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L. R. SHEELEY
Thank you, Ronnie, you have established the theme of our meeting, Frontiers of Progress. We are truly on the verge of a revolution. ...the information handling revolution. The frontier. ..this expanding frontier... is unfolding before us. It is this frontier that we will be talking about for the next four days. Exploring with you the boundaries of the frontier and the many methods and plans available to us to push back these boundaries. The past years can be described as years of change. No one knows that better than you. The future, however, is not static. Change is inevitable in a dynamic industry such as ours. Changes to meet the expanding frontiers. Changes to meet the challenge of competition and changes to meet our volume objectives. As a matter of fact, you should be proud that your organization is capable and willing to make changes. It proves that our department and its management is dynamic. ..flexible. Flexibility is essential in this fast moving business. ..the keynote of success. The ability to move fast and turn around in a hurry. This is flexibility. You will see and hear much in these next few days. ..much that will contribute to your ability to represent the General Electric Company and the Computer Department. You will see examples of our flexibility. ..our ability to turn on a dime. We are sure some of these examples will surprise you. Some may even amaze you. But all are for your benefit. All will contribute in one way or another to the achievement of our and your objectives. We have mentioned the flexibility inherent in a small business. ..the Computer Department. We have not mentioned stability. ..the stability of the General Electric Company. This is a definite advantage that none of our competitors enjoy. The flexibility of a small company with the stability and resources of a very large company. You are going to hear much more on this subject from Paul Chamberlain, our Department's sales consultant.
P. L. CHAMBERLAIN This introduction reminds me of a three day symposium on communications that I attended about three years ago. Bill Merrihue of marketing services opened the meeting by telling us of a friend of his who had a very large, very virile, tom cat. He said that this tom cat spent every night tom catting around the neighborhood and causing quite a disturbance. The friend decided that this could not continue, so he took the tom cat to have him altered. Some two or three weeks later Bill met his friend and said, 'I assume that your cat now spends his evenings at home quietly by the fireside?' In which his friend replied, 'Like hell he does, he's out with the other cats every night serving as a consultant.' At which point Merrihue introduced his consultants. So now you know just what a consultant is. Seriously though, I have functional responsibility for advice and counsel in the areas of product and market development, sales and distribution channels, sales incentive compensation plans, guidance to sales managers in the technical aspects of their positions. When I came here in January, Bob Sheeley placed no.1 priority on the study of our government sales setup, both at headquarters and in the field. After checking into what we had in place I made eight recommendations which were as follows: Page 4 1. Transfer responsibility for the general sales activities with all government agencies to the field sales organization. 2. Transfer present Washington D. C. personnel to the field sales organization. 3. Transfer Huntsville representative to the field sales organization and consider Atlanta as the base of operations. 4. Set up separate quotas for government business for each region and each district manager and salesman who has assigned government customers. 5. Set up manpower to cover government customers in all regions. This responsibility may be at least' in part assigned to present personnel, on either a part or full time basis. 6. Realign the headquarters sales unit
as follows: 7. Establish an application engineering group in the headquarters sales unit. The original group to consist of: 1 senior application engineer, two application engineers. 8. Appoint an acting sales manager. These recommendations were approved and some of them have already been implemented. The others are in the process of implementation. Another activity on which I have spent a great deal of time in the last three months has been the planning for this sales meeting. I have already done considerable collecting of information on current incentive compensation plans, both inside and outside the company. This in turn has lead to plans for a rather complete market study and survey about which you well hear more from the next speaker. I have recently concluded visits to a number of sales offices in the central and eastern region. I had a very frank exchange of information and ideas at all locations and I think that you will find some things taking place as a result of this trip. Other field trips are planned for the near future. In talking to many of you in Phoenix over the last
several months and also on this field trip, it was quite apparent many of
you are new to General Electric or to the Computer Department, or both.
I feel that many of you do not fully realize the strength of the General
Electric Company, and I hope that during this four day meeting you can
align your thinking in terms of General Electric versus other computer
manufacturers rather than the Computer Dept. versus other computer
manufacturers. -
This slide is one indication of what I am talking about. This is a tabulation of the fifty largest manufacturers in the United States. It shows General Electric in the number four position surpassed in size only by General Motors, Standard Oil of New New Jersey, and Ford. In going through this list I find the next computer manufacturer, RCA, is in twenty-fourth position, while IBM is in twenty-seventh place. Sperry-Rand is thirty six. There are no other computer manufacturers in the first fifty and I have not gone further in the descending list to locate the others. So that we all may have an up-to-date picture of General Electric's size and resources, I am going to talk from some slides that were used by Mr. Cordiner at the April 26th share holders meeting in Syracuse. Since the end of World War two your company has moved from a centralized company to a decentralized modern organization of 113 different business units, each with its own seasoned management team and meanwhile we have developed a sound structure, patterned to fit our five major market areas, consumers, industry, electric utilities, government, and international market in the decade since 1950 we have grown from 129 manufacturing facilities in ninety-eight cities in the United States and Canada to a hundred and sixty eight manufacturing facilities in a hundred and thirty four cities plus an expanding network of manufacturing and sales facilities around the world. Sales doubled in the same ten years growing from two billion dollars in 1950 to over four billion dollars annually in recent years. The physical plant has been almost completely rebuilt meanwhile at an investment of approximately one billion, four hundred million dollars since 1950. Today our company has the capacity in place to produce at the rate of six billions dollars worth of products efficiently and profitably. But greater than our change from centralization. ..greater than our modernization...greater than our growth in capacity. ..is our basic change from a manufacturer of tradition electrical equipment to one of the most diversified product manufacturing businesses in the world. It is as though we had built a completely new General Electric side by side with the old one. The new one working in the new fields of space, atomic energy, of jet engines, gas turbines, electronic equipment, chemical and metallurgical products, missiles and of course, computers. Your company has advanced through this period of radical Page 5 change not only financially strong but well able to finance profitable new ventures and with foundations for constant growth in the most exciting new areas of economic development. Today your company is not simply growing within already established industries. It stands at the advanced outposts of the most complicated technologies of our time. There are very few companies in the world that could even attempt to solve some of the fantastic technical problems posed by space exploration or development of nuclear energy, for example. But General Electric can solve such technical challenges and develop new businesses from them. I have mentioned the company's exciting new business developments. They are expensive ventures, in some of the most advanced technologies of our time. But these are the coming sources of economic growth, new employment and greater profits. They include such advanced technical businesses as atomic energy, fuel cells and other power sources, gas turbines and jet engines for commercial use, computers and information handling systems; automation of industrial, commercial, and government operations; modern electronic components such as transistors, diodes and micro circuits; exploring the business potentials of thermoplastic recording; desalting of sea water, and space vehicles for scientific military and commercial purposes. In addition to the domestic market the international markets are increasingly attractive because they are in many cases growing even faster than the United States markets. In 1960, the company's foreign sales including exports, Canadian General Electric, and foreign affiliates amounted to six hundred million dollars. By the middle of the 1960's, this will be a billion dollar business and that is only the beginning in a world that is electrifying as fast as it can. Today we have plants in twenty-one countries, truly 'the sun never sets on General Electric'. We have a number of basic strengths which will enable the company to rise above the present sales rate. There is, first of all, the strength of our superb body of employees, perhaps the most creative team in history. We have a quarter of a million skilled and productive employees, including 37 thousand college graduates of whom 26 thousand are scientists and engineers. These employees are organized into 113 business departments and the research oriented functional services. Each under the experienced leadership of seasoned managers. Some of the departments are a quarter of a half the size of the entire General Electric Company twenty years ago. We have at our disposal 108 million square feet of completely modern manufacturing and laboratory facilities, most of it built or equipped since World War Two. In 1961, 160 million dollars more will be invested to modernize and expand these facilities. Your company has an established market position in every segment of the economy here and abroad including consumer, industrial, commercial and government markets. Thus, it has the channels to establish new ventures quickly and soundly.
