The Office of the Future

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Some in the business bridle at such assertions. "This scare talk about drastic changes in the office structure, which is worrying potential users, is an IBM misconception," declares Robert Hendel, 32-year-old president of LCS Corp., a small supplier of word processing systems. "IBM tries to make word processing complex so that people will think they need an IBM to help them," he maintains. "But that kind of talk is just gobbledygook."

Just for the present, Hendel may have a point. Most office automation products are being sold as stand-alone equipment, machines that operate independently and are not connected to other machines. This provides a secretary, for example, with a more productive typewriter. But this hardware is only the first step toward the office of the future. Gaining the most from automation demands that the new office machines be linked together to form integrated systems. And few would argue that setting up such systems without disrupting an office is going to be a simple task.

Undoubtedly it will be Xerox and IBM that will find the way. "The entire industry knows that the office environment is moving toward the integrated system, but it will be hard to define," says Jonathan Pugh III, marketing head of Lexitron Corp., a builder of display text editors. "IBM and Xerox will dictate the future because of their marketing power," he says. Timothy C. Cronin, president of Inforex, Inc., an office-equipment supplier, agrees: "With IBM and Xerox pouring out $1.5 billion yearly in R&D, they will control the pace of technology in their interest."

The long-anticipated battle between the two giants will occur in this market. And it could be difficult for either of them to control the pace of change. "IBM and Xerox are jockeying for position now, and the battleground is the office," Cronin declares. "How they plan to attack will unfold over the next two years, and it will be one of the most significant factors shaping the office of the future. "

The Struggle for Cost-Control

Word processing was used originally by IBM as a marketing umbrella for its broad line of office products, and some people still call it a "buzz word." The definition that makes most sense is that word processing (WP) is the manipulation of words, sentences, and paragraphs by advanced hardware, while data processing (EDP) is the manipulation of numbers. But even if the definition is not sharp, most everyone agrees that WP is sweeping into the office now and will be the springboard from which the office will automate.

Word processing is coming on strong because businesses no longer can afford the custom approach to doing office work. Paperwork is growing explosively, and in the traditional "one-on-one" office arrangement—the secretary-boss combination—productivity is largely dependent on how fast the secretary can move her hands and feet.

"Costs in the office are running uncontrolled," declares Alan Purchase, senior industrial economist at Stanford Research Institute, who recently made a major study of future office equipment markets. "Where office costs used to be 20% to 30% of the total in a company, they have now grown to 40% to 50% of all costs." Rising salaries and demands to process more information are growing at geometric rates. IBM says that the average secretary's salary is 68% higher, and the cost of turning out a business letter is 40% more than it was 10 years ago.

More important, Purchase says, "the current recession has brought a real awareness by companies that they have to identify and control office costs and improve productivity." A Quantum Science Corp. survey showed that while the recession had forced a cut in overall office spending, it was also responsible for increasing text-editing typewriter installations. Nearly one-fifth of all offices surveyed, and 39% of the larger ones, either planned or had recently added automatic typewriters.

But the office's productivity problems have been developing for a long time. "Many offices are not even held accountable for productivity," notes David L. Holzman, Xerox' market development manager. "In studies we've made, 50% of all offices are just a part of the overhead." Further, the shift of the U.S. economy to service-based industries (they will employ 47% of all U.S. workers by 1980) and the growth of clerical employees are colliding with soaring clerical labor costs, growing shortages of skilled personnel, and changing social attitudes.

"This climate is almost forcing the revolution in the office," declares Robert E. Verrando, marketing chief for Xerox' Office Systems Div. But word processing is a tough sell, particularly since it so often changes the traditional secretary-executive relationship. "The biggest problem we face is the office wife," says Lexitron's Pugh. "She likes giving total loyalty to one boss, and he likes getting it."