Unlocking Management Creativity

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In the old days -- five years ago, to be exact -- a financial spreadsheet was manufactured out of actual paper and ink. It often measured two feet across and was unlikely to remain long on top of a desk without having coffee spilled on it. Against its typically dull-green Eye-Ease background were crosshatched some 7,500 spaces into which accountants, bookkeepers, treasurers, and business planners squeezed their numbers, tiny oblong by tiny oblong, pencil by resharpened pencil. It was white-collar sweatshop work; a manager performing a five-year projection involving even a handful of products could count on many weekends in the office and wastebaskets full of jettisoned calculations.

Happily, that kind of tedium drew to an end with the dawning of the age of the electronic spreadsheet in October 1979, the month that VisiCalc, the first of the new breed, was shipped by Software Arts Inc. Today there are some 150 personal, or desktop, makes of microcomputers capable of running financial-planning programs. Since there are an estimated five dozen such electronic spreadsheets, the permutations of hardware and software themselves are enough to fill any one of them to overflowing.

But now the headlong rush of technology is antiquating even those 60 programs and the concomitant graphing and database software that followed on their heels, plugging into microcomputers disk by disk. Last July, Context Management Systems, of Torrance, Calif., released Context MBA, a complex, highly sophisticated program that integrates five separate applications on a single disk. Without changing disks, a user now can switch among business modeling, graph-making, word processing, telecommunications, and database functions with only a keystroke or two and can rapidly plug information utilized in one mode into any other mode. Context claims that MBA, which retails at $695 for the IBM version and $795 for the Hewlett-Packard version, is "among the largest microcomputer programs ever written." The idea behind such almost-unimaginable -- to personal computing, anyway -- immensity is that the speed of calculation and the handiness of formatting information in different ways will fire up management creativity and make desktops more productive.

In a classically free-enterprise instance of inventors separately responding to essentially the same inspiration -- the mother of invention in this case being a financial-planning market estimated to reach some $300 million by 1985 -- the publication of MBA was followed within a few months by a similarly integrated management tool created cross-country by Lotus Development Corp. in Cambridge, Mass. Called 1-2-3 (both because it is as fast as that, explains Lotus, and because it combines three functions: modeling, graphics and database), the $495 program, Lotus claims, "will advance computer productivity in the same order of magnitude as [did] the introduction of the electronic spreadsheet."

If that prediction means that five dozen more integrated, multitask, executive-productivity programs are shortly to explode on the desktop scene, ranagers are in for some special decision-making headaches. To appreciate the full dimensions and various nuances of MBA and 1-2-3, and to be able to distinguish the important differences between them requires weeks of concentrated study even by a computer-literate manager. But the fuse may be lit already. Apple's new Lisa runs software that is not unlike MBA and 1-2-3 (it is not quite so readily integrated but in many ways is more sophisticated), Microsoft Inc has made its spreadsheet program considerably more far-reaching; and VisiCorp has announced (but as of this writing has not released) a new, "mouse"-driven generation of business software that, according to the company, "lets any personal computer user easily work with a number of application products at one time." These are just a few instances of what already promises to be another inundation of financial-management computerized tools, a gathering that is sure to be as diverse -- and therefore as confusing -- as the first wave.

To help sort out the factors and demonstrate how such programs might be applied to business operations, INC. has studied 1-2-3 and Context MBA, the only two fully integrated worksheet programs available in the desktop market this spring. 1-2-3, which requires a minimum of 192 kilobytes of random access memory (RAM), was run on an IBM Personal Computer, Context MBA, which eats up 256K, was run on a Hewlett-Packard 9816. This report is not meant to be an opinionated review so much as a simplified presentation of the applications of the programs, together with a few elements of comparison.

Essentially, a worksheet program saves time and erasers -- lots of both. Just as on a paper ledger sheet, virtually any aspect of a business can be modeled, by plugging raw data into a computer, a manager can review current conditions and can try out a variety of "what if" situations, eventually determining, at least so far as such statistical exercises point the way, the most productive strategies.

For example, by setting up a table of accounts receivable, accounts payable, interest rates, and so on, cash flow can be analyzed. By comparing results over the last five years, say, profit margin and profitability can be examined and weaknesses determined. Operating models of balance sheets for a company's divisions can be created and consolidated. Bottom line results can be studied in terms of differing inflation rates or accounting procedures. And so on through the dynamics of modern enterprise. Indeed, so extensive are the applications of an integrated spreadsheet, with its ability to accumulate data freely from many sources, that the capacity of both MBA and 1-2-3 are themselves almost endless.

It so happens that 1-2-3's capacity is more endless than MBA's. Its spreadsheet is made up of 2,048 rows by 256 columns -- the largest electronic spreadsheet available, claims Lotus MBA's is 999 rows by 95 columns. But much of 1-2-3's vastness is unchartable land: Because of memory limitations, not all of it is usable at once. The entire spreadsheet of MBA, however, can be utilized at once. Each of Lotus's 524,288 and Context's 94,905 areas thus defined in its basic spreadsheet format is called a cell, and into each cell can be placed a value (or other material) upon which the computer will, if called upon, perform a calculation. In many instances, that calculation can be accomplished literally in the blink of an eye. To appreciate the significance of this modern miracle, consider that the same amount of 1-2-3 work space on a typical 25-column by 41-row ledger leaf would necessitate a pad of 511 pages.

The MBA spreadsheet contains only 18% of the amount of cells as the 1-2-3, but it makes up in cell capacity the ground thus given away in sheer numbers. In the modeling, or numeric-analysis mode, each MBA cell can hold 502 characters versus 1-2-3's 240. Unless you are placing a satellite in precise orbit, a given value won't require that much room, but a formula or graph instruction might (see illustrations). In its word processing and database modes, an individual MBA cell can hold about 8,000 characters, or about three 55-line pages. And if that isn't enough for a stern interoffice memo, it can then spill over into a contiguous cell. 1-2-3 lacks a true word-processing function altogether. (Lotus promises that its next revision -- or "rev" -- will contain a word-processing program.)

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