General Electric has ample financial resources to develop profitable new markets and product lines and handle any other financial needs that may emerge. The company has, as a consequence of this diversity, a unique capability to produce completely engineered systems, not merely individual components and products, for industry, electric utilities, national defense, commercial and residential installations and for municipal services. Such engineered systems enable us to sell many of the company's products at one time to the advantage of the customer as well as General Electric. As I mentioned earlier, these slides and much of the accompanying script were lifted directly from Ralph Cordiner's talk at the share holder's meeting. I have taken your time to go over this because properly applied, these customer resources and contacts can be a great source of strength to you in the sale of computers. You have already seen the influence that can be exerted at the proper time by our financial people in the field of banking. In the next few days you will hear from the man who heads up the defense field operation, who will talk to you about the help that they can give in contacts with the government. You will hear from one of our better known Regional Vice Presidents who will discuss their function. And you will hear from the man who directs our advanced management school at Crotonville, from Harold Strickland, our Divisional Vice President and a member of the office of the president. I believe that these people and the other speakers will; give you a whole new dimension of the company and how it compares with our competition. In closing, I would like to tell you one of the few computer stories that I have run into. It has to do with an old line army colonel of the 306 and bayonet school. It seems that his staff had been trying to get him to consider a computer for several years, but had not gotten very far. Finally, during a recent computer meeting in Washington the staff persuaded the colonel to attend and they eventually got him over to a GE 225 that was on display. And after a good deal of discussion they finally persuaded the colonel to ask the computer a question. The question he asked was 'where is my father?' The answer came back.. .'Your father is in Alaska.' The colonel snorted and said that he knew these machines weren't any good. 'My father is dead.' Wayne Wright who was in charge of the display was quite perplexed, but finally suggested that the question be rephrased to 'where is the colonel's mother's husband.' This time the computer came back with. ..' the colonel's mother's husband is dead, but tell the so and so that his father is still in Alaska. ' Page 6
O. K. LINDLEY
As many of you know, since leaving the Eastern Region I have been assigned the job of manager...Sales Analysis and Planning which is a sales subsection function reporting to the manager of sales. So much for titling, and what it is worth. ..what does it really mean. Very simply, it means planning, organizing, integrating and measuring... good old Crotonville poim. " even though I express this as simply it is basic to every detail of this function. As we all all know, the sales organization is a major contributing activity in the achievement of the department's objectives for volume, market position... that is percent of available... and profitability. The sales objective is to sell the maximum quantity of the product or service through the most efficient sales and distribution channels within the planned selling expense. And since sales volume does not always vary in direct proportion to selling expense, the sales sub-function must determine the relationship of selling expense for various levels of sales volume to be considered by the manager of marketing in establishing volume and permitted selling costs objectives. Now, let's first talk about sales planning. One part of sales planning involves the formulation of sales objectives, specific plans and policies by product, market and customer required to carry out the overall marketing plans of this department. Another part involves plans and programs designed to stimulate the selling organization and to keep enthusiasm high. To do this function, it is necessary to formulate sales volumes objectives in appropriate detail, that is, by product, market, trading area, customer, channel of distribution and individual salesmen, if so desired. It also includes the formulating of market participation objectives, percent of availability in appropriate detail, and determining the proper sales approach by product, by market and by customer We must also determine the optimum sales effort manpower, that is manpower and expense, required to meet these various sales objectives we must recommend or changes in sales channels within and outside the department. We must formulate plans and timing for seasonal campaigns, special sales activities, special local promotions, timely well planned sales meetings, both at headquarters and in the field and introduction of new product lines and models and product specialists meetings, as well as possible incentive compensation plans. Another important function involves the development of merchandising plans with the help of advertising and sales promotion, as well as integrating the plans of the marketing sub-functions with the sales plans and programs for the department. I believe I have defined and described the sales planning function, now let us talk for a moment in the sales analysis area. Here in this function we analyze the available business and sales results by markets, industries and customers, including location. In order to do this we must evaluate product acceptance and position on the growth curve, and at the same time, constantly be appraising new uses and applications, analyzing competitive practices, determining customer buying habits and trends, appraising selling practices and trends, surveying customers on results of sales campaigns and promotional programs. The data resulting from this sales analysis work is necessary for the development of the sales and marketing plans, including the assignment of manpower, location of field sales personnel as well as recommendations for product planning, advertising and sales promotion, sales and distribution channels, market development activities and sales methods. This sales analysis work, you will see, requires the necessary assistance from marketing research and integration with product planning studies. So much for what this job function will contribute in your overall, everyday work assignment. Now, let's take a closer look at what has actually been accomplished, and is underway to your benefit. For the first time in our department history, and as of January 1st this year, each of the respective three regions had their commercial orders received budget as well as their commercial and administrative expense operating budgets, and since that time, for measurement purposes, the regional budgets have been broken down for each of the districts, both as it pertains to orders received and their C and A operating budgets. As of May 1st the Regional O/R Budget has been increased by seven million dollars. ..1.5 million to Western. ..1.5 million to Central. ..and four million to Eastern. This increase represents the government and military portion of our business for 1961. I had to laugh the other day when reviewing the monthly sales report of one of the unit managers who had been traveling the districts recently. He made the statement to the effect that the district people were unhappy with their budget of orders received and unhappy with their operating expense budget. This is a healthy situation and indicates we have done a good job. The report went on to say, however, that they expected to exceed both. By far the majority of the time and effort has been devoted to field Page 7 personnel work consisting of organization, budgets, placement. When it comes to the placement of people, a few of us back here at headquarters feel as though we have been playing with God, but at the current date there is every indication that the respective regional managers and district managers are now beginning to take over from a recruiting, hiring and placement of people within the various district areas. Since we are talking personnel we should understand that personnel budgeting is fundamentally based on marketing strategy. Therefore, this budgeting will be done as a part of this function, reviewed with the regional managers, and implemented by all contributing groups. I am sure you will be interested to know that we have started and assigned eight men, representing about a two man year effort, to make a very detailed study as it pertains to both sales analysis and sales planning in our planned prime market area which are. ..banking, electric utility (but not gas utility or telephone) aircraft and missile and federal government (USAF, USN, and non-military) electrical-electronics, petroleum, chemical, steel and automotive insurance service, research and consulting organizations and computer service bureaus. The main areas of investigation in each of these markets will be: definitions of industry studies, participants in industry factual description of present information handling needs, present computer applications, anticipated future customer needs, industry as a market for computers, identify important potential customers for computer department. This study of prime markets areas is, as you can see, quite detailed and since the study will be developed to the finest point geographically speaking, we expect the final results to become the basis for better marketing strategy. Better marketing strategy which will accomplish. ..consideration of incentive compensation better placement of personnel, opening of strategic new offices, positive approach for direction of your pre-sales planning and efforts enabling you to properly assign sales responsibility by type of customer by geographic location. Aid in better selection of type of customer you will concentrate on with what product offering. Another example of thoughts and efforts in your overall behalf, you should have received at your regional and district locations by this time, a complete complement of framed pictures for you respective offices. Another small item of annoyance I hope will have been licked shortly, and that is your time clock card reporting. Of course, intermixed in all of this is the individual requests from you respective people in the field, particularly the Regional Managers and the District Managers, wherein you come to either Bob Sheeley or myself for information requiring effort on our part to better enable you to perform your sales functions in the field. You should all realize that we people back here in headquarters are at all times thinking, working and performing with your uppermost interests in mind, enabling you to do more direct selling, which is your prime responsibility. At the same time, you must realize that whether it be timeclock routines or framed photographs, and because of the fact that many other functions and people are involved it all takes time. If I can, in this small allotted time, impress you to the point that you will leave here and return to respective locations with the factual impression that we are planning and producing for you behalf, then my turn here on this podium has been accomplished. Yes, we admit that there are any number of things pertaining to personnel, market analysis, advertising, sales promotion, product planning, as well as many other areas which need to be looked into and bettered from your standpoint. We wish to assure you that given enough time and enough pills for blood pressure, metrecal for overweight condition, milk of magnesia for ulcers, these jobs will be done.
L. W. GOOSTREE
How a New Product Is Born The General Electric Company is in the business of manufacturing and selling some 200,000 different products every working day of the year. The products range from toasters to turbines; lamp bulbs to jet engines; man-made diamonds to plastic table tops. With this gamut of products you may wonder how the company can ever come up with new products. The answer is simple in addition to manufacturing and selling products. The General Electric Company is also in the business of invention. Page 8 General Electric has long been a leader in this industry of invention. According to government patent records it is the most inventive company in the United States and probably in the world. It has more than 30,000 patents to its credit. That is an average of about one patent per day for every single day of the 83 years General Electric has been in business. Today it is almost impossible to glance around you and not see a product in which the General Electric Company has had some influence and yet it continually comes out with new significant and sometimes startling products. Let's consider why this is so. Consider, for example, that General Electric spends more money in a year on research and development than it earns in profits. Consider also that of its some 1/4 million employees, more than 37,000 hold college degrees, and that more than 26,000 of those degrees are in engineering and the physical sciences. And then consider that more than 1,000 of those degrees are doctorates. It all adds up to this: in every area of technology and science related to the company's activities. ..whether in nuclear physics or chemistry electronics or metallurgy...General Electric is able to call upon a huge reservoir of technical skills and -experience that is unsurpassed in industry. Where are these skills? Many of them are in engineering groups among the more than 113 product departments across the country. Many more can be found in the forty major laboratories throughout the company that are devoted to research and development in many different technologies. In addition, thousands of specialists throughout the company are showing that savings can be effected, costs lowered, and the conduct of business improved through the application of research methods to engineering manufacturing , marketing, financial activities, and the company's relations with its employees and its public. All of these activities contribute to new products and new areas of activities for the General Electric Company. The research laboratory at Schenectady is devoted to pure research where scientists are encouraged to explore any area of interest. From this laboratory have come such significant developments as methods for using Tungsten for light bulbs; the X-Ray tube; Alnico Magnets; man-made diamonds and thermoplastic tape. The General Engineering laboratory at Schenectady is credited with much pf the company's early work in computers, talking movies, electro-cardiograph equipment and thousands of specialized instruments ranging from A as in amplistats to Z as in zymometers. Man-made diamonds is an excellent example of how a product is born. Announced as a research development in February 1955, the making of diamonds was the result of more than four years of intensive research. Examining various materials subjected to combined high temperature and pressure during this research, special techniques and equipment were developed to maintain for the first time temperatures above 5,000 degrees Fahrenheit at pressures in excess of 1,500,000 pounds per square inch. Following announcement of diamonds, more research went into the product and little was heard of the results. However, 33 months after the original announcement, the metallurgical products department announced it was in pilot production. During this time General Electric had invested $2.5 million in research and facilities. Today the metallurgical products department is in full production of diamonds for industrial markets. Recently I read where the man-made diamonds were being introduced to the consumer market as needles for Hi-Fi sets. Man-made diamonds is just one example of how research and development has paid off for General Electric. Between the original development and the pilot production, however, much effort was expended in product planning, marketing research, and applied engineering before the laboratory development became a practical and marketable product. A good example of a basic research development which has not yet reached the marketable phase is thermoplastic recording many of you are familiar with it. There are hopes that this development will someday be used in the products you are selling. .. computers. Thermoplastic recording was announced to the press in January of 1960. TPR, as. it is called, is described as a technique combining 'the processing speed and much of the versatility of magnetic recording and the storage capacity of photography while offering some advantages over both of these systems. Initially, the research laboratory, the chemical development operation and the electronics laboratory are working on the special tapes used in the process. The General Engineering Laboratory is investigating applications which could contribute heavily to world technology. And, our own Computer Department Advanced Development Laboratory, as you will hear, is studying applications for computers. The Industrial Electronics Division has been assigned responsibility for developing recording and play-back equipment for commercial application of the new technique. To date, thermoplastic recording is only an infant, and its commercial applications will come about in the future only after considerable development work. The effort will include more basic research, many hours of applied research, much frustration by product planners, arguments among practical engineers, and slowly but surely, products incorporating the development will reach the marketing phase, where you will become involved. We realize, of course, that General Electric does not have a monopoly on research and development. Competition is also becoming more able and Page 9
more aggressive, and we cannot expect success to come automatically. The paths into the future will be marked by accelerating technological obsolescence, as heightened competition between companies and countries places a premium on the ability to develop new products and processes. However, using previous experience as a guide, the company expects that at least one-third of the products General Electric will be making in the 1970's are now either totally unknown or are simply. ideas in the minds of the men working in the company's forty major laboratories many of these ideas will apply to future products of the computer department. For example, in 1963, 72 per cent of the orders received for business and scientific systems will be' for products not now available. One year later, in 1964, the percentage will have risen to eighty-four per cent. Meanwhile, we will not be forgetting our current product line. We are accelerating innovation and emphasizing better customer values. The computer industry presents a challenging opportunity for General Electric to intensify its traditional innovative efforts, enhance its productive performance and step up even further its competitive vigor. Over the next four days, you are going to hear about the various steps the Computer Department is taking to assure creative innovation, productive performance and competitive vigor. We are proud of the team we have developed, and are continuing to develop a team that is experienced not only in the evolution of new products and new businesses, but also in taking a pioneering approach to every function of the computer business. We intend to intensify our efforts against major competitors. ..in every phase of the department's activities General Electric is not new to the struggle against major competitors. We have never had the market to ourselves but have always fought hard against some mighty tough odds to become leaders in such areas as the vacuum cleaner market; the major appliance market; and the communication market, to mention a few. We are going to put up the same fight in the computer market. Whether we can accelerate or even maintain our present rates of growth will rest largely in getting your wholehearted support and cooperation. Success will depend upon how the market-place evaluates our products and your services. The entire department is with you every step of the way. The products we now have are proven. We have made competition sit up and take notice and in some cases, have made them realize that the top is a slippery place. With the many new plans and products you will hear about during this meeting, we have every confidence that you will help General Electric rise to its responsibilities and opportunities in the computer industry.
