overt members of the ' staff,
Payroll II for covert people.
There are additional payroll listings. which
..include: Contract payroll, tax-listings, deduction
.listings,'and Individual Earnings Records listings.
EDP personnel state that payroll processing time
is doubled by the need for allotment number listing
and processing for the Individual Earnings 'Record
master file.
The :total: computer running time for October
was. 330.hours, of which 55 were used by the Automatic
Data. Processing Staff. The standard month is.200
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hours., Computer output is destined to increase
although computer time z equirements may, fluctuate
depending on the increase in program. ef#:ic.A,ency-
expected to result from the efforts under Phase-l1..
It should be: noted that the ADPS. requirement for
55:.hours only appears quarterly.
As for. the increase of computer output,
certain.items required for payroll control are now
done manually, but will later go on, EDP. Pay this
Period,, cancelled.check reports,, Periodic Step Increase
Information are examples of the control information
that will go on EDP.. An additio l payroll will be put
on in about six to eight.xnonths_o It:involves exceptions
to Payrolls1 and 11 and two types of checks. In :addat
an Individual Earnings Record. listing may, be required
monthly.
20 Office of Personnel
Only two units of the Office of Personnel were covered
on.:this survey. These are the Records and Services Division
and the Qualifications Analysis Branch of the Personnel Operm
atious ,Division. Figures 31 through 34 are representative
illustrations .of the flow of personnel information in the Records
and Services Division. Appex',dix C lists .thefunctions of the
Office of Personnel.
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Records and Services Division
The Office of Personnel is responsible for more thin
107 .different reports of varied frequency and length. ThEi
most widely, distributed report is. the Position Coni-rol
Register (Figure 34) which is printed monthly by the
Records and Services Division for the Deputy :Director /Plans
only. Thirteen copies of this report are distributed quarterly
to the other administrative offices. The source -inform ,6,4.on
is.tak.en.from Form 1.150, Notification of Personnel A
which accompanies all changes of personnel status and
Form 2.61 which contains. informa.tionabout the Job and
,table of organization andis initiated by the Salary, and.: Wage
Division.
The Posi.tion..Control Register is a,highly useful docu-
m.ent4 It is used extensively, as. a personnel inventory
pl .ce of other qualifications records. that must be retrieved
manually at present. Form 1152,. Request for Personnel
Action, . is often initiated onthe basic, of the information
in the Position Control Register.
The Position Control Register is also.used,to measure
the average grade in an .organization for 'budgetary and
classification control purposes.. If a reorganization is
,undertaken, the practice is to .maintain the average grade
of the personnel of the component.. Similarly, controls
28
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.ar.e kept on promotions by maintaining the average grade
of a particular job classification and also. the average
grade of an administrative unit
Most of they other reports are used for compiling
statistics and providing analyses of applicant
nd personnel
distribution for purposes of planning recruiting drivesv
evaluating average personnel costs, planning replacements
for people slated-to retire, averaging grades for re-
organization control, supporting Career Services functions,
control of promotions, and many, other job and personnel
requirements Examples of other types of reports used
by; the Office of Personnel-
Separation Roster m monthly by office and alphabetical)
Promotion, quarterly and summary report by offc?e.
Yearly Medical Examination,Roster .(all grades abo- f
12 are examined)
Periodic. Step 1m rease Roster
Entrance on Duty
Alphabeticl listing monthly
.By, Office, alphabetical
Quarterly, tabulation by Career Service
Terminations - by job Qnot distributed)
Semi-annual Total History Report. _, each.individua-
listed showing age, promotion history, career
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service, office
Summary Reports.-'Agency gains and losses
Figures 27 and 28 .illustrate- how these reports .have
:been .compiled by the EAM Branch .of ADPDO .
The Records and Services Division has been very
successful in its c=vers:lon program from.EAM to EDP,.
The greatest difficulty. encountered in the .u, se of EDP.
methods has been the unnsatsfac.tory.periorm,arnce of thr;
printer for the 5.01 System.
,re generally
Pere onr el lists are'
voluminous, . having many columns
cross. the page. The
printer has provided copy in very,poor. register so.that
lines across the page are very wavy making it exceedingly,
difficult to re.,id the The Records and Services
Division has had to abstract information from these list-,
ingsa . o.r :r.? type whole sections in or-der.. to provide the
:information,to. us ers in a useful condition.. Additionally,
Personnel uses. these listings to formulate and write
analyses of personnel trends and problems for planning
purposes4
At the present tlmea the 501 is. at the Cents tl. Bu id.'ng
while the 'de collator is at C :c 17:?dla Two, days are lost
having. henrn. t ?ar.sfer:red between Ce:ntralp
finally the p,cy's new maixn_baulclin where the Records
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and Services Division.is located.
Among the responsibiln.ties of the Office of Personnel
ia..the reimbursement of Department of Defense for military
personnel assigned to the Agency. The rn ilitaryy c:crrnpl.e-
ment :is paid by ,the Department. of Defense.
Promotions for Career Service Personnel (Figure 33)
and position. status changes are controlled by .the Career
Services Staffing Autho:rizatiiono Controls are kept on
promotions by the average grade of a-job and average
grade in an. opeiating division. In -the case of unit
reorganization, the average grads in the unit is m .in-
ta.inedo Although estimates differs, the. Personnel Records
and Services Division estimates ,that the-average turnover 25X1
in the Agency, including, professionna people is
of the Agency strength, Clerical turnover i sP however,
.
about
There are still certain information bottlenecks which
have not been surmounted, The date of PCS is not yet
available. Listing by employee serial number has not
been programmed get.
25X1 C
.funds. This is, however,, a matter of record in the
Financial Division of the Comptroller' F, Office but is not
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available for di.strn,butlon0
.b9 Qualifications An~a~lysn s Branch
The most imporlaz -. and seusW,ve information avail-
able to Agency r-.dm na ,t:~?atio,rn .v s a.tts~ Iviowledge of avail.-
able personnel capabil,A.es. Yet this informa-d-02n is -not
centrally controlled. it ispresen Jty?handled on, an organi..
national component level because these component:', ; -.vvc
formerly ,foundthat persons hava~...g 4esired qualifications
for a specific job which had to be filled on short notice
could not be called from the central files ?Thi -i su_f-
ficiency was -caused prima.dl.y by the inability of the
Qualifications Analysis .Brna.nch of the Office of Personnel
to cover a sufficient number of descriptive co-Aegerierm.
The Qualifications Analysis B anch .has submitted a,
proposal for a complete system redesign of the method of
recording, storing and rretr-lev:ii g tha;-ee records of per-
sonnel. with desired q.ia:l. _fic?aaa,..fien,s at short not ceS It. is
essentially,a coding ym5tem which mr~.,,y. be programmed
for computer eearc..h.arnd which permits a vast expansion
.of the number of descj?iptive elements available for
evaluation of the background and experience of each
individual.
There appear to be two. immediate. problems with
6)
regard to the p,roposaa.l0 The first is the completions of
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biographical profiles of all personnel. The second is
the design of the retrieval system. The coding system
has.. already. been devised which would permit the storage
of the biographical information on magnetic tape. It
would also permit setting up a -manual filing andretrieval
system. based upon edge markings compatible with the pro-
posed coding system.
The completion of the biographical profiles. is a matter
of organization.actiona The development of a retrieval
system for personnel selection is a matter of. design
choice. The latter may be accomplished in a number of
ways depending upon several factors such as availabili
of the-computer at short notice;, the number of qualifi-
cations.to b.e stared and examined, . acceptable methods
of record storage and others.. One.method may. employ
the 501 computer. In -this design,. the individual. and his
record card are identified by number and his qualifications
by, a_computer readable code and.,the record is stored on
magnetic tape. Coded qualification: requirements are
then entered into the computer for matching with those on
the tape record. Employees are selected by number ,nd
matching codes.. The present -proposal put,forth by the
cualfications Analysis Branch would proceed to p- = at,
from computer stored information,. the complete quali-
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A' fication. records of individuals so selected.. Presumably
printing would be done off line. That is, first a magnetic
tape file would be made containing the whole record; the
tape then removed fromthe computer,. freeing it for other
,Q 6!,ee60 aF work and put on an_off-line printer.
,PFi9CZ i' , The use of a flexowriter to p#nt out a biographical
v(
X,fAL
record m', however, be excessively cumbersome. for
this type of job, since the biographic record may be
several pages long. In addition, the storage of a complete
biographical record on each employee would require
approximately. six reels of magnetic tape although. the
coded data for searching could probably, go on._a single
reel. An alternate method of performing the same function
would be to use the biographical profile itself as a master
copy. The computer then need only.print out a list of
names or employee serial numbers to, indicate which
biographical profiles will have the desired qualifications.
The biographical profile, original or xerox master, is then
pulled for duplication and returned to the master file.
There are several systems which-may be applied to
the selection of personnel by coded qualification record
that do not require computer handling..
Coding and selection may be done by theuse of edge
punched cards o The longer .biographical profile containing
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the complete dossier is here also, kept. in.a master..file.
The items used for selection .purposes .are encoded or
listed on.a card and, the edges :punched. so thatsby, the use
of a needle, selections can be made accordi.ng,to any list
of requirements. Royal McBee Keysort is the classical
example of this procedure.
The Peekaboo System _is another non-machine method
which lends:itse.lf well to selection by:requir?ements.
the Peekaboo System; a card is coded for up to 10, 000
numbers, which may, represent each of 10, 000 employees.
.Each specialty, requirement, or descriptive item is
represented by one of these cards. Each employee who
can,be described from his biographical, profile by the
particular specialty or other descriptive item is then
shown.on: the card by, a punch out hole on one of the
?10,.000 slots corresponding to thee- employee or his number.
When people of a particular trait or. background. are re-
quired, the card showing this.background is placed against
a light box., All pe:r.sons:havirAg this requirement are then
picked out by the position.of the light passed by the holes.
If more than.10, 000 employees are listed, a second card
for each -requirement is made and searched. As. the
employees meeting the requirement are identified, the
biographical profile is pulled from the master file for
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duplication and distribution. The original is returned
-directly to the file.
Although .the 501 is available, it is presently over-
loaded; and it would appear that some time will elapse
before the Personnel Qualifications Record Program
could be put in working order. Thus, time is presently
,available for a more thorough examination of -the usefulness
of the computer.. in.this problem. The total number of
employee or consultant records. in the files, the number of
requirements that are to -be placed against. the selection
process, and the number of selectee-s. that are expected
f om. the file during any search should be considered.. The
one particular. problem. which a, manual system will obviate
is scheduling. A request for selection of possible incum-
bents-to. fill the requirement may, if necessary, be acted
upon immediately in the manual system. The computer-
based system, because of its limited access and channel-
ing, would probably require special. scheduling, program
loading, and other special processes, including tape
encoding. This delay,may not be a-problem if immediate
information is not often. required. Instituting a manual
selection method would probably. not be any more expensive
than programming. On the other. hand, A he handling of
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master..files. manually m.ay;not:be desirable because of
possible loss or misfiling of individual records., which
.would not happen to.a magnetic tape file record
Of paramount importance, howeveri . is the number
Jand. kind of summary reports and listings that-might:be
required from the qualification record file. A manual
system.does not lend itself to the sorting and accumulation
of list information in a way, thata computer does. Periodic
listings of employee population characteristics. and. fre-
quency, summary. information. regarding turnover of
people with certain. specialties,, summary, information of
talents available to the Agency, would all.be done beet by
machine, computer listing. If such listings must come out
hen manual methods 25X1
may be excessively cumbersome and the use of the computer
highly :desirable.
