Now the Office of Tomorrow

By Christopher Byron

Technology's dazzling breakthroughs shake up the white-collar world

In the international money transfer department of New York's Citibank, 50 people sitting before desktop computer terminals silently tap away at coded keyboards and thereby handle the work that it took 430 people to perform in 1970.

In Minneapolis, executives of the Control Data Corp. hold a televised conference meeting with other company officials in Sunnyvale, Calif. Whenever someone writes on the electronic "blackboard" in Minneapolis, the information automatically appears on a terminal screen in Sunnyvale.

In Stamford, Conn., and Palo Alto, Calif., two secretaries of the Xerox Corp. use electronic mail computers to swap and file memos from their bosses, thereby reducing to a minute's time a chore that previously would have involved typing letters and sending them coast to coast.

Scenes like those, while not yet as commonplace as the coffee break, are rapidly changing life at the office for millions of Americans in businesses of all kinds. A quarter-century after companies first began installing huge data-processing computers to print payrolls and keep track of sales, smaller and much less expensive computer-based equipment is beginning to revolutionize and streamline corporate administration and management. In the process, the people and the machines are vastly improving productivity in one of the least efficient segments of American business: the office.

No aspect of modern corporate life is immune to the onrush of computer technology's latest tools. In Boston, John Hancock Mutual Life Insurance Co. has provided word-processing terminals for more than 100 secretaries and other clerical workers. Since January productivity for the employees has jumped by an astonishing 50%.

In Los Angeles, Atlantic Richfield Co. is designing a complete "teleconferenceing" network so that key company employees can confer with one another visually by use of satellite hook-and wall-sized projection screens. Starting in 1982, executives in Philadelphia or Dallas will not have to fly to Los Angeles for their regular weekly meeting. Instead they will walk to a room equipped for a teleconference. The system, part of a $20 million company-wide communications effort, is expected to save the company $50 million to $60 million annually in travel costs.

The office of the future is not limited to the corporate giants. In Glendale, Calif., William Fusco, president of Hydraulic Industrial, a small-scale supplier of pipes and valves to local industry (1979 sales: $2 million), has spent $65, 000 on a mincomputer system that enables his 22 employees to monitor and control every administrative and record-keeping aspect of the business. For example, every time a particular item in stock runs low, the computer is programmed to warn of the decline.

Smaller firms that lack large research departments often use desktop computers to turn a stack of complex statistics into easy-to-read charts. Rosen Research, a Manhattan firm that studies the electronics industry, recently used its Apple II personal computer for such a job. The cost: 40-c- for a graphic illustration, compared with $80 each when prepared by a professional designer.

Office automation is proliferating, in large part, because the costs of "computing power" are dropping dramatically. The calculating capacity of computers costing $1 million in the '50s is today contained in microelectronic circuits costing less than $20. By packing memory and logic functions of actual computers onto pieces of silicon no bigger than a cornflake, electronics engineers and designers have been able to build computer-like intelligence into conventional office equipment. Silicon-chip technology is beginning to spawn such devices as typewriters that can recognize and identify misspellings, copiers that can memorize, store and retrieve documents, and dictation machines that can translate a spoken message into a typed page.

Many companies are even working to hook up their so-called smart machines so that they can communicate with each other. One such arrangement might allow a company executive to dictate a memo into a smart dictating machine that will then distribute it, electronically, to offices around the world. Copiers linked to teleprinters would print and duplicate the memo, route it internally as well as "file" it in the electronic memory banks of field office computers.

Despite some initial grumbling that the new machines would turn them into white-collar automatons, secretaries and clerical people usually welcome the appearance of a word processor or minicomputer console on their desks. Betty Mates, 31, a Citibank clerical worker for close to 13 years, now uses a Digital Equipment Corp. minicomputer in the bank's letters-of-credit department. Says she: "The department used to be chaos. One letter would get handled by four, five or six people. But with the new system, one person handles everything. I had no trouble adjusting. To me it was like a new toy."

The biggest stumbling block to the use of the futuristic equipment is the boss. Says Francis G. ("Buck") Rodgers, IBM's vice president for corporate marketing: "The office has not changed its essential procedures for over 100 years, and particularly the professionals become a bit wary when anyone tries to change what goes on." Managers have been reluctant to use the new machines, especially if they involve a keyboard. Says Phil Roybal, marketing manager of Apple Computer Inc.: "Most managers wouldn't have a typewriter in their office. A lot regard a keyboard as something that doesn't suit their status."

But relief is on the way. Several companies are working on voice-operated terminals so that bosses can transmit information by literally talking to their computers. International Resource Development Inc., a Norwalk, Conn., market research company, predicts that such machines will be available by 1983 and in general use by 1989. Other experts say that executives will soon be able to operate a machine simply by touching it. An executive wishing to see his morning mail might only have to tap a picture of an In basket displayed on his screen. Doing so would tell the computer to print out on the screen whatever morning mail the executive had waiting for him in the computer's memory bank.

The companies designing and producing the high-technology components of the business office of the future are prospering lavishly. Sales are already approaching $30 billion annually and are expected to leap to nearly $100 billion a year by 1990. In addition to such giants as IBM, Xerox and Honeywell, the field is filling up with a host of newcomers. flush with billions in oil profits, Exxon Corp. has entered the market with its new unit, Exxon Office Systems Co., which is manufacturing and selling a range of desktop word processing devices. The company's QWIP transceiver sends and receives over regular telephone lines facsimile reproductions of charts, graphs, text or just about anything else that can be put on a page.

A number of smaller companies offer equally sophisticated gear and are enjoying growth rates of 30% or more a year. Datapoint Corp., Digital Equipment Corp., Prime Computers, Inc. and Data General Corp. are all leading suppliers of minicomputer designs for small-to medium-sized businesses. Massachusetts' Wang Laboratories is a leading manufacturer of word processors. One new small word processor company based in Boulder, Colo., calls itself NBI, which stands for Nothing But Initials. The hottest new firm of all, Apple (1979 sales: $75 million), is not yet five years old and plans its first public stock offering before year's end.

The office-equipment industry is getting its bounce from American businesses's rush to cut costs and boost productivity. The most unproductive workers in many companies today are office employees and executives. Between 1972 and 1977, blue-collar productivity grew by more than 2% annually, while white-collar efficiency increased by only .4% a year. In the U.S.'s service-oriented economy, the paper chase of the American office is already tying up 25% of the nation's work force, and by 1990 the figure is projected to rise to 40%. The number of workers entering the labor market will decline during the '80s, and by the end of the decade there will be perhaps a 10% shortage of office employees. Without machines to help them, white-collar workers will not be able to obtain and use all the information needed to run modern companies.

Spending by businesses to modernize the office, however, has so far been extremely low. Each American farmer works with an average of $52,000 worth of such labor-saving machinery as tractors, combines and milking machines. The average American factory worker is supported by about $25,000 in capital investment in everything from computerized assembly lines to forklifts. Office workers, on the other hand, are aided by a paltry $2,000 in capital investment; that often amounts to little more than a telephone, a typewriter and a photocopy machine. Such offices will soon be as antique as those with stand-up desks and quill pens.

--By Christopher Byron.

Reported by Robert Geline and Sue Raffety/New York

With reporting by Robert Geline, Sue Raffety

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