Dr. C. F. Spitzer The charter of the Computer Laboratory states that is is this Laboratory's function to supply to the Department new technology and to recommend areas for advanced development. As seen in Figure 1, the Computer Laboratory reports to the Manager of Engineering and its personnel currently represent about 16. 5 percent of the Department's engineering staff. The names of the laboratory's support technical units and their managers are shown on this organization chart. Eighteen personnel represent the technical and administrative support functions. In addition, five employees reporting to other department sections are assigned to the laboratory as local representatives of General Accounting, Materials, and the Patent Operation. The technical staff consists of about fifty. The present distribution of professional training is shown in Figure 2, together with our tentative long-range goal. Operating experience will teach us, whether these goals will require later modification. The currently planned expansion of the Computer Laboratory is shown in Figure 3, At the end of 1961 the total staff should be about 100, and continued growth at about thirty per year would bring us near 300 by about 1970. Figure 4 shows a forecast of budget and overhead rate. With staff increase must, of course, come an increase in physical facilities. Currently we are housed in a 20,000 square feet rented building in mountain view, California (Figure 5). A second rented facility less than 100 feet away, was occupied on May 1, bringing our total space to about 20,000 square feet. Approximately one year from now, our permanent facility in the Sunnyvale International Science Center should be ready for occupancy. Its 36,000 square feet on 5.6 acres of land are designed to accommodate at least 150 personnel, and will therefore be adequate until mid 1963. Space is provided for a computer, and for its service personnel (Figure 6), Total cost for the fully equipped facility will be about $1.5 million. Page 10 It is essential, to frame laboratory projects against the background of product plans, applications experience, product engineering readiness, and manufacturing capability, in order to maintain realistic coupling with the non-laboratory world. On the other hand, it is the laboratory's further obligation to broaden the scope and vision of our market-place oriented organizations. These functions could present impossible tasks to our relatively small laboratory, and are made possible only through very close coordination of our own work, with that of other company laboratories. This coordination is particularly intimate with the computer system and oriented components of the research laboratory, the General Engineering Laboratory and the Syracuse Electronics Laboratory. Information is freely exchanged, and fairly frequent visits ensure friendly relations based On mutual respect, giving us the confidence that comes from knowing that the research and development strength of the entire company stands behind us. Figure 7 shows, in terms of visitors to the laboratory, the intimacy of our liaison with Phoenix personnel and with the rest of the company. The trend toward more frequent contacts in(is?) unmistakable, and hopefully it is a sign that, before very long, we will have taken our place among the outstanding company laboratories. We feel pleased and honored that this attention has become as regular pattern, and we sincerely hope and expect that it will continue. The division of our effort is such that about 70 percent of the work is aimed at the satisfaction of recognizable short... or long-range product engineering needs. The remaining thirty percent are of an exploratory, or research nature. In both categories, we draw heavily on the ingenuity, Imagination and advice of personnel in Product Engineering, Manufacturing, and Marketing, and of others, outside the Computer Department. We do not by any means believe that only ideas developed by laboratory personnel are worthy of further consideration. It is a widely-recognized observation, that the output of laboratories requires, in general, a considerable Product Engineering effort before becoming a manufacturable product. Indeed, the words: 'another worthless idea, if we had not taken it over' are product engineering by-words known to almost anyone who ever worked in a laboratory. I have, after these many years, arrived at the conclusion that this comment is in reality a significant compliment, on one hand, laboratory projects not ultimately taken over by Product Engineering would, in fact, be worthless to the company. On the Other hand, a laboratory should not carry its developments so far that they require no further Product Engineering. The Computer Laboratory is no exception to this rule, and we attempt to keep the Product Engineering subsections carefully informed of our progress. Every three months we formally present the laboratory's developments to Phoenix personnel, and we receive a return visit of the Product Engineering subsection managers during the interval. Many other contacts outside these formal presentations supplement the information exchange. It is, of course, the function of the Computer Laboratory to serve first, foremost, and above all, the needs of the Computer Department and of the process computer section. However, as frequently pointed out by our Division General Manager, essentially all the Division's work relates to the processing of information. It is to be expected, therefore, that the results of the laboratory's efforts should be made promptly available to the other departments of the division. For example, we have scheduled a conference of the division's Managers of Engineering for next month, to share our latest understanding with them and to learn, in turn, about their own advanced developments and development needs. Conversely, we have much to learn from the computer users in the company: for example, a seminar held last month at our laboratory, of. the company foremost computer experts, has helped us greatly in forming new concepts for future systems. Copies of our monthly status reports go to key mangers, within the division and in the centralized company laboratories. Since the computer field encompasses aspects of all physical sciences, and their related technologies, it follows that the laboratory's work covers a wide range of scientific activities, in its four technical units. The advanced circuits unit actually concerns itself equally thoroughly with materials development, device fabrication, and circuits research typical projects relate to the study of electroluminescent phosphors and photoconductors for display devices and logic elements; thin magnetic films as very fast memory devices; cryogenic materials for potentially very small and inexpensive computer elements; tunnel diodes in novel circuit configurations; and research and development on transistor logic circuits operating significantly faster than any currently marketed computer. The problem of evaluating the systems aspects of new components is assigned to the special projects unit. Their work is concerned with the logic potential, of such new elements as tunnel diodes, cryotrons, lumistors, etc. Components technologies of the future will take the form of integrated electronics, and relatively large circuits will be fabricated in a single sequence of processes. The problem of yield will then be of foremost importance. A small effort is, therefore, devoted to the problem of improved yield through logic design. Optical information processing techniques will be of the greatest importance in future computers, and one such system is currently under evaluation. It may have a significant impact on future computer design schemes. The earliest pay-off from any of the computer laboratory's work may be expected from the computer organization unit. This group has already contributed significantly to the department's present product lines, by proposing superior organization concepts. It is highly probable that a far more competitive machine can be designed by approaching page 11 more efficient utilization of all the equipment composing a computer system, than can be done by designing for higher speeds of operation of its components. Two of our projects are therefore devoted to studies related to improved organization. Another effort of a far more theoretical nature concerns the theory of machines. We hope that this work will culminate in a comprehensive understanding of the behavior of all sequential machines regardless of their codes, programs, or specific organizations. The peripheral equipment unit's work thus far this year, relates primarily to the general problems in optical character recognition. Concurrent with participation in the American Standards Associations work on a successor to the E 13 B Font, this unit has designed and built equipment to read and recognize characters of the new ASA numeral letter font, both by magnetic and by optical means. Other work is concerned with basic problems in optical pattern recognition, and with the use of thermoplastic tape and slides, as high-density storage media. Even though we have, as an advanced development laboratory, been in existence for only about one year, we have accomplished some noteworthy results, summarized in the following list: Transferred Projects Sorter Feeder Computer-Organization Electroluminescence Multichannel Reader Maturing Projects Cryotrons: Site Font Design Significant Progress List Structures Yield Improvement Thin Magnetic Films
This listing is not intended to be complete. On the other hand, some of the projects transferred to product engineering are not to be considered anywhere near ready for manufacturing, let alone sale, and considerable Product Engineering effort will be needed to develop them into products. As projects are transferred, time and personnel become available for new work. Future projects being evaluated for their promise include a new method of character identification, novel high speed memories, and studies of asynchronous logic, to name but a few. Most probably, we will give our particular attention to the problem of non-erasable mass memories, with the initial aim of more than 20,000 bits per dollar of shop cost. Other potential future areas relate to studies in the mathematical identification of industrial systems, man-machine relations, process control computer reliability, and redundancy studies. In summary, let me state emphatically that, as a departmental laboratory, our aim is not the advancement of knowledge for its own sake; but rather, to select our projects carefully and in such manner, that we will at all times serve the foreseeable department needs by receiving our direction from the Product Engineering subsections, while trying to meet unforeseeable needs by making our best possible guesses as to where the 'frontiers of progress' may be in future years. In this manner we shall attempt to carry out our responsibility to you today, tomorrow, and in the increasingly successful years to come. Page 12
R. F. BARNES
Gentlemen.. You and I are part of an exciting team. ...Marketing Research and Product Planning. ..A team that is bringing you one complete new computer system each year for three years. ..A team that is producing unique peripherals. ..document handlers, card readers. ..optical character recognition. ..All to make it easier for you to beat Clair Lasher's orders budget. To show better how you and we fit together to make your future selling more effective, I've arbitrarily broken this presentation into two parts. ...Marketing Research and Product Planning. I say arbitrarily, because both these functions must be and are closely tied together. Both are aimed at answering two questions. What will we make? Who will we sell to? Let's answer the second question first: 'Who will we sell to: Who's selling to them now? And how big is the market? To bring you aboard our Marketing Research efforts, here's Chet Rice.
C. T. RICE
McGraw Hill in this year's Annual Economic Report of the Electronics Industry started out by saying, 'Electronics markets will be untouched by any business downturn this year.' 'Not to be outdone by McGraw Hill, Marketing Research is pleased to say that the same applies to the computer market. In fact, we are predicting a pronounced jump this year in computer shipments.
The first slide shows our last year's forecast and our present forecast of the total electronic computer market growth. This shows a 15-20% per year growth rate, which is a rapid growth rate even when compared to other markets in the fast growing electronics industry.
One interesting feature is the dip in the chart which we detected in 1960. This is primarily due to IBM's transition from tube machines to transistorized machines, 2 years after G. E. Originally, IBM planned on shipping out a sizable quantity of 7070's during 1960. Remember, now, that this machine was announced in late '58 and they started taking orders all during '59 for shipment starting in early '60. Unfortunately for IBM, they ran into some serious technical problems with their first production machines and they had trouble getting the first installations working. At the same time, IBM was phasing out of production of their various tube machines such as the 650, 305, 704, 705, 709, etc. Thus, their factory output was seriously down in 1960. Interestingly enough, because IBM has such a stranglehold on many of its customers, the total market actually dipped and those customers waiting for 7070's were not picked up by the rest of the industry.