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3. Office of Logistics
The functions of the Office of Logistics are listed
in Appendix C. The Supply Division represented the only
area of interest to this report. Its most important document
produced by the EDP system is the Stock Status Report,
a. Supply Division
The Supply Division requires immediate
information of stock status in response to inqui ri e s
and requirements which are always coming in through
all channels of communication. At present, the Stock
Status Report is listed monthly by the Electronic Data
Processing Division, The list is updated manually
during the month so that immediate status information
is available upon request. The list consists of 56, 000
lines, and spaces are left between. line items to per-
mit manual posting for inventory updating. (See "Depot
Stock Control Branch Procedures" Section I Chapter 5
Procedures for. Maintenance of the Stock Record Account, )
Changes in physical inventory are a. result of
requisitioning, procurement or adjustment. The flow
for accomplishing these basic functions is shown in
Figures 35, 36 and 37. Changes in. the recorded'inven-
tory may take as many different forms as there are
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codes in the code book; These may be changes of
nomenclature, condition. code, ste rlization. code,
expendability, unit price, packaging code, procure-
ment code, traceability code, accountability, etc.
Figures 29 and 30 illustrate Electric Accounting
Machine Division procedures for adjusting and up-
dating the master file.
Nine copies of the Stock Status Report are
printed. Each copy contains 6, 000 pages. The only
copy which is updated is that of the stock analyst.
All other copies are incorrect with respect to any
item which has been requisitioned, replenished or
adjusted at any time after the monthly printing.
Inquiries are made to the Chief's office of the Office
of Logistics. and that of the Supply Division, in both
of which these monthly copies are kept. Reference
to these copies can be made only for administrative
information. Stock status information must be
referred by either of these offices to the stock analyst.
Another problem in the use of the Stock Status
Report is its bulk and the delay caused by the manual
search process. Since all stock information is even-
tually put on IBM cards, it is justifiable to look at
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these IBM cards with regard to actually using them
for stock status recording and information at the
stock analyst's desk. This is an application of unit
record keeping. All items against which trans-
actions are recorded during a day could be separated
for repunching and machine record updating. If the
number of transactions per day is limited, the inter-
filing of cards could be done manually. In this way,
the cards would daily represent a master file from
which the latest sto.ck status report could be printed
at prescribed intervals. If the volume of transactions
is such that it is not feasible to interfile manually, the
whole file of 50, 000 cards could be passed for sorting
and collating by machine methods. This however, would
consume 3-1 / 2 to 4 hours. The frequency of repunch-
ing of cards could then be reduced and manual updating
of card$ could be accomplished as at present. Again,
at any time a new list is required, only the cards for
which transactions have been made need be repunched,
followed by punching of the entire file.
The management report for the acquisition of
the IBM computer identifies many areas of the Office
of Logistics procedures and reports which can be
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modified. No doubt some of these changes have
already been made. DMJM?s review of this report
is found in Appendix A.
b. Inspection and Inventory Branch
In addition to its inventory responsibilities,
(see Figure 37) the Inspection and Inventory Branch of
the Supply Division conducts the internal audit of Supply
Division procedures. It reviews regulations, instru-
ctions and responsibilities of the various units of the
Supply Division. It is responsible for identifying
problem areas by personal interview methods and
preparing Supply Division instructions to correct
procedures. In this function, the Inspection and
Inventory Branch acts in a staff capacity responsible
directly to the Chief of the Office of Logistics.
41
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C. Equipment
The following list is of the equipment leased by the
Automatic Data Processing Division. The electronic data
processing equipment is located in Central Building and the
electric accounting machine equipment is located in Curie
Hall. Figures 38 and 39 show the EDP equipment in Rooms
I and 2 of Central Building. It is planned to move the' EAM
equipment to the Administration Building within the near
future.
Model No.
503
561-2
ELECTRONIC DATA PROCESSING MACHINES
(RCA)
Description
Quantity
Computer
Hi Speed Storage (32, 768) Memory Locations I
581 Tape Station
535 Electro Mechanical Printer
527 Card Punch
538 Card Punch
547 - 6 Tape Switching Unit
525 Tapewriter Verifier
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ELECTRIC ACCOUNTING MACHINES
(IBM)
Model N
Description
Quantity
024
Alphabetical Punch
12
OZ6
Alphabetical Printing Punch
1
056
Alphabetical Verifier
8
087
Collator
1
085
Collator
5
089
Collator (Alphabetical)
1
083
Sorter
4
514
Reproducing Punch
4
552
Interpreter
1
556
Interpreter
1
407
Accounting Machine
3
408
Accounting Machine
2
416
Accounting Machine
1
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VII. MODEL SYSTEM
A. Management's Role
Management is the art and science of planning, organizing9 and
controlling human effort. to achieve useful ends. Management proper
is a function concerned with the execution of policy within. the.limits
set up by administration, and the employment of. the. organization for
the particular objects set before it. Organization is defined as the
division of work to be done.into separate tasks and the assignment
of these tasks. to individuals qualified by training and natural charac-
teristicsfor their efficient accomplishment.
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B. Functional. Groups
1. Description
An organization. of the governmental. support type
may he divided into three principal functional. groups:
Financial, Personnel, and Supply. There is, in addition,
a fourth group, Support Services, that performs those.
functions which are not assignable to the three principal
groups. These four groups are shown in Figure 40.
The Financial Group provides the basic functions
of accounting, auditing, budgeting, contracts adminis-
tration, and disbursing. These functions are divided into
additional categories in. the cases of accounting and
auditing. The individual. functions in the Financial Group,
as well as in the other groups, are defined in the next
section,
The Personnel. Group performs those functions
which concern the relationship between the employees
and the organization.
The Supply Group provides functions that relate
mainly to the acquisition, storage, movement, and
control of materials, supplies, and equipment.
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The Support Services Group provides functions of
a staff nature and also those functions that relate to the
three principal functional groups.
A fifth group, Data Processing, furnishes data
processing services to the three principal functional
groups:. Financial, Personnel, and Supply. Owing to
the need for providing relatively comparable services
to these three groups, it is essential that they be
separated organizationally from the Data Processing
Group.
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2. Definitions
The various functions that are generally performed in
a model governmental support organization have been defined
in the following list.
a. Financial Functions
Accounts Payable--The recording of liabilities
created through the purchase of equipment, materials
supplies, and services received on account; the
setting up of the proper charge upon receipt of the
goods or services; and the verification of the corres-
ponding invoice.
Accounts Receivable--The recording of assets
created through claims arising from delivery of goods
or rendering of services.
Auditing--The examination of accounting records
to verify their accuracy and conformity with accounting
practices and policy; the reporting of the findings of
that examination to management together with recom-
mendations for corrective action on disclosed defi-
ciencies.
Budgeting--The assembling of a comprehensive
financial statement which includes the anticipated
revenue and the estimated amount of expenditures
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required to conduct the various activities and functions
of the company or agency for a specified period of
time or a specific project.
Contracts Administration--The supervision of
agreements made by the company or agency with
outside contractors to insure that the terms of the
agreement are satisfied; that the contractor adheres
to established cost principles in performance of the
contract; and that property resulting from, and/or
furnished as a result of, the agreement is properly
protected and accounted for.
Cost Accounting--The assembling and recording
of all elements of costs incurred to accomplish a
purposes to carry on an activity or operation, or to
complete a unit of work or a specific job.
Disbursing--The preparation of payroll and
accounts payable checks, the safeguarding of funds.
External Auditing- -The auditing. of the accounts.
of a particular group (e.g., Financial) by personnel
belonging to another group (e.g., Personnel).
G. A. 0. Auditing--The auditing of a company
or agency by the General Accounting Office through
the use of either: (1) a comprehensive audit, which
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involves an analytical and critical examination of a
company or agency and its activities, or. (2) an
other-site audit, which involves an examination of
the accounts and records of a company or agency at
the place or places where those accounts and records
are normally kept.
General Accounting--The assembling and
recording of transactions that pertain to such matters
as cash,'investments, appropriations, and funds,
which are not handled by the other functional financial
groups; the co-ordination and assembling of all
accounting data for incorporation into the company's
or agency's financial statements; and the overall
direction of the financial functions with respect to
accounting policy, uniformity of practices and methods,
and relations with other groups.
Internal Auditing--The auditing of accounts of
a particular group (e.g., Financial) by personnel
belonging to that group.
Material Accounting--The determination and
recording of the monetary value of such items as
materials, goods, and supplies that are contained
in inventory.
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Property Accounting--The assembling and
recording of the monetary transactions which concern
land, buildings, equipment, furniture, vehicles and
like items; the maintaining of records covering the
acquisition, depreciation, transfer, maintenance
expenses, and retirement of this property.
Special Payroll--The keeping of records which
list the salaries or wages due personnel that are
employed under non- standard conditions, with location
and pay periods subject to irregularity, and the. deduc-
tions chargeable against those salaries or wages .
Standard Payroll--The keeping of records which
list the salaries or wages due personnel that are
employed under standard conditions of regularity of
pay period and working location and the deductions
chargeable against those salaries or wages.
Technical:Accounting?-Specialized accounting
that is a function of the particular company or agency
involved.
b. Personnel Functions
Career Services--The assembling and recording
of the qualifications of employees for various types of
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activities and the choice of the best qualified among the
employees available for a specific activity or activities.
Employee Awards--The assembling and recording
of data on the suggestions of employees, the patents
pending or granted to employees, and meritorious
service of employees.
Personnel Administration--The general super-
vision and planning of all, personnel functions, the
formulation of employee policies, the conducting
or supervision of exit interviews, the provision of
employee services and communications, the con-
ducting of employee- relations research, and the
supervision of the retirement plan.
Health and Safety--The assembling, analysis,
and recording of data on employee accidents and
illnesses, the providing of personal protective devices,
the development and maintenance of safeguards for all
machinery and equipment, and the supervision of a
health and safety program.
Job Evaluation--The accurate description of jobs,
the analysis and weighing of the factors required to
perform the jobs satisfactorily, the conducting of wage
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and salary surveys, and the assembling and recording
of this information.
Leave--The collection and recording of infor-
mation regarding annual, sick, and home leave of
employees.
Manpower Estimates--The determination of
the total number of personnel for each of the various
job descriptions that will be required to accomplish
the assigned work task during a specified future time
period.
Merit Rating--The evaluation and recording of
the effort and performance of each individual
employee on his job, the analysis of this information.
Personnel Records--The maintenance of
records pertaining to such matters as pay rate and
occupation changes, promotions or demotions, trans-
fers, termination, deductions from pay, leave, health,
accidents, and absences for present and former
employees; also, the maintenance of records concerning
applicants and the retirement plan.
Recruiting--The contacting of prospective
employees by various means for the purpose of
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providing a supply of applicants from which employees
may be selected.
Security- The safeguarding of classified infor-
mation to prevent its acquisition by unauthorized
personnel, the processing of employee clearances,
and the supervision of the destruction of all obsolete
classified documents and all other classified waste
material.
Selection and Placement--The interviewing and
screening of applicants for job openings, the selection
of the best qualified applicants for those openings, and
the assembling and recording of information concerning
these matters.
Training The offering of in-company classes
for employees, the supervision of apprentices, the
maintaining of liaison with local universities and
schools that provide advanced courses and cultural
courses, the advising on courses and help in regis-
tration for courses, and the keeping of records on
employee progress in courses.
Transfers-,-The changing of job status and/or
location for employees, and the assembling and
recording of information regarding such changes.
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Travel,--The gathering of information on trans-
portation to, and housing in, travel areas of interest;
the arranging of business trips for employees; and the
obtaining of transportation to, and housing accommo-
dations in, specific locations.
c. Supply Functions
Cataloging--The collecting and filing of catalogs
and other product and vendor information to enable
later retrieval when required by using personnel.
Inspection--The visual examination of materials
and equipment to insure their adequacy or quality with
respect to specifications or other descriptive literature
and the recording of the results of those examinations.
