Feasibility studies -- Their components and application;

              Feasibility Studies—Their Components and Application
by JAMES B. MILLER Senior Accountant, Pittsburgh Office
Presented before the Advanced Accounting students of the University of Pittsburgh—November 1962
"We have witnessed an entirely new philosophy of business operation in the rapid development of the science of business management and of professional business managers trained in the operation of complex business in a highly competitive atmosphere. As part of this change, it is now recognized that there is a very strong tool of management in the proper use of the information available through accounting records. The utilization of this information has resulted in the need for faster, more efficient methods of processing basic accounting data. To fill this demand calls for the same continued emphasis on mechanization and technological improvements in the office areas, as in the plants. Although there appears to have been some resistance to this trend and, therefore, some delay in the progress made in the office, now the general applicability of the industrial engineering time and motion measurements to the office function is developing very rapidly, as is also the field of machine accounting. In fact, the develop­ments
in machines for use in accounting have kept pace with the increases in horsepower in automobiles, the jet age of airplanes, and the use of atomic energy—and we have just begun."1
A statement such as the one preceding strongly supports mechan­ization,
for the addition of sufficient personnel to increase materially the speed and efficiency of processing data is generally uneconomical, impracticable, and undesirable. A statement such as the one preceding also implies that mechanization is the answer to business manage­ment's
cry for more data, faster. However, place yourself in the shoes of a business manager. Should he be willing to commit his business to paying anywhere from $5,000 to $500,000, or more, an­nually
for rentals of data-processing equipment? Should he be willing to commit his business to some amount, perhaps equal to or larger than annual rentals, for conversion or improvement of the existing system? Remember, regression from an unsuccessful installation of a data-processing system to the system previously used may be as costly as converting to a new system, if not more so. In short,
1 "Judging the Profitability of Machine Accounting" B. H. Semler, N.A.C.A.
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