Page13 Note also how our forecast goes up in 1961. This is due to expected large shipment of 7070' s, 7080' s, 7090' sand 1400 series. ..all transistorized computers well into production. Now that you have a good picture of the growth rate of the overall computer market. The next slide shows how it splits up into the top 15 user industries. This analysis was done on a little different basis than actual computer hardware shipments as shown on the previous chart in that this one shows cumulative orders received for computer hardware since the computer industry began in the early '50' s thru the end of 1960. Because, by the end of 1960, some orders had been received for computer systems to be shipped in 1961 and 1962. It gives us a little peek into the future, but, primarily, gives us a snapshot picture as of the end of 1960 and does not show the dynamics of each of the individual market. It is true that some markets are developing faster than others, but a similar analysis done two years ago by Jay Greene showed remarkable similarity. Note the rankings of the electric and electronic markets and the banking market.. .Both popular with the Computer Department. ..But also, note that if we had grouped the non-military Federal Government, the U. S. Navy, Air Force and Army into one big Federal Gov't market, it would total over 20 % which makes it the largest customer industry classification .for computer systems. ..and incidentally the pioneer of early computer purchases.
Let's now look at what the Computer Department has done in the marketplace. This slide shows how the Computer Department's cumulative orders received have split among user industries. Those 304 computers sold to NCR were not shown since they were subsequently sold to a variety of markets and, therefore, do not show the emphasis of our own sales organization's efforts. I don't believe that it's a surprise to anyone that we have strongly concentrated in the bank market. Electrical-electronic is next because many of our internal General Electric orders fall in that category. Incidentally, don't get the idea that opportunity is anywhere near exhausted in the bank market because a recent marketing research study showed that we have concentrated heavily in the top 180 banks and for these we emphasized the GE 210 for demand deposit accounting. There is lots of opportunity for expanding into medium-sized banks with our 225 and there are many other possible applications that demand deposit accounting. For example, many of our customers are talking of automating a bank's payroll. Now let's turn more specifically to Marketing Research and how we do our work. Let me assure 'you at the outset, that the proverbial crystal ball as a Marketing Research tool became obsolete with the introduction of the computer. Off the record, you might get me to admit that we drag the darn thing out occasionally and dust it off, sometimes, when management asks us a question which the computer can't answer. But our program in Marketing Research is to automate our task of gathering facts and statistics on the ever-changing business environment, so that we can assimilate on a systematic and continuing basis a huge amount of information with a minimum number of personnel. By utilizing a computer, we can constantly store information and then manipulate this up-to-date information when needed. With the possibility of stepping on Rem Rand's toes, we call this' Real-Time' Marketing Research. Through automation, we hope to be able to assist management in making sounder business decisions and formulate better strategies by replacing hunches or preconceived opinions with facts. The slide shows the way information flows in Marketing Research. Most of our input comes from newspapers or magazines plus letters and reports, some of which come from you salesmen in the field. We figure we scan over 10,000 pages per month. Out of the initial screening comes a series of clippings which contain information pertinent to the computer market. These clippings vary in size and importance, for example, from the price of the new Philco Model 2400 satellite computer to a whole article from Fortune Magazine on Sperry Rand Corp. These clippings then take one or more of three paths. One is directly into one of our 14 file cabinets. Another path is the Marketing Research Newsletter which is shown on the next slide. I am sure that most everyone here is familiar with this publication. What we do is publish the first few paragraphs of each of the week's top news stories in the computer and automation fields. We add to this, a keyword headline, which we later index using punched cards. This index we publish and distribute semi-annually. For those of you who don't already get the newsletter, all you have to do is give me your name and address and I'll add your name to the list. I'm happy to add that it's still free! For those of you who already do get the newsletter, I would like to remind you that we accept contributions, particularly clippings from your respective local papers. I especially want to thank Gene Agerton from Philadelphia who is a recent contributor as well as Jim Kessler from the Dallas office. Incidentally, we get contributions from other sources too. ...G. W. Alexander up in the Minneapolis ASD office is a faithful contributor and we even got one the other day from J. B. Lanbert in Rio de Janeiro telling about Machines Bull opening its first office in Brazil. Page 14 An example of the third and automated path is shown on the next slide. This shows how information flows into our installation report. Information from anyone of three sources is formatted and keypunched, providing a punched card which represents a new computer installation. The three sources are (1) magazine clippings or (2) a 'yellow card', and more about that in a moment, or (3) a salesman proposition report, which itself is being automated by Marketing Administration. This one card by itself doesn't mean very much but when this is placed into a deck of cards, each of which contains similar information on many other installations, we have a powerful Marketing Research tool. We have recently put this data through a sorter and had printed up an installation report a copy of which was sent to the manager of each field sales office. This is a handy document and we want you to become familiar with it and use it. For instance, the other day, Ralph Zani wrote me from Boston, stating that he was recently assigned the state of Rhode Island as his sales territory and wanted to know all the computer installations in that state. Although, we don't have everyone listed, we probably do have 75% which is a good sample. In his case, it was easy for him to look up, because we have the data sorted out by state and city. Similarly, Bill Beagle asked for a list of all the computers in the New York City area for N. Y. office. Besides these general requests, we sometimes get detailed requests like a recent one from Jim Kessler. He asked for street addresses for two computer users in Waco, Texas whom we had listed in the installation report. When our information proved correct, Kessler reported that even the local Waco Chamber of Commerce didn't know those manufactures existed! To keep this report up-to-date and more useful to you, we have provided 'yellow cards' on which to send in new installation information. Tom Horton in Los Angeles has already sent in three 'yellow cards', and I want to thank him a lot for his cooperation. These 'yellow cards' were used to verify some questionable data we had from another source and it was then fed right into the system. As you can see Marketing Research is a two-way street. By feeding our systematic collection system factual bits and pieces of information, we will be able to feed back summarized information which will help to make your sales task easier.
R. F. BARNES Thanks, Chet. Now that you fellows are current with Marketing Research, let's look together at the second part of my talk. ..Product Planning. Four important phases for you to be acquainted with are: What we do. .. To describe what we do, let's look at what good Product Planning isn't.
Customer needs. Here your regular sales contacts are important to point out where a future product change will be valuable. As a Product Planning team member, you can improve our inputs by bringing these to the attention of Product Planning, as well as arranging depth discussions with selected customers, and consultants, as required. Product spec's. Here's where customer needs, sales tactics, engineering capabilities, and manufacturing requirements are hammered out by the product planner into function specifications. Product appraisal. Performance, features, attractiveness and cost are compared from the sales and customer viewpoint, Competitive analysis are made on current and forecasted offerings. Timing. For the team, product planning records the scheduling of the major key dates, bringing to the attention of microscopic people how they fit into the microscopic picture. From these schedules, announcement, order taking, and shipment dates of your new products are made available to you. Product line control. Your sales needs for an endless variety of ratings as a standard line are matched against the costs to produce and the probable results. Pricing. Value to your customer competitive levels now and forecasted, costs, sales volume, profit goals, selling tactics are all considered in
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arriving at those prices which stand the best chance of helping you meet your goals. So much for the work elements of product Planning. Since it's a creative, evolutionary, and a team process, a brief moment on how it all fits into your field selling efforts. Starting at the left, ideas for products. ... hardware and software...may come from any place. Three major sources are: One.... Engineering, including the lab, ideas on how to do a present job better...faster, cheaper, more flexible, more saleable. Two....Joint analyses of competitive offerings...techniques, features acceptance. Three.. Sales and customer requirements over and beyond current products. Here you fit in importantly. Promising ideas are then synthesized by the product planner into functional specifications to which engineering, applications, and manufacturing address themselves. The time cycle from specification to a deliverable product includes the type of invention, design, manufacturing required.. .plus, the priority of this new product in relation to others going through the same process. In the computer system business, headquarters sales tactics determine when, during the engineering manufacturing cycle, the product will be announced and orders taken. On a planned basis, orders are filled and customers use the product to satisfy their needs. As manufacturers introduce more and more new products, hopefully to obsolete all but their own products, the product planning management of this team process becomes as competitive as the product itself. The pressures to shorten the process time cycle become as insistent as the pressures for increased product performance. As a member of this new product team, you can markedly improve the output...in time and product....of this process by insuring that your inputs and feedbacks get to product planning for evaluation with engineering, manufacturing, applications, and other sales people. Headquarters backup to keep you in the Product Planning and research flow of information includes Chet Rice, Dick Fay and Ray Washburn, trainees Bob Lyons, Don Graf (225), Pete Scola (new computers), and Al Case (optical character recognition and the new document handler) Case Krygsman and Howard Carter (3100, 3101, data communications) Ross Reynolds, Don Falk (Site,) Rod Mead (1000 CPM Reader, ) Archie Watson (TPR), and May Doyle (proof encoder). Part four of my brief talk involves a quick look at our new product objectives. In supporting your present and future sales efforts, new product goals are aimed at increasing volume, broadening line, and creating new growth businesses. In business data processing; we currently have the 304, 210, and 225 computer systems aimed at pieces of the IBM overall line. As a result of close analysis of selected customers, competitive comparisons and in conjunction with Arnold Spielberg's group, and those with Art Critchlow, we have in active planning and implementation a broader market basket. As Lacy Goostree stated, this will mean in the business processing area alone, seventy two per cent of your 1963 orders will be for products not now available. In 1964, eighty four per cent of your orders will be for new products. These new lines (and it will be more than one line) have not yet progressed to the announcement stage. I can say that we are aiming at a line smaller than the 225. ..and one larger. The timing of their availability depends heavily on your current success with the 210 and 225. ..Getting the orders and resultant income so we can afford the major expenditures in new hardware and new software. On peripherals, our objectives are to design, manufacture and sell our own products to (1) better match peripheral performance to system needs, and (2) obtain greater profits and controlled source of supply by in plant manufacture. The General Electric document handler, full field proof encoder, 1000 card per minute reader, and OCR are examples of one or both of these objectives. Peripherals, as you are well aware, are the important interface between the customer and the information system. Working closely with Ken Manning's group, our plans are to make these electromechanical marvels more and more of General Electric design and manufacture. With the peripheral content increasing to well over fifty per cent of the total system cost, and the tailoring of systems to selected applications by unique peripherals, our new business systems will hinge on General Electric peripherals. In the next three days you will hear much of our new team approach to the product plans. ..that we are currently talking about. You have an important part to play in this team process of planning products to beat orders budgets. The perfect product has been defined, from conflicting viewpoints as: From Sales...A low price, immediately available from stock, with obvious unique sales features every customer wants and no compettor has. From Finance...High net income and low investment, preferably none. From Engineering....A patentable contribution to the art. From Manufacturing. ..1000 a week output, never change the rate, one model only, requiring fancy machinery to produce uneven, but acceptable quality. The challenge of Product Planning is to weld these diverse views into one timely department plan which will satisfy you and your customer. ..and will build confidence that General Electric's plans for future products will enhance your personal stature in your customer's eye. Page 16
R. R. JOHNSON