Inventory Control--The preparing, communi-
cating, accumulating, and summarizing of information
concerning a large number of daily occurrences affect-
ing actual and planned inventory balances; the main-
taining of quantitative, descriptive, and procurement
data regarding each inventory item, and the manipu-
lating, correlating, and review of the above information
as the basis for making inventory decisions and taking
the required action; the handling and storage of supplies,
materials, and equipment in stock.
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Packing--The preparation of materials and equip-
ment for shipment, the use of protective methods for
insuring safe delivery of the materials and equipment,
and the repackaging of materials and equipment when
required.
Product Testing--The testing of materials and
equipment to insure their adequacy or quality with
respect to specifications or other descriptive literature
and the recording of the results of the tests.
Purchasing--The translation of purchase requi-
sitions into purchase orders by the process of endeav-
oring to obtain the specified items, of suitable quality,
on or before their required delivery date at the best
possible price; the submission of requests for price
quotations to several vendors in the case of compe-
titive items, the supplying of aid in the selection of the
vendor in this case, and finally the authorization of
purchase.
Quality Control--The determination of the
standards by.which materials and equipment should
be tested and evaluated; the development, selection,
and distribution of statistical methods for insuring that
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the quality of the materials and equipment being
tested is adequate.
Receiving--The receipt of incoming materials
and equipment, the checking of quantities received
with respect to quantities ordered, and the recording
of appropriate specified data concerning incoming
materials and equipment.
Shipping--The gathering of information
regarding available transportation services, the
location and obtaining of transportation when and as
necessary to permit the movement of materials and
equipment to desired destinations, and the keeping
of records pertaining to such movement of materials
and equipment.
Space Utilization?The planning for the total
future required work area and the optimum division
of that total area into individual work spaces.
Technical Support--The provision of specialized
engineering guidance and assistance as required, the
repair and preventive maintenance of all technical
equipment.
Transportation- -The provision and maintenance
of an operating supply of vehicles, and the scheduling
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of the efficient usage of these vehicles.
Vendor Qualification- - The determination of the
financial, technical, and production aspects of a vendor's
ability to deliver a product of required quality by a
required date.
d. Support Services Functions
Communications--The providing of all necessary
types of communications services as required for the
efficient performance of the company's tasks, the main-
tenance and up-dating of the inter-office telephone
directory and other company communications direc-
tories, and the arranging for and coordinating of the
maintenance of the company's communications equip-
ment.
Grounds and Buildings--The maintaining.of
grounds and buildings in optimum condition, the altera-
tion of grounds and buildings as required, and the
arranging for and supervising of all maintenance and
alterations that are performed by outside vendors on
the company's grounds and buildings.
Legal--The review and analysis, and the approval
of the form, of all legal documents which concern the
company, the providing of assistance to the Contracts
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Administration Group in the' preparation of contracts
with vendors, the handling of legal matters concerning
the company's operation with other parties, and the
establishment of policies and procedures that insure
that expenditures of funds are legally correct.
Mail Room--The receipt and distribution of
all incoming mail, the preparation and dispatch of
all outgoing mail, and the delivery of inter-office
mail, all of the above in accordance with security
procedures where applicable.
Maintenance--The repair and preventive
maintenance of all machinery, equipment (other than
technical), and furniture; the recording of the main-
tenance history of all machinery and equipment; the
acquisition and stocking of repair parts and materials;
and the arrangement for and coordination of all
repair and maintenance that is required to be per-
formed by outside vendors.
Medical--The physical examination of potential
new employees, the physical examination of employees
working on hazardous occupations, the periodic exami-
nation of all employees, the operation and maintenance
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of all first aid facilities, and the provision of an
advisory service to the Health and Safety Group.
Plant Security--The protection of company
property from fire, theft, and damage; the pre-
vention of unauthorized entry of persons to restricted
company buildings and facilities.
Records Management--The provision and main-
tenance of a filing and storage system that safeguards
all records against loss, fire, theft, or damage; the
administration and supervision of the periodic disposal
of all obsolete records.
Reproduction- -The procurement, operation, and
maintenance of all necessary reproducing and printing
equipment; the provision of photographic services as
required.
Technical--The providing of specialized technical
advice, guidance, and assistance as required by other
groups to enable these groups to properly perform
their functions.
e. Data Processing Functions
. Timekeeping--The distribution and collection of
attendance cards (and labor cards, if used); the sense-
marking of exceptions to regular attendance; and the
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sense-marking of time spent by employees on their
various job numbers.
Programming--The preparation of programs as
required for the timely and efficient production of
output data by the electronic data processor.
Processor Operating Group--The operation of
the electronic data processor; the printing and issuing
of registers, records, reports, and pay checks; and
the handling and protection of punched card and mag-
netic tape records.
Card Processing Group--The key punching and
verifying of punched cards; the operation of all
punched card machines exclusive of the electronic
data.processor.
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C. Information Flow
If information is to be processed effectively and efficiently in
any organization,. it is necessary.first to arrange for its proper flow.
For each individual application,. such as standard payroll or equip-
ment purchases, this flow will occur both.between groups and within
groups. A separate flow chart should be prepared for. each of these
two cases. In addition to the flow charts, there should also be a
written description of the information flow sequence. With this
combined information it is possible to analyze the flow to determine
if duplication of purpose, procedure, or forms exists and. if improved
or more appropriate equipment. can be used.to process the data.
Two. applications, standard payroll and equipment purchases,
have been analyzed in. this report.
1 o Standard Payroll
The model information. flow sequence for standard
payroll is described in detail. on.the following pages. The
model flow for standard payroll, Figure 41, shows the paths
of information flow between groups. The model flow chart
for standard payroll, Figure 42, indicates by solid line the
flow of work within the Data Processing Group. The transfer
of information is shown by dashed line.
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MODEL INFORMATION FLOW SEQUENCE
FOR STANDARD PAYROLL
1. The Card Processing Group receives data from Personnel
Records and card punches (on a printing card punch) and verifies
a master payroll card for each employee, listing all information
that should appear on each of his daily attendance cards: department
number, employee number, and name, and other data such as social
security number, title, grade, withholding exemption, and pay rate,
that is necessary in preparing the payroll and individual pay record
cards.
2. The Card Processing Group card punches and verifies a
spread deduction card for each employee, listing the employee number,
name, and his various deductions.
3. The Card Processing Group sorts the master payroll cards,
first, in order of department number and, second, in order of employee
number.
4. The Processor Operating Group places the sorted master
payroll cards in the card reader.
5. A master payroll tape is produced by the data processor.
6. The Card Processing Group sorts the spread deduction cards,
first, in order of department number and, second, in order of employee
number .
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7. The Processor Operating Group places the sorted spread
deduction cards in the card reader.
8. A year-to-date and deductions tape is produced by the data
processor. Sufficient space is reserved on the tape after each
employee number to allow the inclusion of the employee's current
earnings and year-to-date pay record.
9. The Card Processing Group prepunches the daily attendance
cards with department number, employee number, and name, obtaining
this data from the. master payroll cards. A reproducing punch is
used for this operation.
10. The Timekeeping Group distributes these attendance
cards to card racks in the various areas.
11 The employee fills out his attendance card daily, listing
total time, job numbers on which he works, and time spent on
each job number. This data may be recorded on the card by means
of a time clock if desired.
12. An alternative method is to separate the attendance data
from the job number data by recording each set of this data on
separate cards: attendance cards and labor cards.
13. Attendance cards (and labor cards, if used) are collected
by the Timekeeping Group.
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14. The Timekeeping Group sense-marks on each attendance
(or labor) card the job numbers, and the time spent on each of the
job numbers. (This data is used for labor distribution but not for
standard payroll.)
15. The sense-marked information is mark-sense punchled
into the cards by the Card Processing Group.
16. Department managers report to the Leave Group and the
Timekeeping Group regarding the periods of annual leave, sick
leave, and home leave of their employees.
17. The Timekeeping Group reviews all attendance cards for
lateness, sickness, overtime, vacation, or leave.
18. Either when attendance cards alone are used or when both
attendance and labor cards are used, the Timekeeping Group will
sense-mark on the attendance cards any exceptions from regular
attendance.
19. The sense-marked information is mark-sense punched
into the exception attendance cards by the Card Processing Group.
20. The Transfers Group supplies the Standard Payroll Group
with a copy of the payroll change slip for cases where the job
status and/or location have changed for an employee.
21. The Personnel Administration Group supplies the Standard
Payroll Group with a copy of the payroll change slip for all employee
terminations.
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22. In all cases when payroll change slips are issued, the
original is sent to the Standard Payroll Group, one copy is given to
the employee with his pay check, one copy is sent to the Personnel
Records Group for filing in the employee's personnel folder, and
one copy is sent to the Disbursing Group. The Disbursing Group
copy is required where a new location is involved for an employee,
thus necessitating the preparation of a new addressograph plate.
23. The Standard Payroll Group reviews and authenticates
the payroll change slip and sense-marks on a transfer-out finder card
the employee number, his old and new job status and/or his old and
new department (or location). (The finder card will locate on the
magnetic tape the employee record that is to be changed and cause
that complete employee record on tape to be punched into a card.)
24. In the case of terminations, the Standard Payroll Group
reviews and authenticates the payroll change slip and sense-marks
on a transfer-out finder card the employee number, his job status,
his department and a termination coding.
25. The transfer-out finder card is mark-sense punched by
the Card Processing Group.
26. The Job Evaluation Group supplies Personnel Adminis-
tration with information regarding recommendations for pay rate
changes that result from wage and salary surveys.
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27. Personnel Administration advises the Standard Payroll
Group concerning blanket changes in pay rates that should occur as
a result of legislation or surveys.
28. Employees are rated periodically on sense-marked
merit-rating cards for effort and performance by their department
managers.
29. The merit-rating cards are mark-sense punched by the
Card Processing Group.
30. The Processor Operating Group places the cards in the
card reader and the data processor prints monthly merit-rating
reports for the Merit Rating Group.
31. The Merit Rating Group determines from the merit-rating
report the various pay rate changes that should occur and prepares
a payroll change slip for each change in pay rate for an employee.
32. The Merit Rating Group supplies the Standard Payroll Group
with a copy of the payroll change slip for each pay rate change for an
employee.
33. The Standard Payroll Group reviews and authenticates the
payroll change slip and sense-marks on a pay-change finder card
the employee number, the old pay rate, and the new pay rate.
34. The pay-change finder card is mark-sense punched by the
Card. Processing Group.
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35. Daily, the Card Processing Group sorts the labor cards
(used for labor distribution), exception-attendance cards, transfer-out
finder cards, and pay-change finder cards (and master payroll
change cards from the previous day), first, in order of department
number and, second, in order of employee number. Steps 36
through 43 are also performed daily.
36. The Processor Operating Group places the sorted cards
in the card reader, the previous day's master payroll tape on one
magnetic tape unit, and the tape to be used for the updated master
payroll tape on a second magnetic tape unit.
37. The data processor will read the hourly rate from the
master payroll tape and compute rate times hours for each labor
card in the case of hourly employees.
38. The data processor will add the total daily hours and
amount of pay to the accumulated hours and amount on the master
payroll tape. The accumulated hours and amount records will
change daily for each employee that has worked that day.
39. The data processor will recognize the finder cards and
cause the complete employee record on tape to be punched into a
master payroll change card.
40. The Card Processing Group sorts the master payroll
change cards into their new sequence with the finder cards and
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exception-attendance cards. The change cards for terminated
employees are sorted into a separate group and filed.
41. The Processor Operating Group places the sorted cards
in the card reader.
42. The data processor will produce an updated master
payroll tape.
43. The data processor will produce time and attendance
reports for the various departments.
44. The Personnel Records Group alters its records for all
changes in payroll deductions required by law or requested by
employees. (These deductions will include retirement (or FICA),
Federal income taxes, health benefits, group life insurance, state
income taxes (where applicable), United States Savings Bonds,
and other voluntary deductions.)
45. The Personnel Records Group sense-marks the changes
in deductions on a deduction finder card.
