The Office of the Future

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But increased productivity from the addition of new hardware requires restructuring and reorganizing the office. To many, the willingness of office workers to make such changes and to discipline themselves to a system is the major factor in determining how quickly WP catches on.

But business may not be able to wait. "People will adapt nicely to office systems—if their arms are broken," says William F. Laughlin, IBM vice-president, only half facetiously. "And we're in the twisting stage now," he adds.

Top managements have to look at the cost of handling paperwork in the same way that they view the factory environment and data processing, says Pugh of Lexitron. So far, they have not. And this is why the service sector shows high annual increases in cost—in the 5% to 7% range—while annual unit labor costs in the manufacturing sector steadily decline from a very low base.

Factories achieve their cost savings by investing capital to replace labor in production. "But we haven't brought technology to bear on the office," declares Robert J. Potter, president of Xerox' Office Systems Div. "We have invested only peanuts in capital equipment for the office." Investment in capital equipment per office worker is only about $2,000 annually, far lower than the $25,000 spent for each manufacturing employee, figures SRI's Purchase. But he sees the amount being spent annually on the office per white-collar worker growing to $10,000 or more by 1985. This would produce a significant market. "There's some speculation that WP will be bigger than data processing in 10 years," says James N. Mills, president of Litton Industries, Inc.'s Royal Typewriter Co.

Lifting Productivity Word processing began quite accidentally and inauspiciously in 1964 when IBM introduced its MT/ST (for magnetic tape, Selectric typewriter). IBM saw it only as an entry into the automatic letter writer market (repetitive typing of form letters), and it bravely forecast that 6,000 would be sold. But what turned the MT/ST into a smashing success was its use instead as a text editor. Secretarial productivity was vastly increased, since a letter had to be typed only once. This was done by capturing keystrokes in electronic form and storing them on the tape for fast, precise replay. Revising or correcting is done by typing over the word or sentence to be changed, with the machine rerecording the tape at that spot. There is also space on the tape to insert words. The mechanical text editors, which cost between $5,000 to $13,000, have most of the market today.

But sales are growing fastest in a second generation stand-alone model, and it is happening without the marketing muscle of a Xerox or IBM. These units, most of them produced so far by Lexitron and Vydec Corp., have a TV screen to display a page of text. The keyboard is separated from the typewriter so that a page can be typed automatically while the operator starts work on the next page.

The display text editor is catching on fast, even though it costs nearly twice as much, because it is much faster and easier to use. What the operator types shows directly on the screen rather than on a sheet of paper. Once the document on the screen is correct, the operator pushes a button to store the document in a tape or disk memory and to print it out on the typewriter.

Shipments of all editing typewriters have been growing at the rate of nearly 50% annually. Estimates of total units in the field vary widely, but it could hit 300,000 by the end of 1975. SRI's Purchase estimates that by 1981 the total will reach 910,000 or a "very strong average annual growth rate of 23.3%." The value of annual shipments should triple to more than $1.3 billion.

Before text can be edited on a word processor, it has to be originated, and the best way to do it still is by using dictating machines. But this has been a slow growth business, since most executives either need to write material in longhand or they like the idea of dictating directly to their secretaries for status reasons. "Even today, only 26% of the people who should use a dictating machine actually use it," says Gene W. Milner, president of Lanier Business Products, a major supplier.