A few weeks ago, the Computer Department received a letter from a high school student in Pittsburgh. 'Dear sirs,' it began, 'I am a data processing student and I would appreciate any free material and samples you might have on this subject...' Now, while this letter is amusing enough on the surface, let's pause and consider it for a moment. For, in this relatively innocent request, we can put a finger on two vital issues in this complex business of selling data processing. First, from our engineering point of view, it stands to reason that we can not furnish free samples, that even the simplest of our products represents dollars in development plus dollars in hardware. On the other hand, your customer, like our youngster from Pittsburgh, often would appear to be looking for the most for the least with everything but green stamps thrown in at bargain prices. Moreover, I believe we have a new brand of customer. For, is it not true that many of your customers today feel their organizations have hovered on the brink of a recession. ..have had time to hear talk from dissatisfied computer users. ..and have become cautious when automation is offered as a pill or panecea for their business ills? How then may we bridge this lack of free samples when our end product is probably the most expensive time and money saving device the ingenuity of man ever invented? Both the equipment we have to sell and your sales techniques depend upon a common factor. This factor is information. So, I am here today to give you a review and preview of Computer Department products from the engineering point of view and to discuss briefly the philosophy of the Engineering Section at work. A philosophy which we believe is producing and will produce an increasingly attractive family of data processing equipments capable of broad applications, long life, and efficient service. There is a Chinese proverb to the effect that it is wise to make haste slowly and I am certain that you learned at your grandfather's knee that haste makes waste. Yet for all the wisdom which may exist in old saws, the Computer Department Engineering Section scarcely has had time to cease running since Bank of America almost six years ago selected the General Electric Company to automate a major portion of its banking procedure. How fast that running has been may be simply illustrated by a few figures from Engineering personnel rosters past and present. For example, in January of 1957, there were 101 individuals assigned to Computer Engineering. By January of 1959, this had grown to 240. Current figures for the Engineering Section set the figure at 452. Although Computer Department Engineering and Erma had to 'grow up' together, we were very fortunate in achieving two major and enviable objectives. These were a big, solid-state computer and a satisfied customer. So much at the moment for ERMA. From her, we went on to the GE 210 system which will be discussed presently. Meanwhile, back in Engineering, another computer system was under development. This was the NCR-304 electronic data processing system and the subsequent 304-B. With the NCR 304, the Computer Department Engineering Section entered actively into a design automation program, and it should be noted historically that a considerable portion of the 304 was designed with the aid of another computer. Today, we are using a 304-B to run design automation programs on current and future computer models. We are confident of the value of using a computer to aid in the design of a better computer. We have learned that proper design automation techniques will: 1. reduce computer design cycle time; 2. reduce engineering design manpower; 3. provide better documentation for the designed computer; 4. assure greater reliability built into the computer; 5. determine optimal computer design; and 6. most of all, perhaps, remove much of the' coolie labor' from the backs, or more precisely, the minds of the design engineers. This year has seen us double the size of our design automation team which means that as the year passes, more and more of the routine and drudgery of computer design will be handled by computers. As our sales representatives, it is extremely important to you that we use computers to design better computers. Design automation is one of the strongest tools in the industry today with the key competitive advantage that it is possible to explore any number of design possibilities before freezing the design. It is also our intention in the future to extend the benefits of simulation to customer requests where they enter the area of performance ability in new equipments. But this must depend upon you educating our customers to the idea of our working out their problems in an elegant pseudo language such as COBOL, ALGOL, TABSOL or fringe(?) to be processed by our general compiler program, GECOM. Page 17 Before leaving the subject of design automation techniques, one thing more remains to be said. Design automation and simulation depend upon computer programs. As I am certain Dr. Sassenfeld would be the first to agree, computer programming is not inexpensive. Still, weighed against the tremendous expense of a new product line, design automation is money well spent and perhaps the best 'life insurance' we have as we move to the future. Now let's consider our current frontiers, the products we have and how we in Engineering can help you in this day of the 'harder sell'. First the General Electric Company intends to assume a major role in the computer industry. In the Computer Dept., it is spending large sums of n1oney on engineering and applications efforts to assure our ability to provide you with more than adequate equipment for your customer's needs. It is our fullest intention both in hardware and software to increase our position in the field as dynamic contributors, and to continue to furnish you with highstandard, high-fashion, high-reliability computers. So, what are we in Computer Engineering doing about this big obligation. Byron Burch will tell you how GE 210 grew out of Erma and will delineate its present capabilities. Originally working with checking accounts, it has broadened its activities to process mortgage loans, and eventually will be applied to all bank accounting functions. As you noticed on your copy of the General Electric 1960 annual report, the GE 210 is a show horse as well as a work horse. It's a truly spectacular set of prestige equipments. The bank without GE 210 is not a handsome as the institution that has one. And while this certainly is not the chief bit of business we sell when we sell a computer, it's not an item to be over-looked. To illustrate what I mean, I was reading the other evening a account of the history of the British military uniform. Now it's a long jump from a nineteenth century soldier suit to a twentieth century electronic data processor, but I couldn't help noting that when the British Army of Queen Victoria's day was faced with a dull, unpatriotic period of peace on earth and the recruiting fell off, it increased what was called the seductive value of the uniform to attract young men into service. So let's not ignore the possibility that we may build a more seductive computer, and I am suggesting most strongly that neither engineering nor you can over-look the appearance factor and the value of a strong General Electric product image. Grant the GE 210 is the banking computer, it also is something considerably more. And, taking advantage of the know-how gained through it and ERMA we are now preparing to move strongly into the 7070. ...1401 span of the general purpose computer market. It will be the pleasure of Mr. O'Rourke and Mr. Levinthal to present to you the major virtues and capabilities of the GE 225 and I am certain that I can add little to their remarks. But I would like to call your attention to its extreme flexibility as a computer. For here, at last, we have a truly modular machine, a computer developed in the building block philosophy which adjusts simply and quickly to any size task. The GE 225 can cover a range of applications from conventional punched card approaches to a highly sophisticated management information system, demonstrating equally high performance in general data processing or engineering and scientific calculations. Moreover, its ability to incorporate a variety of peripheral devices by means of its special common connecting device, the 'controller selector function' mark it as a big step toward tomorrow's computers which must emphasize compatibility among all computer department product lines and equipments. Before we leave the 225, a word of caution. We like the 225 and we're glad you like it, too. But please, gentlemen, think twice before you offer a customer a new option you've just thought of. The 225 does just about everything now short of bird banding and counting goldfish, and I suspect if one of you ran into an individual who needed a computer with a bird bander and automatic fish counter built in, you would sell him a 225 with the bander and counter as optional peripherals. Actually, in the field of special applications for computers, we're better set up to serve your individual needs than we were. At the beginning of 1961, we established a new Engineering Subsection, Special Computer Systems under Mr. William Bridge and this is the function in engineering which has been assigned the very important job of customizing our computer devices and systems to serve particular and unusual assignments. The formation of another new subsection in engineering also has occurred since last we met. This is Peripheral Equipment Engineering under Mr. Ken Manning. And on Wednesday, Mr. Manning, himself, will talk to you about the big new look in General Electric Computers.... the addition of a strong and substantial line of major peripheral equipments. Naturally, this change will not take place over night. Obviously, there is a long and difficult road ahead. But in less than a year, we have made tremendous strides. From a handful of individuals, we have built a full-fledged, exceptionally competent Engineering Subsection. Moreover, the subsection, as Mr. Manning will tell you, has gone to work. Some of its products are in the development stage and others are close to the point of release to manufacturing. Among these are: sorters, a proof encoder, card readers, a large random access memory, a flexible disk memory, a low speed printer, and an optical character reader. Other products are in the planning stage both in the peripheral engineering function, and as Dr. Spitzer has revealed, at the computer laboratory. Page 18 Therefore, one of the important facts of this sales meeting, gentlemen, is that the Computer Department in general and computer engineering in particular have moved into the peripheral field with the means and intentions of building some of the finest computer peripheral equipment that have yet headed to market. Still in the area of engineering's reorganization, I am most happy to announce to you today the creation of a third new engineering subsection. This is small automation systems and devices engineering. The small automation systems and devices engineering subsection will emphasize and implement our interest in low cost, self-standing, automatic devices for industry. These will be data processing units and systems aimed at those individuals and industries who don't like the ultra sophistication of highly priced, highly involved on-line data processors. The GE 3100 and GE 3101 are data collecting systems designed to serve the management and business functions of any industrial enterprise. These devices handle such areas of activity as shop production, inventory control, shipping and receiving, stock and warehousing, cost accounting, and any other important functions which the individual industry feels may require monitoring. Perhaps, I should point out here that we are not interested in assuming the functions of industrial computers, but we are most interested, indeed, in exploring and developing those supplemental services of a strictly business nature. The 3100 and 3101 systems are spring boards into an enormous area of computer applications. They will permit us to do business wherever our kind of business is done. Regardless of the merits of these several products, as far as Engineering is concerned, they are not good enough. The best machine in the world is not good enough nor shall it ever be unless it achieves the quality of those perpetual motion devices man dreamed of in the seventeenth century. And oddly enough, as we enter the age of the computer, it is precisely a perpetual motion machine that we require most. ..That is to say, data processing systems capable of one-hundred percent up time. So, within the Engineering section, a constant program of product improvement goes on. Reliability is the rule of the day with sophistication and diversification of product application running neck in neck for second place. Other factors also enter into our constant search for means of upgrading our equipment. Standardization of equipment philosophies and components bearing across product lines will make the job of product service easier. Conformity of appearance design to present machines with a pleasing and uniform General Electric aspect, improved human engineering so that operator controls and displays are in the best possible locations, simplification of installation requirements, increased modulability, each of these is of major and immediate concern to Engineering as we seek to provide you with the best computers available in the trade. And here, I would like to remark upon the growth of Engineering's Industrial Design unite which has more than trebled in the last year. For, from these individuals has come and will come our most apparent product improvements. Last year, for example, Mr. Henry Bluhm received the 1960 Wescon Award for outstanding computer appearance design. Much more work of the same caliber is in progress. I have mentioned the outstanding good looks of our 210. You are well aware of the neat, handsome and efficient aspects of the 225. On Wednesday, Ken Manning will give you a preview of the exceptional appearance of our new line of peripheral equipments. Looking now to future frontiers, what are some of the things we must achieve in Engineering. One is compatibility among our products. As I have mentioned when speaking of the 225, we already are involved with this concept. In the future, it must concern us in every aspect of our design. Assuming the obligation of our own peripherals, it would be dangerous to limit their design to this particular system or that. If we are to achieve the growth which we must to survive in the battle of computers which lies ahead, it is important that compatibility among our equipments and devices become a prime goal of the immediate future. Of equal importance is this business of a product image, and it is of major concern of all of us that we develop a General Electric computer image. Our Industrial Design people are immediately involved as they should be. But this creation of a firm product image must go much deeper than the 'finishing touches'. You can not improve the appearance of a cow by painting it purple. It is absolutely essential to all of us who are concerned with building and marketing computers that we think in the terms of a General Electric computer so that the final product will be indelibly and unmistakably stamped with the GE brand. Sales and service are as much a part of this brand, this all essential product image, as is its appearance design. Finally, gentlemen, the state of the art in electronic data processing is always fluid and dynamic. There are no indications anywhere that we can settle down to this type of device or that, that we can say this is our market and that is not. Therefore it is the intention of the Engineering Section of the Computer Department to continue to explore, initiate, innovate and develop engineering programs in support of new and expanding product fields. An indication of this intent has been given to you in the promise we hold for the 3100 and 3101. There are several other projects on the drawing boards. Big, exciting computers, small, extremely fast and efficient systems, but gentlemen, the time for their unveiling has not arrived. When it does, it is our belief that we will make a major step forward in the computer business. As devastating as it may appear to established sales routines, it is the business of your Engineering Section to obsolete our existing products technologically as fast as we are able. For, this is the only way in which we can achieve those important contributions to computer technology which Page 19
will put us in the forefront of a field where General Electric belongs. Thank you, gentlemen, for your attention.