46. The Card Processing Group mark-sense punches the
deduction finder card.
47. Before the bi-weekly payroll processing is begun, the
Card Processing Group sorts the transfer-out finder and deduction
finder cards, first, in order of department and, second, in order
of employee number. Steps 48 through 68 are also performed
bi-weekly.
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48. The Processor Operating Group places the sorted finder
cards in the card reader, the year-to-date and deductions tape on
one magnetic tape unit, and the tape to be used for the updated
year-to-date and deductions tape on a second magnetic tape unit.
49. The data processor will produce an updated year-to-date
and deductions tape.
50. The data processor punches a transfer change card with
current, or updated, deductions for all transfers out.
51. The data processor prints a report for the Standard Payroll
Group which lists all changes in deductions for the bi-weekly period.
52. The Card Processing Group sorts the transfer change
cards, first, in order of department number and, second, in order
of employee number.
53. The Processor Operating Group places the sorted
transfer change cards in the card reader.
54. The Processor Operating Group places the updated
master payroll tape on one magnetic tape unit, the updated year-to-
date and deductions tape on a second magnetic tape unit, and the
tape to be used for the updated year-to-date and deductions tape on
a third magnetic tape unit.
55. The data processor records, in proper sequence on the
updated year-to-date and deductions tape, the transfer-in data
contained on the transfer change cards.
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56. The data processor processes or computes the following:
a. Accumulated gross pay from the master payroll tape.
b. Retirement (or FICA) % of weekly gross retirement
(or FICA) deduction.
c. Test total FICA amount deducted to date to insure that
the amount . has not exceeded the allowable.
d. [Gross(tax class x $13.00] x 18% = withholding tax.
e. Health benefits.
:1. Group life insurance.
g. State income taxes--these will vary depending upon the
state. The withholding formulas of the specific states
:involved should be used..
h. United States Savings Bonds.
i . Other voluntary deductions.
J . Accumulated deductions.
k. Gross- [FICA (or retirement) -withholding- health
benefits + group life + state tax . bonds . other]
net current earnings.
1 . Gross pay-j- gross to date = new gross year-to-date.
m. FICA +FICA year-to-date = new FICA year-to-date.
n. Withholding tax +withholding tax year-to-date = new
withholding tax year-to-date.
o. State tax +state tax year-to-date = new state tax year-to-date.
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57. The data processor prints a payroll register in a format
similar to SF 1013 (Payroll for Personal Services- -Annual Salary
Basis), or SF 1072 (Payroll for Personal Services--Various Salary
Bases). If both classes of employees exist, a composite format
should be used.
58. The data processor records on the updated year-toe-date
and deductions tape the current earnings and year-to-date information
for all standard payroll employees.
59. The Processor Operating Group places the updated
year-to-date and deductions tape on one magnetic tape unit and tape
for recording a check reconciliation tape on a second magnetic
tape unit.
60. The data processor prints the pay checks and earnings
statements.
61. The data processor records a check reconciliation tape
which contains the check number, employee number, and net amount
of the check.
62. The Processor Operating Group uses this check recon-
ciliation, tape as an input to the data processor...
63. The data processor prints a check register for the
Disbursing Group.
64. The Processor Operating Group uses the year-to-date
and deductions tape as an input to the data processor.
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65. The data processor prints a deduction register for the
Standard Payroll Group.
66. The Processor Operating Group forwards the completed
pay checks to the Disbursing Group.
67. The Disbursing Group inserts the pay checks in envelopes
by automatic means.
68. The Disbursing Group distributes the pay checks to the
various departments.
69. The returned checks are received from the bank by
the Disbursing Group.
70. The Disbursing Group forwards the returned checks to
the Card Processing Group.
71. The Card Processing Group sorts the returned checks
by check number.
72. The Processor Operating Group places the sorted
returned checks in the card reader.
73. The Processor Operating Group places the checks-still-
outstanding tape from the previous period on one magnetic tape unit
and tape for recording the current period's checks- still- outstanding
tape on a second magnetic tape unit.
74. After the checks-still-outstanding tape from the previous
period has been run, the Processor. Operating Group places the
current period's check reconciliation tape on the first magnetic
tape unit.
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75. The data processor accumulates the total amounts for
returned and outstanding checks and prints this information as well
as a listing of outstanding checks and amounts for the Disbursing
Group.
76. The data processor records an updated checks-still-
outstanding tape.
77.. Individual pay cards, patterned after SF 1127, may be
printed by the data processor whenever desired, but at least
annually, by recording an individual-pay-record tape. This tape.
is recorded in order of employee number.
78. Since the master payroll tape and year-to-date and
deductions tape are recorded, first, in order of department number
and, second, in order of employee number, it is necessary for the
Processor Operating Group to prepare the individual-pay-record
tape prior to use. This is accomplished by recording a complete
series of employee numbers on the individual.-pay-record tape with
sufficient space between the numbers to allow recording of the
bi-weekly, quarterly, and annual earnings, deductions, and net
pay for a calendar year. There must also be sufficient space
between the numbers for recording bi-weekly change slip numbers,
bond schedule numbers, bond purchases or refunds, and bond balance
brought forward. There must also be space for including data on
employee change of grade, with a listing of type of-action, effective
date, title., grade, and pay rate.
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79. The Processor Operating Group places the master payroll
tape on one magnetic tape unit, the year-to-date and deductions
tape on a second magnetic tape unit, and the prepared tape to be
used for the individual-pay-record tape on a third magnetic tape unit.
80. The Processor Operating Group uses the master payroll
tape and the year-to-date and deductions tape as inputs to the data
processor, once for each department number. The individual-pay-
record tape is updated for all employees in one department, then
for all employees in the second department, and so forth until all
departments and all employees have been included.
81. Whenever individual pay record cards are required, the
Processor Operating Group uses the individual-pay-record tape as
an input to the data processor.
82. The data processor prints individual pay record cards
for the Standard Payroll Group.
83. Quarterly, the Processor Operating Group uses the
individual-pay-record tape as an input to the data processor.
84. The data processor prints out, for the Standard Payroll
Group, quarterly totals of Federal income and FICA taxes withheld
from all employees, first, in order of department number and,
second, in order of employee number.
85. Annually, the Processor Operating Group-places the
master payroll tape on one magnetic tape unit and the year-to-date
and deductions tape on a second magnetic tape unit.
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86. The data processor prints W-2 forms for all employees.
87. The W-2 forms for all employees are addressed by use
of an addressograph machine in the Mail Room (or in the Disbursing
Group).
88. Alternatively, if it is desired to prepare W-2 forms in
order of employee number rather than, first, in order of department
number and, second, in order of employee number, the Processor
Operating Group annually uses the individual-pay-record tape as
an input to the data processor. This step is followed by steps 86
and 87.
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2.a Equipment Purchases
A tentative model information flow.sequence is presented
on the next page. This sequence is mainly illustrative of the
flow that occurs between the various groups. It :t s. not detailed
as in .the case of Standard Payroll. The model flow fo.r equip-
ment purchases, Figure 43, shows the tentative paths of infor
mation,flow between groups. , A model flow chart similar to
Figure 42 showing data processing operations has not. been
include.d.in..this status study.
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MODEL INFORMATION FLOW SEQUENCE
FOR EQUIPMENT PURCHASES
. 1. The Technical Support Group obtains data-from the Cataloging
.Group regarding possible equipment that may satisfy the requirements of
the user group.
2.. The Vendor Qualification Group advises the Technical Support
Group on the potential vendors' qualifications.
3. The Technical Group in Support Services provides. assistance
if necessary.
4. After selection of the vendor,.the Technical Support Group
forwards a.purchase requisition to the Purchasing Group.
5. Contracts Administration provides Purchasing with contracts
assistance .that may be required.
6. Purchasing sends .the purchase order to Data. Processing.
7. Purchasing sends .a-copy of the purchase order to the Rece-
iving.Group.
8. Data Processing sends a copy of the purchase order to the
vendor. (As an alternate., Purchasing.may send.a copy of the purchase
order to the vendor. )
9. The Receiving Group notifies Data Processing by a receiving
report when the equipment is received.
.10. The Inspection Group notifies Data Processing by an inspection
report when the equipment has passed. inspection. (The Technical Support
Group and the -Technical Group in Support Services may assist the
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Inspection. Group in certain cases. )
11. Data Processing reports to Accounts Payable that payment is
due the vendor.
12. After approval by Accounts Payable; Data- Processing sing,s ends
the vendor a check. in payment for the equipment purchase.
13. Data Processing reports to the Inventory Control Group that
the equipment has been added to.inventory.
14. Data Processing reports the equipment acquisition to Property
.:Accounting.
15. Data Processing reports to CostAccounting on the cost of the
equipment.
1.6. Data Processing reports to General Accounting regarding the
purchase.
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3. Other
There are many model information flow sequences
that should, be prepared for use in system optimization.
These include the following among others'.
(1) Addition of new employees
(2) Budgeting
(3) Cost accounting
(4) Equipment shipments to branches
(5) Purchasing of supplies
(6) Inventory control
(7) Labor distribution
(8) Leave
(9) Special payroll
(10) Location change for employees
(11) Preparation of financial reports
(12) Preparation of personnel reports
(13) Preparation of supply reports
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D. Development of a Computer-Based Data Processing System
1. Introduction
A data processing system developed and operated by
means of manual or conventional accounting machine methods
lacks three important qualities found in the more advanced
computer-based data processing systems. They are:
1. The information is not sufficiently timely to
meet the requirements for all management decisions
and sometimes is not selective enough to focus
attention on situations requiring immediate attention.
2. The conventional data processing system is
periodic in nature while the operations of an organi-
zation are not.
3.. The informational reports are organized in such
a manner that the inter- relationship between functions
are not readily apparent.
There are three possible justifications for using a
computer in the management field aside from the obvious
applications in the design and engineering fields. They are:
1. To cut clerical costs.
2. To produce faster and better management control
information than is practicable by alternate methods.
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3. To facilitate the application of mathematical
techniques to the solution of management problems.
To cut clerical costs, we look to changing the nature
of the work we now require from clerks who handle data.
Much of the present clerical effort is directed toward the
endless repetitive tedious monotonies of sorting, filing,
collating, copying, and matching. A computer can equal
the efforts of many clerks in the performance of operations
of this type. The systems designer who takes the approach
that he can simply replace manual or conventional machine
accounting methods with the computer soon finds that he
has created many more problems than he has solved by
speeding up an isolated processing area.
Manual and machine accounting methods are charac-
terized by multiple files and batch operations. Basically,
in a manual system we find many processing operations
proceeding independently of one another, whereas in the
computer the processing cycle is sequential. That is to
say, the computer undertakes every possible operation on
a given piece of data before going on to the next. Therefore,
the processing cycle is necessarily orientated by type of
input document rather than by type of report or operation.
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This means that the input must arrive at the computer on
a scheduled basis in order that the desired output in the
form of reports is both correct and timely.
The key to the solution of this problem, which is
somewhat new to the machine accounting analyst in both
scope and magnitude, lies in the systems approach to
setting up a computer. The systems approach results ii
subjecting the entire data processing operation of an organi-
zation to a critical remexaniination in order to determine
the requirements of its information system. During the
study the purpose of each of the present reports is examined
and questioned. The reports are looked upon as a contin-
uous flow of information required to carry on the objectives
of the organization.
During the systems study, the analyst should be
aware that the informational needs of the organization are
not necessarily the output of present procedures. Current
methods are often a patchwork imposed by present machine
limitations, supervisory inflexibility, and reaction to p4st
emergencies. As a consequence, the information for
policy guidance and control of day-to-day operation may
not be clearly reflected by current office activity, Reports
are meant to convey information and information is meant.
to cause action.
