The New Software: A Powerful Ally
The one thing that's made the personal business computers that we described in our October issue cost-efficient is the software. Within the last two years, several new software packages have been developed for these small computers that nontechnical people can learn to use quickly and easily. Now most of us can begin to make sophisticated financial analyses and forecasts, manage various kinds of information, and, in some cases, even do general accounting.
When the desk-top microcomputer was introduced about five years ago, it was envisioned as the great equalizer for small business, an essential tool that would allow people running small companies to have the same data processing sophistication that large companies could already afford. In the rush to create the programs to make this great equalization possible, computer specialists often came up with software that was error-prone, limited in scope, and difficult to use. As a result, according to a survey conducted last year by Focus Research Systems Inc. of West Hartford, Conn., less than 7% of American small businesses (those with fewer than 500 employees or less than $25 million in sales) used on-site computers. The over-whelming majority -- over 80% -- still used manual data processing.
But 25% of the businesses surveyed indicated an interest in acquiring a computer for some form of data processing, and much of that interest can be attributed to a relatively recent accessibility in the software that's coming on the market.
That accessibility can be traced back to the time, about two years ago, when Dan Bricklin, Bob Frankston, and the company they formed developed VisiCalc. The significance of VisiCalc (see page 104) isn't that it's full of whiz-bang technical features, but that it's written for non-technical people. "Computer nuts are willing to read long manuals and learn a computer language," says Frankston. "Hobbyists will put up with mistakes. Consumers won't. Consumers don't love computers; they love what they can do with computers."
Since VisiCalc was introduced in October 1979, other software authors and publishers have seen the light and begun to produce programs that make all sorts of mundane business tasks easier and less boring. The bread-and-butter business applications involve simple, repetitious number crunching, the very work that is least gratifying in a small business and that is the forte of personal business computers.
Software for personal business computers shouldn't be expected to perform any task as quickly or in the volume that mini- or mainframe computers can produce. For example, a modest payroll program might take hours instead of minutes to complete its number and file processing. Micro software is inherently limited by the speed of its electronics and, most important, by the size of its working memory. "If a company has more than 500 accounts receivable, issues more than 500 checks a month, or stocks more than 9,000 inventory items, a personal business computer is simply not practical," says Henry Buttfield, an independent computer consultant. Apple Computer Inc.'s rule of thumb is that their little machine, depending on the software, typically can handle the general accounting for a business with up to $5 million in sales annually, although the limit varies with the nature and volume of the company's financial activity.
Business software spans a wide range of prices: For example, a recent count of the general-ledger programs available for the Radio Shack TRS-80 turned up 17 different packages retailing from $19.95 to $750. Many programs can be bought off the shelf in one of the numerous computer stores or ordered by mail from software publishers or the hardware manufacturers. Warranties tend to be limited to replacement for faulty disks, and money-back guarantees are rare.
Whatever the source, though, the prospective software buyer needs to know three things before laying out cash for the software (which usually amounts to a vinyl notebook containing a user's manual and one or two 5 1/4-inch floppy disks).
First, you need to know that you can use the program. In computerese, you want to know whether the program is "user-friendly." That means that you don't have to learn many special codes to tell the computer what to do, that what you see on the screen is easy to understand and respond to, and that the manuals and documentation are understandable to a novice. Ultimately, finding user-friendly software also means making sure that it performs the tasks you want done.
Second, you need to know that your computer can run the program. Personal business computers use two different kinds of software at the same time -- systems software (called the operating system), which actually operates the machine once you turn it on, and applications software, which translates that you want to do into machine language. You don't need to know anything about the operating system except its name, so you can match the right programs to the right machine. CP/M, the operating system devised by Digital Research Inc. of Pacific Grove, Calif., has become a de facto standard for personal business computers since Xerox decided to base its new Model 820 computer on the system. In order to use a CP/M-based program on an Apple or IBM computer, however, you have to buy an extra piece of hardware at an additional cost of up to $350.
Third, you need to know that the machine-program combination can handle the amount of information you'll put into it during any one operation, and that means knowing the working memory capacity. In program specifications, memory is measured in K's, which represents 1,024 bytes or characters. Typical business applications software needs 32K or more bytes of working memory, as well as two disk drives.