T.J. O'ROURKE
I am here today to tell you a frontier story about a gun that made history. You have undoubtedly heard the story of how the colt 44 opened up the west and made it safe for the early settlers. Well, this is the story of a Rifle that opened another frontier. This rifle is known as the GE 100 computer system. In the early days, this frontier belonged to a certain tribe of Indians. These Indians were firmly established and roamed their hunting grounds at leisure. They were not bothered by an occasional settler, just as long as the settler did not encroach on their superior hunting and fishing areas. Life was difficult for the white man on the frontier in those days. However, one pioneer family was not deterred from stringing-out on their own and establishing themselves. This family was George and Bofa Bank. From this union came the GE 100, delivered right on schedule, in June of 1958. This was just the beginning. With George and Bofa as a rallying point, the settlement began to grow and prosper. The Indian bad men became concerned about this invasion of their exclusive hunting grounds. They went on the warpath. This led to the establishment of the banking outpost as a haven for those bankers who were unwilling to knuckle under to the Indian bad men. To defend this outpost against the raging IBM tribe, a highly-select group of men was formed. Their names are legend now: Hogg, McGoldrick, Bellamak, Hayes, Lindley and Prince, on the right! They were the original Arizona Rangers!! MUSIC
Those early days were tough and fraught with danger. (I ought to know; I lost most of my hair.) But we did not yield. Then, as now, there were some who doubted if we could make a go if it. On every side, there was much wailing and wringing of hands about tape problems, about late delivery, about pricing, and so on, ad infinitum. But we overcame every problem and today all of us point with pride to what we have accomplished. Yes sir, those were the days! But those damn Indian bad men never let up. From 'it will never work' tactics, they suddenly switched to 'our 70701401' millimeter howitzer will do it better! To meet this challenge, the GE 210 was developed: a newer, lighter, rapid-fire weapon that literally ripped holes in the opposition. As of today, the banking outpost is firmly established. The original Arizona Rangers have gone out on the offensive and are carrying the flight to the enemy's camp-grounds. The original Rangers have been relieved here in the fort by a new group of young, vigorous replacements. The original few inhabitants of the outpost... (we call them 'customers') ...have grown in number and they do many things other than banking now. With both the GE 100's GE 210's in service, our firepower is increasing daily. But we haven't stopped the Indian bad men. ...As you all know, we have developed another weapon for the arsenal: the GE 225 like the 210, it is light and rapidfire. The two of them together give you the weapon you need: a double-barreled shot-gun, loaded with both 210 and 225 shot. You can shoot with either barrel, depending on the situation. (in some instances we've fired both at once!) But more about this weapon later. While we have won some important battles against the Indian bad men, we have not yet won the war. We still have to defend the outposts we have established. In fact, as we penetrate deeper into various markets, we ourselves become more vulnerable to attack. To help you in the field sales outposts, we here at the fort are organized to provide special assistance in each of the market areas we are planning to go after.. ..These market areas are: banking and finance....Ranger Lieutenant Hal Wells; utility data processing. ..Ranger Lieutenant Jim Richmann; engineering and scientific---Ranger Lieutenant Gene Scott; manufacturing and production control. ..Ranger Lieutenant Len Kilfoyle; insurance. ..Ranger Lieutenant Art Dodd; information storage and retrieval. .. Ranger Lieutennant Jim McPherson; consultants. .. Ranger Lieutenant Len Kilfoyle; hardware and software. ..Ranger Lieutenant Jim Pompa and, most of all, First Sergeant Lois Littlefield, ram-rodding the outfit. You know, she's recently been designated the official "Den Mother" of the headquarters unit, Arizona Rangers! Several of the present-day Arizona Rangers are specifically charged with helping you to defend and expand the banking frontier. Here is Ranger Hal Wells to tell you about it. Page 20 |
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H.
N. WELLS The job in the banking group is to help you defend and
expand the banking frontier. You may be asking yourself "What the
hell is the banking frontier?" To answer this question, let's take a
look at one of the pioneer stage lines on the banking frontier . .
. . The original slogan of the stage line was: "California or
Bust" This outpost in California was established back in June of ought-fifty
eight. It was an up hill trail all the way, full of mental ruts and
pitfalls, like random file-posting and poor character-recognition. The
General Electric 100 was our only rifle in those days, and it is still
shooting through two-and-a half million From Transit to Trust You'll
all hear and see it more and more in the months ahead. Here is a map
of what your prospects can expect to find along the banking trail. Transit
is our market area of greatest potential. This is the area
where a bank can really increase its earning power, and all large banks
have the transit problem. You have the solution to this problem
in General Electric computers, peripheral devices and experience. The
first commercial bank to automate its transit operation on magnetic ink
equipment is doing so Anybody
can do transit on a sorter, but, The full-field proof-encoder concept allows you to use a
computer system to do analysis at automated speeds. In fact, on
General Electric systems, you can do proof transit and deposit
analysis at 2400 times per minute. General Electric blazed the trail in check accounting.
Demand deposit is now a well-established community on the banking
frontier. Over twenty banking homesteaders are represented at this Installment Loan. We have eight
customers with an installment loan application: The first one
"on-the-air," and the biggest, is General Electric Credit
Corporation. At GECC, our initial computer system will be handling the
complete records for over 500 thousand accounts at each center.
Eventually, GECC will have loan-accounting centers all over the country.
The installment loan application is feasible because we have a two
pocket document handler for data entry, and we have a printer which allows
us to create magnetic ink documents. Real Estate Mortgage Loan is
another outpost along the route. This outpost IS very
close to installment loan and thus is a logical outgrowth. Bank Credit Card Charge Accounts are
waiting only for imprinting and encoding devices. Our Mountain- View
Laboratory has been working on pointof-sale encoding devices for some
time. When we Savings. With daily interest
sweeping the banking industry from coast to coast, it is
imperative |
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that
banks obtain some computer solution to the interest calculation problem.
MICR-encoded items, with special account numbers or transaction codes, may
enter a computer system through a normal transit or demand deposit
entry-run and be handled as any other piece of demand deposit paper.
Savings pass books are passe!
! The
newest frontiers are "No Pass Book Savings and Daily Interest."
Both are naturals for General Electric computers. Payroll.
Payroll is an
old standby for anyone who has a computer system. With our re-entry
printer, your bank can print pay checks and deposit slips. Further, our
banks can now offer a service to local industry to do its payroll and
labor distribution reports . . particularly banks which need added
volume to justify the computer. Stock
Transfer. Again,
with re-entry printing, we can offer a unique solution to the problems a
banker faces in printing stock certificates, issuing fractional warrants,
and keeping the transfer records of those companies served by the bank. Trust.
This old "Bugaboo" of banking with its voluminous records is
particularly adaptable to a tape oriented system, such as the GE 210.
Eventually, we expect nearly all of our banking customers to put the
trust application into their computer system. There it is: Transit to
Trust. We have made proposals or sold equipment in all of these areas. How
much equipment have we sold? Here's Ranger Bob Dilweg, to tell you about
our banking sales achievements . . . . . .
R.
A. DILWEG Fifty-three
of the top one hundred banks have ninety-eight computers installed or on
order. General Electric has sold fifty per cent of this hardware. We
shipped the last GE 100 system to the Bank of America on April 28th, just
two weeks ago, and right on schedule. Here's a recent listing of our GE 210
sales in the banking and financial market. We have banking customers in
fourteen states from California to Connecticut. All but two of our GE 210
customers Three of
our GE 12-pocket document handlers are now in production. The first
delivery is in August. One tow-pocket handler and twenty-seven 12-pocket
handlers are now on order or installed. The two-pocket document handler
was delivered last October to GECC. The first General Electric twelvepocket
document handler off the production line is in test this week. You'll see
it on your plant tour. During
this sales meeting, you will be briefed on our sales promotion plans for
C.P. M. After you have returned to your offices, you will receive
training in the application of critical path method to your customer
scheduling problems. |
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In the
area of Optimizing &
Simulation techniques,
you will be supported by know-how, literature and programs. No other
competition can match your customer support program. To keep
you abreast of new developments, we will organize manufacturing systems
seminars. Speakers will include representatives from our own and other G.
E. operating departments, the Internal Automation Operation, and the
Company Service functions. Initially, these seminars will be organized at regional level and will be supplemented by periodic mailings of
application literature. At the district level, arrangements will be made
for inplant training and orientation visits to selected G. E. product
departments. We will
monitor the activities of the G. E. computer users group and keep you
posted on projects undertaken by its membership and specialized committees.