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A prime consideration in. designing the system is to
determine a method of checking input data to preclude the
introduction. of erroneous data. In a manual system, the
input data is characteristicallly re-,checked at each level
of summarization. In a computer system, the data, once
accepted, tends to flow into the various reports without
question as to its validity. As a result, the analyst often
finds that erroneous data has entered so many reports
that it is difficult to devise correction procedures which
are easily handled by the present clerical force and
consequently his system is subject to criticism and correctly
so. Successful computer systems overcome this obstacle
by placing a great deal of emphasis on the possible types
of input errors and devise techniques within the computer
program to detect suspect: data and reject it at an early
point of the processing cycle. The rejected data is then
immediately returned to the or:.gi.n.ati.ng department for
correction. This feedback of erroneous information then.
tends to strengthen the data processing cycle rather than
weaken it, as do so many elaborate error-correction
techniques which require the attention of a computer
specialist with a thorough knowledge of the program.
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2. Systems Study
Having decided that the systems approach to installing
a computer-based data processing system is the preferred
method, the first step is to gather data concerning the
present system. Data is gathered in order to discover the
fundamental requirements of the organization before
describing the step-by-step data collection and processing
operat ions for the computer programmer. One criterion
most helpful during this initial phase of the study is to keep
in mind that information is the basis for making management
decisions and also it should reflect the result of the decision-
making process. That is to say, it should convey informa-
tion regarding what should be done as well as report on the
effectiveness of previous decisions.
As the analyst tours the organization to gather infor-
mation concerning the nature and volume of all transactions,
records, and reports, it is imperative that his investigation
be systematic and thorough. It is recommended that he have
an organization chart so that he may check authority and
functions in each department to insure that all the informa-
tional needs of the area are determined. As he collects
copies of all forms, records, and reports, he notes on each
where he got it. In each area, the personnel are questioned
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concerning the decisions which they make during the prepara-
tion of the input documents and, specifically, the manner in
which all the data on the source document is obtained. The
records collected should be filled out with actual represen-
tative data since blank forms often convey misleading infor-
mation to the analyst. If the analyst has limited his questions
to the work actually done in each specific area where the
information was obtained, the data should be reasonably
correct. With this data he can now return to his desk and
flow the basic information required to conduct the organi-
zation's work in order to plan the computer programs.
The analyst will now investigate methods to simplify
the flow of the documents and, in many cases, by-pass areas
previously receiving copies of source documents and replace
them with reports which will report on an exception-basis
the item requiring attention and action. Much of the apparent
duplication of effort found in manual systems has arisen due
to the fact that manual systems, in essence, operate in the
simultaneous mode in order to obtain timely information.
In a computer-based system, however, the information will
be processed in a sequential mode and be timely as well, due
to the computer's great processing speed.
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The most challenging problem facing the systems
designer is to determine how to provide input data to the
computer so that output data in the form of reports will
be available at the proper time. A common method of
scheduling the production and delivery of reports is to
determine what action is taken as a result of a report
and then determining the priority that this action has in
the operation of the organization rather than asking each
report recipient when he needs the report.
3. Systems Design
Having determined the informational needs of the
organization and established an order of priority based
on the relative importance of management action, the
analyst organizes the data into computer tape files. The
files are organized based on data usage and content. Basic
record files contain master information, usually updated
only when a basic record bit of information changes. Other
files are working files and contain current updated trans-
actions. At each succeeding level of summarization the
information becomes more condensed. It is usually very
important not to build into the system the requirement that
all or any input errors be rectified before further processing
of non-error items proceed. At each processing step, there
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must be an input which is either new data or the output from
a previous step. Those outputs from previous steps deter-
mine. the proces.singsequence..to. that point. When this causes
problems in timing of output reports, alternative methods of
gathering the required input must be sought or, perhaps,
duplicate processing of the original inputs may be considered.
Each "test" situation where a computer decision determines
the next course of action can have only one of two possible
solutions. If this is not so, then the information available
to the computer has not been sufficiently detailed to program
the report. All input data, of course, must result in an
output of either intermediate or final reports or the input data
has no place in the information system.
The real need in the reports area is not to super-
impose a great many more reports on the existing informa-
tion structure. Rather, the need is to think critically and
determine what information is really needed or can profit-
ably be used for planning and controlling the organization.
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VIII. NEED FOR SYSTEM INDOCTRINATION
This status study has pointed out the fact that there is a great need
for overall system indoctrination within the Agency. It is true that
some training courses were presented by RCA in the computer field;
but they were very inadequate. RCA is one of the younger companies
in commercial computers and cannot be thought of as one of the more
capable when it comes to back-up material for their computers. The
courses that they gave were brief (a day or two at the most, in general).
There was a large task to be accomplished because the Agency was just
starting in the field of electronic data processing. For the main part,
the courses that were given were presented to the wrong audiences.
For instance, management people received the detailed programming
courses and technical people, the executive courses. Be that as it
may, these courses never were sufficient to convey the desired knowl-
edge to the employees of the Agency. It is essential that proper training
be accomplished, however, in order that this multi-million dollar system
.composed of equipment and methods can be properly implemented.
Indoctrination, however, is not an easy task when one considers the
involvement. The knowledge to be imparted is not only for present
operations but also for future needs and must cover machine systems
ranging from simple input devices, such as, the typewriter, through
the high-speed computer now in use.
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A. Training Courses
The courses recommended would be of two types: :general
and specific. The general course.would consist mainly of material
on computers and the application of computers to business systems.
Even at this stage of man's acceptance of computers, it is not,
.easy to find a good general course that can be presented in a
matter of a week or two to people who are not completely oriented
to receive it. However, there are already many firms who do
offer courses to' their employees and most of the computer manu-
.facturers do have general courses. In addition, there are books
and certain college courses which can be used as back-up. The
Agency will be using computers as far in the future as we can
see.. It. will have to keep up with the general trend toward auto-
matic data' processing and there is no doubt that the ensuing years
will find more computer usage, not only by the people presently`
involved but by everyone.
It has been mentioned, there are courses that are already
being given in general business and scientific fields. However,
it must be pointed out very strongly that the work of the Agency
in many cases is unique among Government and industry. Any
course given must not only be general in order to teach the
basic underlying principles but must also go into the very specific
needs of the Agency. For instance, in the payroll area, the Agency
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has several payrolls whereas most businesses have only one.
Any general computer course will usually base its payroll dis-
cussions on the single payroll concept. However, that would not
satisfy the indoctrination requirements of Agency personnel. Any
specific course would probably be based on a general one. It
is essential that this fact be borne in mind, so that at the end
the many weeks spent in indoctrination one does not find that the
personnel, although they know a general system, are unable to
cope with the specific problems of the Agency.
B. Limitations
The concept of limitations is one aspect of computer systems
that one does not often find in general courses, especially the
courses given by computer manufacturers. As a result of this
study, however, it has become apparent that this important area
should be presented to Agency personnel. Many of them are
aware of computer capabilities from collateral reading and they
know that an electronic data processor is nothing more than a
tool; however, as a result of lack of indoctrination, the limita-
tions of this tool,.are not fu:lly.,understood. . Most of the personnel
think it will do more than it actually will. The RCA 501 Computer,
however is limited and is on the low end of a medium-sized and
-priced computer. It will not do all of the wonderful things that
one reads about in various publications because it is not a
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large-scale, expensive computer containing the most modern and
up-to-date advancements. Agency needs do not call for that type
of computer. They do call for a typical business computer, which
this is. A typical business computer, however, does not have
the capabilities of the scientific types that we hear about with
large, fast memories with instant access to millions and millions
of bits of data. The 501 is relatively small. Its use must be
carefully planned. It can handle only one problem at .a time.
Since there are four major jobs on this computer at present, it
is necessary that they be handled in definite scheduled order.
Although a computer will handle many problems, it can only handle
them in the order in which they are programmed. There are many
ramifications of computer limitations and it was not the intention
of this status study to go into them. However, the necessity of
pointing them out, so that personnel will utilize the computer
accordingly, is established. Much of the dissatisfaction involving
this computer will be alleviated when users become aware of the
systematic cooperation that is essential in its operation.
The cooperation of the employees is an important aid to the
success of an electronic data processing program for reasons
such as the following:
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(1) The development of an electronic data process-
ing program is a large project involving the effort
of numerous individuals, most of whom are not
under the direct supervision of the head of the
program.
(2) The computer program usually cuts across
departmental lines and requires inter- departmental
cooperation.
(3) The development of a sound program often
requires full and ready access to the records of
other departments and an u.nderstariding of their
:system procedures.
(4) The success of new systems and procedures
depends on the desire of employees to see that they
work properly.
(5) Willingness of employees to transfer to the
electronic data processing organization depends on
their enthusiasm and interest in their new venture.
The same can be said for their willingness to coop-
erate with that organization.
(6) The Agency is greatly compartmentalized and
there are many misunderstandings which arise because
of the fact that communications are limited. Therefore,
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it is necessary for employees in.an establishment of
this type to make an effort to maintain. cooperative .
links of communication o
It is essential that all employees be apprised of the system
because, by definition, the system involves all of the employees.
It is something that need not be gone into in great detail except
as each individual part of it affects each individual's job. How-
ever, it has been found that people of reasonable intelligence
function best when they are aware of what they are doing, what
is expected of them, and what their contributions will add to the
success of the overall effort. The Agency has people of better
than average intelligence. This type of individual. is not satis-
fied with routine jobs and the piecework approach to operations.
This type of individual is a professional and once he is apprised
of the relationship of his position. with the rest of the organi-
zation, he. works more efficiently toward the common goal.
Because of this inherent intelligence, it can be stated optimis-
tically that proper systems indoctrination. and training will
result in cooperation in the majority of cases.
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IX.. EVALUATION OF EDP SYSTEM
A. Performance and Progress with Present EDP System
The present EDP system has been under lease and in the
Central Building for over a year, since October 1960. The
major processing equipment of the computer has always operated
satisfactorily., This includes all of the equipment in Room 1.
See Figure 38. Some of the units in Room 2, shown in Figure 39,
including the card punch, card transcriber, and printer, have
not been operating satisfactorily. This matter is discussed in
more detail under section3X.E. The performance of the system
as a whole leaves much to be desired, and it can be traced to
the fact that an orderl
stem was not set up lize the
new conceptof electronic data processing. The progress toward
the use of the computer has been excellent. However, the time
has come when it is necessary to do an overall system study in
orderto get proper performance. Although progress has been
good, it does not mean that performance is good.
It has been the observation of this study that the computer
operators have been working practically beyond the limits of human
endurance. They have learned how to be computer people. Most
of this was done on their own as there was very little support
actually given by the computer manufacturer or by any Government
agency. None of these people were detached to attend school and
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most of them came directly out of the Electric Accounting ?Machine
Division. Although, of course, there is some similarity between
the tabulation equipment found in electric accounting machine
systems and the electronic operation of a computer, it is really
very superficial. It is a very difficult.job to learn about com-
puters and to train oneself at the same time so that he can
operate a computer effectively. This has been done. The
personnel now operating the computer have been doing very good
work. The decision was made to allow them to take the time
to learn and become programmers. This is what they now are.
They know the RCA computer probably as well as most RCA
employees. By no stretch of the imagination can they be con-
sidered to be well versed in the computer field, but they do know
this one computer. Their progress has consisted of taking what
systems knowledge they had and applying it to electronic data
processing. One major reason that this report does not suggest
the substitution of a new computer, at this time is the fact that
these operating personnel are very well versed in the RCA 501 c
corn -cater and would have to be trained to handle another one..
Although they are much more receptive to this training, because
of their past work, it is not felt that it would be a good idea to
make a change in the computer at this time unless further studies
indicate that the present one is inadequate.
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There are many problems resulting from the performance
of the present EDP system. One of these is the fact that the
machine is saturated. There has never been a time that the
facility did not run over the .176 hours primary shift (primary
shift on the new contract is now 200 hours). In addition, it has
been running considerably more than the present 200 hours.