The actual tasks that currently available business software can perform on personal business computers generally fall into three categories: information management, financial analysis and modeling, and general accounting. (These computers can also handle sophisticated word-processing software, but that requires letter-quality printers, which cost upwards of $2,000 apiece and bring the cost of the systems we cited in the October issue above our $5,000 limit.)
Data- or information-management soft-ware can turn a personal business computer into a super-efficient electronic filing system, capable of sorting or compiling detailed information on suppliers, customers, or employees by pushing a few typewriter-like keys.Once data has been entered into appropriately selected categories, supplier files can be retrieved by kinds of products or by location, customer files by annual billings or by zip code, or employee files by date of hiring or salary level.A single magnetic disk the size of a 45-rpm record can store hundreds of pages of information, which allows substantial savings in the cost and hassle of filing cabinets.
The sophistication of these programs ranges from simple index programs that turn the computer into an electronic Rolodex-style circular card file all the way to true data-base management systems, which operate on files with great flexibility and speed. Three independent vendors offer "relational" data-base programs: Condor Computer Corp. of Ann Arbor, Mich., Micro Data Base Systems Inc. of Lafayette, Ind., and Ashton-Tate of Los Angeles.
Medium-priced file management programs are less versatile, but they are suitable for small business information management. Three typical vendors are: Stoneware Microcomputer Products of San Rafael, Calif. (DB Master 3.0), Personal Software of Sunnyvale, Calif. (VisiFile), Micro Lab of Highland Park, Ill. (Data Factory and Invoice Factory), and North American Business Systems of St. Louis (SOLUTION).
More modest information management software can also be the handiest for executives. These are truly personal computer programs, dedicated to maintaining an individual's appointment calendar, name-and-address files, or expense account records. The most popular of these programs include PFS (Personal Filing System) from Software Publishing of Mountain View, Calif., and The NAD (Name and Address) System from Structured Systems Group of Oakland, Calif. Two new programs in the electronic index-card category are VisiDex from Personal Software of Sunnyvale, Calif., and Datadex from Information Unlimited Software of Berkeley, Calif.
The tedious spreadsheet-and-calculator routine for budgeting or projecting costs has been banished forever by financial analysis software for personal business computers. The program creates an electronic spreadsheet on the machine's display screen: Once the user has defined all of the assumptions for the projection, he can change any variable and the program will automatically recalculate any related values. Financial modeling programs differ slightly because the format for analysis is built into the program.
VisiCalc, from Personal Software of Sunnyvale, Calif., was the first electronic spreadsheet and has become the best-selling business applications program ever introduced. In the last year, VisiCalc has been joined on the market by numerous financial analysis programs, including SuperCalc from Sorcim Corp. of Santa Clara, Calif., T -- Maker II from Lifeboat Associates of New York City, TARGET from Advanced Management Strategies of Atlanta, and Micro DSS/Finance from Ferox Microsystems of Arlington, Va.
Financial modeling programs provide a built-in model for analysis and feature on-screen instructions and prompts to help adapt to specific problems. By keying in a range of values for comparison, the user can determine the best inventory strategies or financing policies to increase a company's cash flow. Three useful modeling programs are Desktop Plan II from Personal Software, MINIMODEL from Westico of Norwalk, Conn., and Oracle-80 from Instant Software of Peterborough, N.H.
General accounting programs were actually the first business software to be offeral commercially for personal business offered commercially for personal business from several years of users' experiences and suggestions, there are still limitations. And really form-fitting the software to your business needs may require a higher level of understanding of computers than we're recommending for notices.
A good accounting program will allow data to be entered or revised easily, will efficiently process the information, correctly fill out checks, forms, reports, and journals, and produce audit trails that can clearly be followed by an accountant.
Simple accounting programs perform a single task such as general ledger, accounts receivable, accounts payable, inventory control, or order entry. Sophisticated accounting software, such as the Solution from Graham-Dorian Software of Ft. Worth, Tex., or Accounting Plus from Systems Plus of Palo Alto, Calif., integrates financial information for a variety of accounting tasks. A business can automate its accounting in steps by buying and separately implementing program modules for specific tasks, such as accounts receivable or payroll.
In addition to "horizontal" packages for generalized business tasks, some companies have published "vertical" applications programs that are geared to the specific needs and vocabulary of a type of business or profession, such as retailing or dentistry.