You will receive copies of the group's periodic publication, citations,
and any special reports as they become available. We will
monitor the activities of the GE 225 User's Group. In this way, you can
demonstrate to your potential customers the advantages of membership in
such a knowledgeable and progressive User Group. A true fountain of
knowledge! Briefly,
I will mention another key area of support activity . .. Data Acquisition
Systems. The necessity for obtaining current, accurate, feedback data is
obvious. Some of the methods of satisfying this need are self-limiting and
cumbersome. Consider
one of the traditional methods the little black book. Our new
product line, 3100 and 3101, will be announced to the external market very
shortly. Personnel
of the Advanced Systems Group have participated in the development of the
product line. As a by-product of their efforts, a sales support package
has been developed. This package will be available to you in the near
future. Other
speakers will give you more details In
summary...then, where do we stand? First, we have the unique back-up and
support of G. E. manufacturing systems know-how. Second, we are transating
this know-how into powerful sales tools. Examples are TABSOL, Critical
Path Methods, and Generalized Simulation Programs. Third, we are marketing
data acquisition systems, 3100 and 3101, Our job
is to put you in the position where your prospect says to you . .. you're
the supplier that I've been looking for because you can give me the
applications know-how and support as well as the computer that I need to
manage my business. SKIT
This can
be your prospect's consultant talking. Our job is to make sure that we
support your consultant relationships in the best way possible. We want to
create the most favorable environment for your sales situation management.
When you
court your customer, you can't ignore his consultant. You tell us the
names of those consultants who need to be clued-in on our policies and
products. Then we'll move into action! Our
current program for consultant education includes periodic seminars,
personal contact with senior representatives of consulting firms, and
liaison
with consultants who visit headquarters in the interests of a specific
client. Our
participation in a computer educational seminar for the California Society
of Certified Public Accountants is an example of the specialized support
we can provide. Next week,
we and six other computer manufacturers will submit solutions to a case
study for payroll and labor distribution. The seminar will be held in the
IBM training center at Los Angeles. What better place to twist the lion's
tail than in his own den We
recognize, however, that all of the headquarters' programs put together
are only a small part of the total answer to more effective consultant
relationships. In the
main, you are the one by whom the consultant judges the General Electric
Computer Department. It behooves you, then, to know your consultant! As
an additional aid to you, we will prepare Consultants
are primarily 'intelligence agencies'. Their stock in trade is
information. Their value to a customer lies in their ability to contribute
input to his decision-making process. If we keep them well informed, they
will not be embarrassed by their lack of information about our products
and our policies. After all,
you wouldn't recommend a girl you hardly knew .... five years ago,
the only girl the consultants knew was I.B. M. How well do they know us
today? Well enough to recommend us? |
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That's our
job . .. to make sure they know us well enough to recommend us . .. with
confidence. So, let's
have a go at it and try to arrive together; it's better that way! SKIT
H.
N. WELLS All
of these result in dollar savings to a banker. Bank
of America has experienced a one-third costsaving since automation. A
banker is interested in audit control. One of his primary questions is
'Does it Prove? Absolutely, and to the penny?' He's interested in
reliability and demonstrated working products, not just a gleam in the eye
of an engineer. He wants to see operating hardware. The General Electric
100/210 systems are experiencing ninetynine per cent uptime and have
proven to be extremely reliable. They are designed to do an efficient bank
job reliably. The 225 system in its initial operation has also shown
itself to be an excellent performer. A
banker wants ease of usage. We can offer him BANKPAC. Including specific
programs for demand deposit accounting and other generalized software
(such as automatic programming packages. ) Plus
Question
. . . Can we supply these needs? Answer
. . . . You bet we can . . .. Our GE 210 is designed specifically for
banks. Our experience is available to our customers for both the 210
system and (A
movie, "The Second Revolution in
Banking, " was shown at this time. ) That's
what Merchandise National Bank has to say about bank automation. Copies of
this film are being printed and will soon be available for your use as a
sales tool. The top
one hundred bankers have been our target so far. In many cases we have
justified a computer system to one of these top hundred banks on the basis
of one or two large-volume applications. Now, we have pretty well reached
our potential market of new hardware sales in single user applications. Of
course, we could sell second-shift time to some of these original hardware
customers, or even more equipment . .. and will. But our objective now is
to sell more hardware. What we must do is develop Page 24
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none
of the individuals could afford the tariff. Another way that we can expand
the banking market to include all of the top five hundred, is to provide a
means of total integration of all the bank's services. The problem is how
to get more orders. The opportunity is
here for us to get those orders. If we were able to say to our next
four-hundred prospects . . "Look, Mr. Banker, you can't afford not to
automate. Look at what you can offer your customer with our system that
your competition can't come close to doing. " Pete Repenning of our
Chicago office has come up with an approach which is not only an advantage
to the bank, but to the bank's depositors and customers as well. Here's Pete
Repenning, commuter from the land of the elevated trains to tell you
about it.
P.
A. REPENNING
Sales offices in unit banking states, such as Illinois, are
faced with a rapidly-dwindling number At least
two of the directions this effort can take are . . . One . . Do more jobs
for the banks, and Two . .
Perform a
function which has advantages for the bank's customers, so that the
justification includes not not only economies of operation but also
customer service. Beverly
State Bank in Chicago, a unit bank with thirty-six million dollars in
assets and about twenty-five thousand depositors is an example of a bank
too small to justify a computer solely on the basis of cost savings. In
working with them, we have developed an approach to their system which
will cost about the same as their present manual system, but which offers
distinct advantages to management and to bank customers in the form of
improved information. An interesting side-light of the proposed system
is that it could not be performed by anything less than on line, buffered,
MICR-entry equipment. Beverly Bank suggested that one master tape file
contain all accounts of all customers. That is, data on savings, demand
deposit, and various types of loans would be carried under one account
number for each customer. Since
the master file would contain all the information, not only on demand
deposit accounts, but on savings and loans as well, it was proposed that
all transactions would be entered on MICR-encoded documents and
differentiated by transaction code. As a result, This is a
rough idea of the type of statement that could be provided. In addition to complete detailed listings of transactions to checking and
savings accounts . . . . Beverly Bank already eliminated the savings pass
book . . . . . summary boxes would be included showing balances for demand
deposit accounts, savings, and They
proposed that entry cards be sorted on an 083 |
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One
. . Give better customer service,
and
the off-line entry concept would make it extremely difficult to perform
the proposed consolidated entry of all types of transactions, because
segregation of the different types of entry documents could not be made
by the computer. Also, transit segregations would be extremely difficult
to make without the required programmed table look-up. Acceptance of such
a scheme virtually eliminates other machines in the GE 210E or 225 price
range! ! This approach to
a computerized bank automation system benefits everyone involved .
. . . . . The bank benefits by: The
customer benefits by: . . . Consolidated information on all banking matters .
. . current monthly ·
. . . Consolidated interest information for the support And
General Electric benefits by: ·
. . . Making it possible to justify a complete GE This
will expand our market to include the top five hundred banks not just the
top 100. The greatest benefit of all, therefore, is more sales. H.
N. WELLS This is
really a new idea, a fresh approach to expanding our market to the entire
top five hundred banks. Banks can't afford to stay behind competitively.
With this approach banks can justify computers on the basis of competitive
advantage, and also on the depositor benefits. We want General Electric
computer systems in the top five hundred banks, and this is one of the
routes we can take. The
headquarters banking group is on the frontier to help you. There are
several ways that this help can take place. On a day-to-day basis, the
banking posse is always ready to help you with your field problems. Deputy
Ed Motz is just about to receive a phone call from Dick Nosky in the
Cleveland district office. Hello
. . . . Hi,
Dick .... You
need a few sales aids for a presentation tomorrow. OK,
what do you need? All right, that's a 32K Central Processor for a 225
system, 4 dual 1000 KC Tape Handlers, Re-entry Printer. That
it? Oh, you want card-in-card-out on Scale
models will be fine? This is Dick Nosky, isn't it? Oh,
I see, the board room already has a sorter installed, and there is no room
for a complete system. OK, anything else? You
have a Phoenix visit planned. Wait a minute now. Let me tell you about our
summer-long special on plant visits. As soon as the hot weather starts,
we're going to air-lift the entire plant up to Lake Louise. It's a lot
cooler up there for dear old King Customer, you know. Your
visitors will be here next Monday? Oh, that's too soon for the Canadian
deal, because we're having just a little trouble with the Canadian
customs. Your
customer is the 2056 Last National Bank. There
will be the Vice President, Cashier, and three others. They
like to play golf, swim, visit night clubs, and if necessary they'll even
come out to the plant. OK, fine. Now, do you want them to see the Proof-Encoder, the Sorter, 52 1/2 KC Tape System,
and two 225 systems
multiplexed. All
right, we'll hold back then on the Card Reader, Optical Scanner, Cryogonic
Circuits, Super-Secret new computer, and Thermoplastic Film Memory for
their next visit. All right now, Dick, all we're going to need from you on
this yet is a list of their names. As we have outlined in our Field
Mailing No. 93. We'll see to it that they have a good time and a good
tour. So long now. Hey,
a short one. Need compact computer for Falcon Division of Ford Motor Co.
Price Page
26
must be under $50. Please advise. Casebolt. Ye Gads more special contract terms from Boston. Mr. Shapiro, I want to see the 10,000 card a minute Reader you've been telling me about.Mr. D..... we've got a little problem. Mr. Shapiro, what about your optical scanner production line? Well, Mr. Silva, I'd like to tell you. . . . .. How long will it take to have my computer ready to compute? Well, Mr. White, it seems... . . . . Where the hell is that Document Handler that sorts 5,000 documents a minute.? I'm glad you mentioned.............. How about that van. . . . I thought we were going to see it today? Well, I............. What is the earliest delivery date on my computer? Hey, Ed, I think we're going to need a little help on this plant tour. OK, fellows, just let me take care of these telegrams. We don't have the time to dramatize all the areas of support to field sales, but we did think that this skit would show some of the day-to-day operations. . . . In a more serious vein, we're here to help you. Day-to-day support is only a part of this. Other areas include development of new market application studies such as the one shown in progress on the screen. . . . . . . .. sales aids, trade shows, such as NABAC and so-fourth. And, of course, we're always available for trips to the field. Some specific sales tools you'll find in your district sales offices are. Bank analysis-questionnaire Sample portfolio of the First National A pictorial review of the Computer Department BANKPAC specifications The proof encoder write up, and the New proof encoder brochure. Some of the things we're working on right now are. . . . One Application studies in each of the areas transit to trust. Two Information on Cooperative and share banking. Three Information on the Beverly Bank approach. All of these things are projects in the mill right now. Others are in the planning stage. We are here to help you in any way we can. Let's develop that banking market to get the lion's share of those five hundred top banks. We're here to help you. . call on us. . . anytime; Now here's Captain Tom 0' Rourke. Thank you, Ranger Wells. As you can see, there is a lot of potential left in the banking market. . . . A market in which we've already established ourselves. Let's not forget the machine that made us the leader in this business. It has many features, that in the flurry of new machine announcements, we all may tend to overlook. .. features that we can use to round up some of those Maverick Bankers we haven't been able to corral yet. . . . . not the least of these features is the re-entry printer.. We've asked one of our hardest-riding, straightest-shooting gun-slingers to help you use this special range find sight on your GE 210 barrel. Here he is. . . . . . . Honorary Ranger "Bet-em-to-win" Byron Burch!!! Chop... Chop... Chop... Chop.. .Chop Bryon Burch What is that ? Voice Indian bad men chopping rectangular holes in cardboard dividend checks.