Compensated and uncompensated overtime is the usual order of
the day in the computer area. The computer operators have been
working nights trying to keep up with the work. It is true that
the machine. is saturated and that it cannot do the entire necessary
job within eight hours. This is not to indicate that the present
machine is too small or that it will be necessary always to be on
overtime schedules. This statement can be made because of. the
fact that an orderly system does not exist to back-up the computer.
Once an orderly system--Agency-wide--is completed, it will
either be possible to operate the computer in a single shift, as
was anticipated, or the need for a larger or faster computer will
be indicated.
Users are not receiving their computer output when they
want it. It is true that a payroll has never been missed but there
have been many close calls. In the other areas of Personnel,
Logistics, and Accounting, there has always been a great amount
of dissatisfaction because reports are not forthcoming as they
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should be. It must be pointed out here that this is not a computer
equipment problem alone. It is a s stems problem if the in ut does
not come in at the proper time,- or in the proper form, or go-to
the proper place. It is then impossible for the computer to comply
with the demands that output be delivered at a certain time and in
a certain form.
The peripheral equipment failures, that is, the failure in
the high-speed printer, the card punch, and the card reader have
definitely acted to the detriment of the system. It is impossible
to perform and fulfill management's role of input-output and
production of reports without the 100% use of these devices.
In the first year of the computer's operation, it was necessary
to spend much time in order to produce computer routines and
programs. The decision had been made to bring electric account-
ing people up to electronic data processing jobs. Much valuable
time was lost while these people were trained to be programmers,
and during the first six months of operations certain chaotic
conditions existed. This was due to the fact that some of the
people who had formerly been in charge of electric accounting
machine operations had now left that job and were programming
for the data processor. During this period, the data. processor
was not working to full efficiency ibecause the programs were
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not completed) and the electric accounting machine function
was not efficient because of the fact that many of the people
had left.
During this first year it was necessary to spend much
time with RCA at their plant in Cherry Hill, N. J. and also
at the R.CA Service Bureau in Washington. Much money was
spent there on the Service Bureau?s machine in order to debug
and test programs. Because of these problems, and the fact
that the operation was more or less pulling itself up by its
own bootstraps, it was definitely slow getting started. The
performance has been surprisingly good and the system involv-
ing the computer equipment is operating. There are many areas
for improvement. One of them would be to evolve an orderly
system based on the computer. Another necessity involves
the computer equipment itself.
In general, users ? reactions to the computer services
have not been what was expected, and numerous problems have
resulted from the fact that many of the users are not satisfied.
It was not the purpose of this report to list all of the
problems that have to do with the electronic data processing
system. In order to present a status report of this type, it is
desired to list only a few of the more outstanding problems.
These are:
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1 . Logistics Stock Status Book
This is a book that is printed every month on the
high-speed printer. It contains every line item that is
carried by the Agency. Approximately 66, 000 items are
carried in this book. Each book consists of 6, 000 printed
pages and nine copies are made each month. It takes
approximately 33 hours to run these nine copies. The
book is used in Logistics as a reference and also as an
actual working document for stock additions and stock
withdrawals. Whenever stock is obligatedath.e amount is
entered into the book, adjacent to the item, by the stock
analyst. At the same time, the stock analyst fills out a
voucher which is sent to the Automatic Data Processing
Division. This voucher is used to print the next book.
In other words, at the end of the month, all of the vouchers
are tabulated for each item and this gives the amount of
withdrawals. The stock status book is also used for
additions, and whenever stock arrives, it is added into
the book by hand. At the same time, vouchers are sent
to Automatic Data Processing, notifying them that addi-
tional stock has arrived. These vouchers are then used
at the end of the month to up-date the stock status book
to give the amount added.. Several problems arise here.
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One is the fact that it is necessary to run nine copies of this
book. It is usually run on five-part forms. Therefore, in
order to run nine copies, it is necessary to print twice.
Analysis may easily show that only five copies would. be
required rather than nine. If some of the receivers of
this volume were to be apprised of the cost and the time
involved to run the listing twice, they may very well realize
that it is not necessary for them to receive a volume. The
first step in any systems analysis is often to check the
advisability of printing certain reports or of printing multi-
ple copies of certain reports* Very oftena little ingenuity
can be applied at this point to save time and money. If it
is necessary for everyone to receive one of these reports,
then the time and the money spent can be justified. If it
is not necessary, this fact should be determined and steps
taken accordingly. There has been quite a bit of discussion
pointing toward the fact that stock status should be kept
in a.random-access type of computer so that in an instant
the stock being withdrawn or being added to can be updated;
and,also, similarly, within an instant, management can
query the computer to find out what the exact amount of
stock on hand is. This cannot be -done with the present
system without calling the stock analyst--asking him to
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check his books, add up all the withdrawals, add up all
of the receivers, and come up with the actual amount on
hand.
It is not an easy thing to specify a random-access
device or a computer device to be used for Logistics
without studying the situation. Such factors as the time
involved, the people, and the location, must be considered.
If a computer is needed for stock control, all well and good,
but this problem must be very carefully investigated.
2. Cost Accounting versus Allotment Accounting
There has been a lot of dissatisfaction resulting from
cost accounting by cost center numbers. Certain areas of
the Agency would like to see listings, for instance, by
cost center numbers, whereas others would like to see
them listed by employee number and other categories.
Taking a look at the payroll, there has been controversy
as to whether the listings should be by employee cost
center number, or whether the list should be by employee
number, with the cost center number secondary. It is
true that the computer can prepare both of these listings
because each entry on the listing does contain both bits
of information. However, it is a time consuming and
expensive effort on the computer?s part to sort and merge
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all of the information in order that a listing can be made
from the information previously assembled in another order.
It should be resolved as to whether or not this expense of
time and money is justified. There has been certain
dissatisfaction over the interpretation of Public Law 863
(see Appendix E). A lot of this is due to misunderstanding.
Some areas of the Agency feel that compliance with a cost
center number listing is absolutely necessary. Some feel
that it is a General Accounting Office law and so forth.
The major problem seems to be in a lack of understanding
of what the law actually means. Actually, it must be
applied only where it is feasible to apply it. Therefore,
the Agency is not under obligation to fo~~~w ~acast centers
in all cases. This fact should be pointed out to all employees
and there should be a unified -understanding. If then, it is
true that different listings are- necessary, one by cost
center and one by employee number, for instance, this
must be worked out, programmed, and scheduled accordingly.
3. Reports
There are a multitude of reports produced by the
computer facility. The exact number is not known. The
EAM system printed something like 10,000 reports a year
and it is generally assumed that there are now more reports
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being issued. It has been very difficult to determine what
all of the reports are. In this study, we have been unable
to assemble a complete set of reports. This must be done
as a part of a larger study. One thing has become apparent,
and that is that many of the reports are redundant, that
much of the information on one report is often repeated in
another. Thus, these redundant reports can be consoli-
dated. It has been observed that one report, with the
addition of a column or two, could serve several areas
very well, and thus free the computer from printing a
complete new report. It: has also been observed that the
formats of the report are not consistent. For instance:
employee number may appear as the first entry on one
report and somewhere near the middle of another report.
This makes it very difficult for employees to utilize these
reports in an effective manner. They have to reorient
themselves every time they look at a new report.
4. Forms
It has been determined as a result of this study that
there is no rigorous control of forms. It is true that all
of the Comptroller?s Office, but the responsibility of this
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section is only to approve the report if it meets certain
standards-
They have no authority to reject the form or suggest
that the user utilize another form initiated by someone else.
The results are obvious. There are now many forms, many
hundreds in fact, being used throughout the Agency. These
are not consistent. Many of these forms are the original
entry documents for the computer. The information on
them is punched into a paper tape or a punched card. Thus,
the form should be laid out in such, a manner that this work
can be easily accomplished. At present, this is true in
only a relatively small number of the forms. It is going
to be necessary to examine all the forms on a uniform basis
and thus eliminate the redundant ones, combine others, and
in general make them more efficient.
5. Entry of Data
One of the outstanding problems is the fact that entry
is made by hand or by typewriter onto certain forms for
input into the computer system. These forms are then
prepared for the computer by additional operators who
prepare a punched paper tape on a suitable machine or who
punch IBM cards. The more accepted manner of doing this
is to eliminate work and involvement by having the operators
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punch a paper tape at the time they make an entry onto the
original form. This is being done only in the Office of
Personnel and has proved satisfactory. The RCA 501
computer is uniquely suitable for receiving punched paper
tapes from a flexowriter. Investigations should show that
the time saved and personnel saved by making an original
entry on a flexowriter would soon pay for the rental of
this type of machine. In addition, the operator, who makes
the entry within the component is more likely to catch errors
than would a machine operator who punches the paper tape
from the form, at a later date and in another location.
6. Posting
In certain areas of accounting, allotments and other
postings are done by machine, but postings to the ledger
are done by hand whereas, in certain other areas, allotment
posting is done by hand but posting to the ledger is done by
the computer system. These are fertile fields for improve-
ment because two different systems are running under one
roof. Perhaps one is better than the other, but at least a
suitable combination should be found that is most satisfac-
tory. In DD/P the work of the Budget and Finance Officers
is all done by hand, and these once again are areas for
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extending the machine complex so that a certain amount of
efficiency can exist between these areas and the computer
system.
7. Da-Span
Another great problem revealed by this study has to
do with the RCA Da-Span equipment. This is located
partly at the warehouse and partly at the computer facility.
This equipment is b "n rented for $670 a month has beep
on rental for over a year, and has never been operated. It
can be pointed out as one of the typical problems of the
Agency. For one thing, if it is not being used, the lease
should be cancelled as it has been on the premises for over
a year. Besides the actual expense there is an underlying
adverse systems philosophy that this equipment points up.
It is this. The machine was evidently leased by Logistics
and it has been the impression of certain people in that
office that it would operate directly into the computer. This
is not true. Its mode of operation is as follows. The paper
tape is punched at a remote site on a flexowriter typewriter.
The paper tape is then placed into the transmitting end of
the Da-Span and sent over commercial leased telephone wire
to the receiving end where a paper tape is punched with the
information. This paper tape can then be fed into the
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computer. The underlying factors are that the paper tape
prepared in the warehouse must be compatible with a system
already set up by the computer people. They must have a
program so that they can handle the tape when it is received
at the computer facility. However, in, this case., there seemed
to be no notification given to the computer people that the
Da-Span system for transmission of information was to be
used. No one asked their opinion about how the information
should be sent, what the format was to be, what the trans-
mission rates would be, and so forth.. Thus, there has
been no serious thought given to the overall systematic
study of what this machine would do and how it would do it.
A computer cannot be expected to take information suddenly
sent to it from out of nowhere, process it, and return an
answer. This is a typical problem where a lack. of coordi-
nation, between user and equipment operator exists. It can
be cleared up by getting the various components together,
discussing what is wanted, what is desirable, how equip-
ment is going to be utilized, and what forms are necessary
for information handling. The thought of using the Da-Span
probably stems from a lack of understanding of computer
operation. This is an obvious source of trouble in the overall
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system., because it is apparent that this equipment is not
working and that it cannot work without further systems
study.
8. Error Rate
A.l.arge.errorr rate is becoming normally acceptable
in the Agency. By this, we .are referring to errors on
the input documents that are submitted to the computing
facility. The rate is running about seven per cent. This
is about two per cent clerical error and about five per cent
inherent error. These errors are occurring in such things
as cost center numbers, employee numbers, and other
entries that should be carefully checked by the component
originating the input document. What happens is that these
must be corrected, either before they go into the computer
or after they are processed. it involves careful checking
. by the people in the computer facility and also involves a
great deal of corrective paperwork.. There is no reason
for this high percentage of error and it is running much
above that in industry. In fact, things have become so
bad that certain components are allowing these errors to
go through without making an attempt to check them them-
selves because they know that the computer people will
catch it. This is not the way to run an orderly system.