B. F. BURCH Well, see if you can get them quiet while I tell these people about the way dividend checks and similar action documents should be prepared. For a long time, there has been a very weak link in the data processing cycle. As computers and their ancillary equipment have become more powerful and sophisticated, this weakness has become even more obvious and painful. The missing link to which I refer is, of course, the process of translating the output of a data processor into a form such that a human being may comprehend it, take action, and then inform the data processor that the action has been taken. Translating the output of a data processor into a form which may be comprehended by Page 27 a human being (oops) is no great problem today, using high-speed line printers which perform this task at speeds up to 1200 lines a minute. Entering information into a data processor at high speeds is now no great trick either, using high-speed card reading and document handling equipment. In the case of punched cards, the preparation of these cards is a slow process with an additional operation required to make them comprehensible to human beings. The document handling equipment does use a medium which both the human being and the machine understand, but presently available equipment capable of reading media prepared as output of a computer is slow and the reject rate, where known, is high. I am referring, of course, to presently available optical scanning equipment. You have already heard of the work being done by the department to make optical scanning a useful tool, the GE 59B Font equipment. The presently available document handling equipment which is capable of high speed operation, the E- 13B Font MICR-reading equipment has required high quality pre-printing with variable data added by manual operations. No means for preparing E-13 B Font action documents containing variable data as output of a data processing system has been available, heretofore. Recognizing this need, the Computer Department undertook sometime ago to develop a high-speed line printer which would be capable of printing both standard gothic type and E-13B Font characters on the same document as an output device for data processing system. This, then, would provide the means for closing the loop to which I referred. . .. Data processor output, to human being for action, and back to the data processor to indicate action completed, either as directed or with exceptions. There are many examples which come to mind immediately which illustrate the need for equipment with this loop closing. . . Let's call it "re-entry' ability. How often do we see the words on a bill of one sort or another: "Return this portion with your remittance". The document on which we see these words, was prepared by some data processing system, manual or otherwise, and the document is to be returned with the payment called for, to inform the system that payment has been made. Here are a few of the more common examples. . . . Public utility-service bills: Electricity. . . water. . . gas. . . telephone Credit card bills: Oil. . . shoppers credit. . . 'diner's club' Insurance premium notices Department store bills Mortgage payment notices Installment loan payment notices or coupon books. Another application of this type of processing technique is the preparation of checks and drafts. Here are some examples of this: Dividend checks Drafts for payment of life insurance premiums "Bank-O-Matic" insurance claim payments Payroll checks Accounts payable checks Some of these applications are naturals for 59 B optical scanning, but the group of applications involving check-writing will be affected by the fact that the banking system has standardized on E 13 B Font. You will notice that insurance companies are mentioned in both categories. If common re-entry equipment is to be used by insurance companies for both the premium notice and check-writing jobs, it must be remembered that the common language requirements of the banking system, through which those checks pass, have been specified as the E-13 B Font MICR language. It is likely, therefore, that most insurance companies adopting a re-entry approach will use E-13B Font for both jobs. Similarly, in any application in which billing and a significant amount of check writing are both present, the requirement of E-13B Font MICR language for the checks will probably dictate that E-13 B Font be used for the whole job. In a bank, several applications of re-entry type processing are present. Among these are issuance of dividend checks for customers of the corporate trust department, mortgage loan billing, shoppers credit plans such as the Bankamericard plan, and billing of installment loan and check credit accounts. The need to write pre-encoded dividend checks requires E-13B Font for this application, and this, in turn, would suggest that E-13B Font be used for all the applications to minimize the equipment required. Referring again to the insurance companies, there is a very interesting application problem which can be solved by the use of E-13 B Font reentry printing. This relates to the issuance of drafts against the accounts of policy holders for payment of premiums. This process is known by such names as Bank-O-Matic, Check-O-Matic, PruMatic, and others, depending upon the company involved. With this plan, an agreement is made between the company and the policy holder whereby the company is permitted to issue a draft on the account of the policy holder. This draft is usually in the amount of one-twelveth of the annual premium. The company issues no notices and reed not process payments in the normal way, thereby saving clerical cost. In exchange, the policy holder gets the equivalent of the annual premium without actually having to pay the annual premium as a lump sum. Since these checks are drawn on banks all over the country and on many thousands of different individual accounts, it is impractical for the insurance company to maintain a supply of pre-encoded drafts for each policy holder. As a consequence of this, these drafts presently bear no E-13B Font printing. This is the problem. The volume of these drafts is significant. . . Significant to the point that the banks are starting to complain to the insurance companies. Since the bank in which the account of each customer is located is a party to the agreement, the banks may refuse to participate in such plans. The banks are in a position, therefore, to make their complaint heard, and the insur 28 ance companies are, in fact, actively seeking a solution to the problem. There is a readily-available solution to this problem. . . A General Electric re-entry printer using E-13B MICR Font. The transit number of the bank on which the draft is to be drawn would be contained in the master file record of each policy holder together with his account number. When the draft is printed on the re-entry printer, the name of the bank, the name of the policy holder, the date and the amount would be printed in conventional gothic font, and the transit number, policy holder's account number and the amount of the draft would be printed in E-13B Font at the bottom of the draft, making it fully qualified. Only thirty-two characters of file space would be required as a minimum. The insurance company would provide space on the acceptance form, used to secure bank agreement, in which the bank would specify each character position to the left of the amount field, thereby making provision for inclusion of the transaction code. In the issuance of dividend checks by a large organization, or by a bank corporate trust department acting as its agent, the problem of variable E-13B Font data again arises. If the dividend checks are to be drawn on a number of banks around the country, in order to use local funds, the transit number will be different for each bank, and the account number of the corporation paying the dividend will be different at each bank. .. A code in each stockholder master file record can be used to cause the check for each stockholder to be drawn on the appropriate bank. If pre-encoded checks are used, the check data must be sorted by bank code and the checks for each bank printed separately. With the re-entry printer, this sorting is unnecessary. Even if the checks are drawn on one bank, the amount and serial number are variable, and if the checks are being prepared by a bank's corporate trust department, the bank has a vested interest in getting the amount printed before issuance. If the paying corporation is issuing the checks the bank will probably be willing to talk about service charge consideration for issuance of fully qualified checks. The issuing corporation will find, also, that reconcilement will be simplified if the serial number is printed on an other-wise blank check, rather than being preprinted. Since any spoilage caused by set-up and operator error will not leave gaps in the serial number sequence. Oh, by the way, bankers to whom I have talked indicate that the auditor will be enchanted by the idea that dividend checks prepared in advance may be read back and compared on line, check by check, on account number and amount just prior to mailing. I think that these two examples are enough from the ivory tower. You fellows are on the firing line in daily contact with the customer and his needs and are able to do a far better job than I of finding the applications that certainly exist for the E-13 B Font Re-entry printer. There have been those who have asserted that a high-speed printer could not be built to print E-13B magnetic font acceptably. I will admit that there are some pretty good arguments which can be advanced in support of the contention. However, there is one argument on the side of those who said It could be done. . . . . . It has been done! These documents were printed by a GE 210 re-entry printer. They were printed with magnetic ink ribbon at 319 lines per-minute. .. When read online and compared character for character using a GE 210, the acceptance rate was in excess of ninety nine-point-five per-cent for several passes of several thousand documents. Remember that these documents have not been handled, so don't quote that number, but it does serve to illustrate the point that re-entry printing of E-13B Font MICR documents is at the very least, possible. The best news of all. .. You will see the G E 210 re-entry printer in operation when you tour Deer Valley later this week. This is the printer to be used with the GE 210 system at the General Electric Credit Corporation to do installment loan accounting for over five-hundred-thousand accounts in the GECC, New York Region. Thanks, and here is Ranger Captain O'Rourke.
T. J. O'ROURKE With the information Byron has just given you, plus the tools Hal Wells and his boys are providing, we ought to be able to greatly expand our grip on the market, using the present 210 system. In fact, let's take a good look at the features of the 210 system. . . . The GE 210 is proven. .. There are some thirty-five of them actually operating today. It's reliable. Our statistics show that the 210 has an average up-time of better than ninety-nine per-cent. The GE 210, with its mod three check, has more powerful self-checking features than any other system on the market. For auditors and others who worry about "Losing Data", this is a powerful selling feature. For people who worry about using a binary machine for business data processing, we have the answer with the GE 210. . .. High speed tapes! How about 50 KC! Page 29 Does your customer worry about the lost time involved in trying to write on tape bad spots? Tell him about the block-erase features on the GE 210. How about the cost of providing simultaneity with other systems? The GE 210 has read-write compute-buffering as standard equipment. No extra price. Printers? Take your pick. They are all available with the 210 system. Delivery? Just wire in the order and stand back out of the way. With our new installation package, we can set up over the weekend. The minor amount of site preparation required can be done without disturbing the work functions of the people presently occupying the space. On the air in a hurry? Just take a look: We have operational demand deposit accounting and transit packages that can put your customer in operation a full year ahead of his competitors... A full year of dollar savings that the bank down the street won't have. A pretty healthy competitive edge, I would say. How about price difference? When we only had the 210 to sell, we managed to overcome some very discouraging price differentials. You might check with Bud Bellamak and see how he justified $3200 per-month price difference to the First National Bank of Denver. Sometimes, price isn't the real reason the customer says the price is too great. Maybe he's really saying "Justify it" I think you can!! Gentlemen, this is our banking market. . . . . We've just barely scratched the surface. The bulk of the business is still untouched. . . . . There's a lot of money left in the banking market. . . . . You've heard Hal Wells tell you how to go after the rest of this market. . . . Co-op banking, But our talking doesn't get the job done. .. .. You've got to get out there and break this market wide open . . . . . . . It's up to you !
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