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9. Late Time and Attendance Cards
There is a problem in late T and A cards.
Computer processing is often delayed until everyone?s
T and A card is in. This practice could possibly have
been followed in EAM, where it is possible to process one
card at a time, but it cannot be done with the computer,
where everything must be done in order and entries are
tied up on long magnetic tapes. When delaying this prom
.cessing, a great deal of time is lost .and the computer is
kept from doing other essential work.
10. Exceptional-Information Reports
Another problem is that often the computer facility
is expected to produce reports that are only looked at under
exceptional conditions. The areas demanding these reports
probably do not realize the cost and time involved in. making
these reports. If they did, they would realize that it would
be better to find other ways of locating the exceptional
pieces of information they desire.
11. Overtime
The overtime has gone up in the areas instead of
down. For instance, in, the Payroll. Branch of the Fiscal
Division, the overtime before installation of the electronic
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.data processing equipment was 13-1/2 hours per pay period.
Last year,, y th the- EDP equipment it 260 hours per
pay period.. This year, it is 115 hours per pay period, so
far, and the best estimate seems to be a future reduction
to 80 hours a pay period. This is, of course, a situation
that looks extremely bad on the surface o Investigation
has revealed that this tremendous amount of overtime in
that.one.branch can be reduced by efficient machine methods.
in t_ ~h at area that could be
avoided by the evolution of an overall efficient system,
12, Peculiar Problems
There are certain problems that are peculiar to an
agency of this type o Many of these were never considered
at the outset because the computer manufacturer, whose
advice was taken, never understood the full ramifications
of the Agency's bu.siness a This agency is unique among
Government agencies in that there will always be many
exceptions The system is unique in the fact that there
is so much printing. Yet, these matters were never taken
into account when the computer was purchased. The choice
of this computer was not an error.., but the facts remain that
it was never programmed for exceptions in the beginning and
a systems study was never made.
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13. Summary
These typical problem areas have been chosen to
represent the drawbacks to the performance and. progress
of this EDP system which have necessitated this status
study. It has been pointed out in this section that there
are problems and difficulties and that in the main they
stem from the fact that the recommendations of the
Management Staff, pointing up the need for an overall and
complete systems study, were never implemented.
III
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B. Ope rating Cost and Computer Operating Time
The present cost of the computer operation is $700, 000
per year. This includes the IBM electric accounting machine,
equipment, the RCA 501 Electronic Data Pr.or,essor, personnel,
The estimated
supplies, and incidental items such as travel.
cost for the calendar year of 1962 is $866, 577.
h of approximately $50, 000 will be
A reduction. in cos
the electric accounting machine
achieved in the future when
e ui meat is almost completely displaced. The equipment lease
q p
for FY 1962 are $72 328 for EAM and $2648 300 for EDP,
figures
for a total of $336, 628 per year.
It is not likely that there will, be any great reduction in
the cost of this operation. It is apparexrA that the original conm
of saving money by the introduction. of EDP to do the same
cepts
jobs of EAM was not based on fact.
What is apparent is that the computer facility will always
a recia.ble cost; but that it can be fully utilized to do much
pp
be of
more than it now does. In this way, it will fully justify its exist-
ence.
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The operating time of the main electronic components has
been excellent, whereas, all of the computer peripheral equipment
(card reader card punch, high-speed printer) have been unsatis-
factory. In the past, it was necessary to skip normal preventive
maintenance because of lack of time. Since the inception of this
study, these procedures have been carried out. The results have
been an improvement in the card reader and card punch operation.
The printer, however, is still unable to turn. out really acceptable
work. The failure of this peripheral equipment is more fully
discussed in section E which follows,
C. Progress Towards Original EDP Concept
The EDP concept Has understood by most peoples is that laid
down. in. the Management Staff reports. The concept was this--to
convert from electric accounting ma.ch?ines to electronic data
processing on, a one..?to-?on.e ba.siis. It was thought that this would
save a certain. number of people and save a certain amount of money.
In addition, it is generally thought that one of the original
concepts, in October, 1960,'wa.s to do all processing being done by
the electric accounting machines on the electronic data.processor
in four hours a day, the other fou:r hours of the day could then be
used to advantage for other computing needs of the Agency. Another
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concept was a phase none, pha.se-.two concept in which phase one
Would be the onemto-on.).e change over from EAM to EDP and phase
two would be the optimization of all of the programs. This state-
meat,about four hours,a-nd also a. clear definition of phase one and
phase two activities were never seriously presented and, therefore,
should be discounted. In the first place, it would have been very
difficult to determine "hat the exact operating times of the com-
puter would be when no detailed study had been done of programs
necessary and so forth. Also, the phase -,one, phase-two operation
was never completely delineated. It is true that RCA insisted upon
a one-to-one EAM conversion., but no program was ever laid out
for this conversion and no'program was ever laid out for a so
called phase-two operation involving optimization of programs
and placing the rest of the manual system onto elect:Lor.ic data,
processing.
Therefore, the major concepts that are understood from
the original recommendations are that there would be a saving
both in personnel and in money. It is truly unfortunate that these
were taken as concepts, because a systern need not save money or
people in order to be efficient. This Agency's work is vital, and
must be done in a timely fashion regardless of cost.arnd involve-
ment of personnel. Many years ago when computers were brand
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new, they were sold on the strength of saving money and saving
people. At that time, these were overriding considerations. How-
ever, as computers became more advanced, expensive, and complex,
it was realized that they could very well justify their existence on
other factors such as accurracy, speed, memo;=?y, compatibility, and
suitableness for the operations Therefore, the fact that this:. machine
has not saved money (in fact it.is more expensive than. the EAM equip-
ment) and has not saved people is not a factor that can be seriously
considered at this time. One must forget the desire to save people
and money. Theonly t ru.e judge of a mo de rn. corri.pute a i s d e `~ it do
the job in an. efficient a.cn.d satisfactory manner and is it worthwhile?
Does it justify its keep? This computer is not operating in an orderly
system at present. It is not operating ir.:, an optimized or idealized
condition and it cannot be :E, y jud ed as to w1tethe ? `.t earns its keep
until an'overmall system is evolved which, is based upcn the com-
puter.. Once this optimized. system is delineated, it will be apparent
whether a computer does justify 'itself, One off:' the basic underlying
concepts of the original studies was that a detailed systemz; study
was necessary and that detailed work would be necessary before the
computer arrived. In addition., it stated that programming and all
other systems work must be. accomplished, either beforehand or as
soon. as possible. This concept was never followed, and the original
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plan for a systems study was never done. The.team assembled to
do the systems study in the Automatic Data Processing Division.
were also in charge cf the pr-rogram:?:ning, This became such an.
involved task, due to the fact that there was no experience and
these people had to learn. a new field, that it became "'m-possible
for them to do the systems study, Therefore, the progress toward
the original concept has been negligible. There has been no saving
in money, there has been, no saving of people,, there has been no
saving in time of processing, and there has been no systems study.
D. Savings in Manpower, Time,, and Equipment
The cor~versior`- from the., electric accounting machine has
never been completed dune to the fact that the programming effort
on the electronic data, processing equipment was necessarily slow
while the programmers were being trained. Most of the electric
accounting machine equipment is still being retained and. is still
being used. Some areas that are already supposed to have been
on the computer have not been, able to go on beca-,,~ise there has not
been time to make the conversion. Notable among these is the
u.n.vouchered payroll which is completely on accounting machines.
At the present rate, it will be impossible to place this on the com-
puter and still operate the computer with-iii the primary shift.
Although several pieces of EAM equipment have been taken off the
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lease, there has been no great decrease in the amount of equip-
ment being operated. As mentioned. previously, there has been
no saving in either time or people. The reasbn. for'this is that
savings cannot be made and optimization cannot be done in a hit-
and-miss fashion. They can only result from an overall con-
scientious effort to devise a completely integrated system in which
there is a relation between all factors in such a manner as to pro-
vide for complete efficiency. Until this is done, there can be none
.of these savings. This efficiency has never been achieved and
there have been no appreciable savings in equipment, in time, and
in. manpower,
E. Equipment
The equipment of the computer facility is shown in Figures
38 and 39. This equipment is located in Central Building and con-
sists of the RCA 501 computer complex. Such basic data regarding
the computer as its add time, access time, memory capacity, tape
speeds, and so forth have not been included in this report although
it has been taken into account in the study. The major reason for
not including. it here is the fact that it loses importance unless the
exact method of utilization of these factors is known. This machine
is relatively slow, having a cycle time of 15 microseconds. One
cannot say that one of the newer machines with a cycle time of 6 or 7
microseconds is indicated and that if it were brought in it would be
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able to do the job twice as fast. These intimate machine details
are only important as they relate to the system. It is possibly true
that in the future, and if an orderly system is evolved, it will become
apparent that a faster machine is necessary. However, at the
present time, without this orderly system's backup, it is- difficult
to predict whether the present machine at its present speed will
be able to serve a new system.
Due to the fact that this computer system has just been
developing, the utilization times of the computer have not fully
been established. Therefore, they have been varying from month
to month. During the. month of October, 1961, the utilized time
was about 380 hours. This means that it was necessary to pay an
hourly equipment rate for an extra 180 hours. That is the time over
the basic 200 hours contract. In other months, the utilization has been
only a few hours over 200. It is anticipated, with proper program-
ming and scheduling of input and output, that it will be possible to.
complete all of the business processing of the Agency within the
eight-hour shift. The overtime charges have run the cost of the
computer installation into many thousands of dollars more than
estimated. The estimate of computer cost given in the original
Management Staff study involved a savings of $29, 000 in the MRD
electric accounting machine costs. At that time, the EAM.costs
were ..approximately $546, 000 and, therefore, with a saving of
$29, 000 the cost of this computer installation. was anticipated to
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be in'the order of $537,OOQ. Of course, this estimate was made
in 1959 and costs would have gone up even if the electric account-
ing machine facility was retained. But these costs would never have
approached the $866, 577 that has been budgeted for EDP operations
in the calendar year 1962. The fact that this is more than $300,000
higher than the EAM equipment costs must not be taken to mean
that a computer cannot be used and should be eliminated. This
directly back to thp, Tact that there is no
orderly system behind it. Once this is established, it will be seen
that these costs reduce down to a normal levelo It is true that they
may never get down to the originally estimated $29,000 savings,
but an agency of this size and complexity cannot operate without a
computer. Other Governmental components have been operating
quite successfully and there is no reason why one cannot be optimistic
in predicting that this agency can do the same thing.
It .was anticipated that there would be a reduction of ninety per
cent in the punched card operations after a year?s operation of the
EDP. This has not come about. One reason is that there have been
additions to the electric accounting machine load ever since the com-
puter arrived, and another reason is that the computer has not been
ready and fully programmed to assume the complete EAM load.
Several pieces of punched card equipment have gone off of lease, but
not many. The original report said that there would be additional
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savings from systems redesign, and that this would come about
as redesign was accomplished. However, as pointed out previously,
redesign was never accomplished.
There have been failures and unsatisfactory performance within
the equipment complex. One item of equipment in Room 2, the RCA
high-speed printer, has never turned out satisfactory copies. One
of the greatest problems existing in this system is due to that fact.
The printer is of little value as far as quality output is concerned.
For one thing, its rated speed is 600 lines per minute, but it has
been almost impossible to obtain acceptable printing at that rate and,
in many cases, runs at a slow speed setting of 350 lines per minute
have been necessitated. Even':thenthe. printing. is unacceptable.
There are cases where characters are misplaced, where characters
are jumped into the wrong line, and where printing occurs on top of
other printing Throughout the period of this study, everyone in the
Agency has mentioned the bad printing that they receive. This cannot
be tolerated because so much of the work utilizes printed reports from
the computer. During this period, the computer manufacturer has
made no serious effort to replace this printer with one of a better
kind. The RCA 501 printer is one of the poorer ones on the market.
However, there are ways that it possibly could have been made accept-
able. Much of the dissatisfaction caused by the computer's operation
is simply due to this one factor -- that of bad printing. Anyone who sees
the printing is completely dissatisfied with it-and it is very difficult for
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employees to work with this bad output. At the present time, this
computer, from a status standpoint, can be assumed to be sub-
stantially below the level of acceptability; so,,therefore, serious
thought must be given to its replacement. In addition, other equip-
ment, such as the card punch and the card reader, has not been
operating satisfactorily. These three items of peripheral input-
output were not built by RCA but were built by contract firms. In
addition, RCA has had no previous experience in this type of equipment.
It is strictly an electronic manufacturer. Due to all of these reasons,
it has developed that this original. equipment for the :'RCA 501 has been
pretty well unacceptable to industry. In fact, as of the first of January
of this year, RCA reduced the cost of this equipment on GSA lease to
one-half its former price. Even at that rate it is unacceptable. The
card punch and reader are used only 16 hours or so per month, yet
they are on lease throughout the entire month. The cost of these units
is $1,174.00 a month for the card reader and $876.00 a month for the
card punch. This is considerable money to pay for only 16 hours of
use throughout the month. These machines do specific jobs, and, if
those jobs can be modified or changed so that the reader and the punch
are not necessary, great savings can be effected. If it is necessary to
use them to accomplish the present jobs, then more jobs should be
placed on this leased equipment so that it will be economically justifi-
able.
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The present combined rental cost. of the reader, punch, and
printer is $3, 801.00 per month. Since the printer is -unacceptable,
the manufacturer has come up with an interim suggestion. That is,
that a new system, involving what is known -as a satellite computer,
be leased.. This small computer has a card punch, a card reader,
and a printer. It is. compatible with the present system and is
known as the RCA 301. For an additional $573.010 a month, or a
total of $4,374.00 a month, it is possible to lease this new equipment.
The RCA 301 does have a. satisfactory printer, reader, and punch.
Thus, it will be able to produce good results immediately upon
arrival. By substituting equipment, it will be possible to eliminate
the problems of bad printing. Since this problem extends to every-
one in the Agency who is a. user of these reports, this additional
$500.00 a month will be repaid in goodwill and in increased efficiency.
The accompanying table shows a comparison of the cost between the
present RCA 501 equipment and the new RCA 301 computer. Although
cost is not an essential factor here, as stated before, it does enter
into the determination. The main thing to bear in mind here is that
the problems of the punch, reader, and printer can be reduced,with no
need to make decisions involving hundreds of thousands of dollars.
This RCA. 301 equipment can be leased subject to. cancellation and, if.
future system studies determine that some other course of action should
be taken, it can then be returned. .
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COMPARISON OF
RCA PERIPHERAL EQUIPMENT
501
Card.Trans. $1,174
(527)
Card Punch 876
(538)
Printer 1,751
(535)
Monthly Rental $3,801
(200 hours use)
Adapter $ 330
(393-1)
Adapter 381
(393-2)
Processor 1,803
(303)
Card Reader
(323)
Card Control
(314-1)'
Card Punch
(334)
Punch Control
(315)
Printer
(333)
Printer Control
(316-1)
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F.. Workload
1. Pre sent
The present workload involves computer operations for
the Logistics,. Accounting, Payroll, Personnel, and Training
components, and production and testing of programs. In.addit-
.ion, small amounts of work have been done for other areas
such as. the Automatic Data. Processing Staff.
The only work that has been placed completely on the
computer is that of the Office of Personnel. Certain. areas
of Logistics and Accounting have been partially placed on the
computer. _ The vouchered payroll is completely on the computer.-
The unvouchered is not on., The idea of using random-access
storage for Logistics has not been carried through. In fact,
the original intent of RCA to provide random access for the
501 -never materialized.
Programming and. the debugging of programs has not been
completed. In. addition,, the present status finds: that there are
many areas still on EAM and still in manual operation in which
no consideration has been given.as yet to placement on. electronic
data processing. The present workload therefore, does not in-
clude the full complete changes-over from electric accounting
machines. In addition, it does not include the follow-on. program
to bring the entire Agency's work on the computer.
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Even with this partial assumption of the Agency's
entire work, the computer is saturated and is running more
than the ZOO hours primary shift. In some months, it has
run as much as. 180 hours beyond the primary shift. The
present status means that with the work being done. there is
a tremendous involvement. Not only that, but in order to
handle the presently accepted load there have been certain desired
functions that have had to be put off until sometime in the future
because of the saturated condition of the computer. One can
say, now, that the present picture is not bright. This is certainly
a true statement.. The status of the computer operation at present,
is one that must be corrected.
the computer than it is now assuming. There are many manual
methods that must go on electronic data processing, and even
at this stage, with only a partial load, the computer is saturated.
There is more-work to be done on
The programming staff has had to program over the past year for
all of the work now being done, and they have been continually
occupied with that task. The question as to whether the present
workload can ever be effectively accomplished by this computer
complex. is one that cannot be solved by this study of short duration
and was not within the scope of this study. In addition, much of
the detailed information as to actual times have not been available
because of certain security restrictions. It is felt. in this
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status report that the present amount of work can be accom-
plished within.a reasonable time. This is based on the fact
that a lot of the debugging of programming has been accomplished
in the last year, on the fact that efficient methods have not been
used, and. on the fact that the input forms and methods. and the
output reports and requirements bear very close scrutiny.
These factors, when taken into account and combined in an effect-
ive manner, mean more efficient operation of the computer facilities
from a time standpoint, resulting in the ability of the present
staff and equipment to complete the desired work.
Z. Future
Future workload of the Agency is generally conceded. to be
more or less stable as compared to today's workload. The work-
load within the computer facility will increase as more of what
is now on EAM is passed. on to EDP and. as. the Agency becomes.
a greater user of machine methods as contrasted to manual methods.
An overall systems study must be done in order to determine
what the fut re- d
v-il].._be since this has n o t e n done in
the past. There has been no projection of what the entire involve-
. .---
ment was to be. There have only been vague verbal references to
a phase two, which would involve putting the entire Agency's work
on the computer. What is involved here has never y be n,..------
deterrmined.I Therefore, the future course of action should be
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to use the present system to its fullest efficiency and optimize it as
much as possible, At the same time, efforts should be
directed toward completing an overall systems study which
is projected at least five years into the future. This study
is the only thing that can indicate whether the present com-
puter facility will be able to operate in an efficient manner
within the next few years. The course of action, to summarize,
should then be to retain this computer, upon which employees
have been trained, until definite deep consideration and delib?-
eration would indicate that it may not be suitable in the future,
G. Scheduling Effectiveness
It has been difficult to assess the scheduling effectiveness of the com
puter because there has not been an orderly system to provide for feeding
data, into the computer or accepting its output. Scheduling, of course, must
be done for a device of this type because every minute counts. In a saturated
system such as this, minutes that are not utilized mean that someone's work
is not going to be done.
In this present system, the major work -has been accomplished through-
out the day and far into the evening by much overtime work. Scheduling has
been done and is continuing to be done, however, it is difficult to adhere
to any schedule when. the users of the computer information are-notfull.y
aware of how a computer facility operates. This is pointed out very clearly
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when many.last minute demands: are made upon the computer, when.
many exceptions are brought forth, and. when. information is not forth-
coming for input. In these cases, it is necessary to shift the schedule.
For this reason, this status study has determined that no assessment
of scheduling activities would be significant at this. time. Only. when
there .is an orderly system evolved can it be, determined how scheduling
may be done effectively. At that time, an. evaluation can be made as to
whether these objectives are being met.. The only thing that can be stated
is the fact that with all of the difficulties that the Automatic Data Proces-
sing Division has faced from the outset, it is the opinion of this study that
they have been doing an. outstanding job in meeting the requirements placed
upon them. They, of course, have not been..complying with the needs of
the Agency, but have been. doing more than will be found in a cross section
of computer activities in general. This is more than, should be required
of them at this. point i.n.the: development of the system.
H. . Users.$ Reaction to Computer. Services
There has been much dissatisfaction throughout the. Agency with the
entire system.. This study was. performed within the DD/S and the dissat-
isfaction.was found. mainly in these areas. It is only by hearsay that we have
been. apprised. of some of the thoughts throughout. the rest of the Agency.
The major drawback with the computer has been.the fact that reports seem
to be coming out slower, the people are unable to get certain reports that
they want, certain. reports are not in the form that. is desired, and people
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are required to fill out certain.input forms that they don't like. In
additions they feel that their systems are not as flexible as they were
before and they also feel that they don't have the control that they had
before.
Many of the users do not understand that a computer is a limited
tool and, therefore, expect their work to be done instantaneously,,
Many of the people are not fully aware of the computer's limitations,
and do not understand why information must be in a.certain form in
order to be acceptable as a computer input.. There is a misunderstand-
ing concerning the fact that a computer cannot make output suitable for
each and every person's needs. Very few of the people within the Agency
have training and background In.compu.ter-oriented systems, and most
of the people seem to feel that something is wrong with the overall layb ei?h.
Some blame it on the computer,. some blame it on the system, and so e
blame it on both. There definitely is misunderstanding between various
argas. The Office of Logistics feels. that they may be left out of full con-
sideration. and that the Comptroller? s Office will get first use of the com-
puter since the computer is in that office. On the other hand, the Office of
Personnel which is also outside the-Comptroller's Office has been receiv-
ing good service. The Office of Personnel, however, feels.that they would
.like reports in different methods of arrangement. They also feel that
they need additional reports, however, they do not realize that a.computer
can .only. run .one report at a time and, they often .are upset because they
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cannot get their information exactly when they want it. There has
been.nothi.n.g observed by the members of this status. team that would
indicate that the users cannot be satisfied.. There is no reason whatso-
ever why an orderly system cannot be evolved which will satisfy the
majority of people. In addition, when there is a general understanding
of what the computer system is all about and what the costs and involve-
ments are in producing reports, changing forms, making exceptions,
and. so forth,. they will be satisfied.
I, Summary
This status study hasp
(1) Evaluated development of the system to. date,.
(2) Ascertained the system's lack.
(3) Determined the misunderstanding resulting from the computer
and electronic data processing system
(4) . Discussed the equipment problems
(5) Demonstrated the need for management by exception, and
exception reporting
(6) Delineated large problem areas in flow of information.,. input
forms, and output reports
(7) Shown. areas of inefficiency and-error
(8) Indicated a definite lack of communication
(9) Indicated the great effort among employees
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(10) Concluded that everyone wants a change now
(11) Presented flow charts and details to indicate the present
status and. operation of this system
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X. RECOMMENDATIONS
A. First and foremost is the recommendation that an overall
systems study be completed in order to permit development of
an effective, orderly system.
B., It is recommended that the detailed study be made,by a com-
petent team formed of members who know the intimate work of
the Agency and also of members who are aware and. conversant
with systems of this type.
C. Complete flow charting of the entire system should be accom-
plished,
D. Portions of this system that are suited. for electronic. data proces-
sing should be placed. upon a. computer,
Ca , It should be determined if the present computer is suitable
nd whether it should be retained,
F. The. need for additional or replacement computers should be
determined.
G. New peripheral equipment should be obtained as soon as possible
to alleviate the difficulties presently encountered in printing reports and
in punching and reading cards. It is further recommended that all. forms
and reports be studied.to see whether they can be streamlined, optimized,
and reduced in number.
Ho Unnecessary equipment9 such as the Da-Span, should be taken off
of lease.
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I., A systems indoctrination for personnel should be initiated
and directed toward the specific needs of the Agency.
J. The entire concept of data processing should be examined apart
from considerations involving,the saving of money and the reduction
of personnel.., The proper consideration must be that of evolving
the. most suitable operating system .for. the specific, unusual needs
of this particular Agency.
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