Division of Research Graduate School of Business Administration The University of Michigan A SURVEY OF MICROCOMPUTER SELECTION AND USE IN BUSINESS SCHOOLS Working Paper NO. 465 Essam Mahmoud The University of Michigan/Flint Michael Lane West Virginia University FOR DISCUSSION PURPOSES ONLY None of this material is to be quoted or reproduced without the expressed permissicn of the Division of Research. June 1986

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2 Introduction There has been a revolutionary increase in the use of desk top computers over the last several years. In 1980, the number of desk top computers increased by approximately 53,000 each month. By the 1990's that number could reach 13 million (Business Week, September, 1984). Accompanying this increase in hardware sales is an increase in software availability for such computers. Micro software sales totaled $936 million in 1983 (Sigel, 1983). The selection of microcomputers and requisite software is becoming more difficult for management because of the increasing number of manufacturers and models. Keen and Woodman (1984) emphasize the importance of using a proper approach in acquiring microcomputers. They indicate that the worst approach is to buy them one by one without an overall plan as t# their use. Not only will the costs get out of control, but also the machines may not be able to work together. For example, a $3,000 investment in a stand-alone microcomputer represents a small risk, one which in many cases can be paid back in well under a year. A problem arises, however, when an organization plans to invest in 100 or more machines. Consider the hidden costs. If software, extra disk storage, printers, modems for communications, maintenance, and other costs are added, the initial cost of $3,000 per machine may skyrocket to $10,000. If the machines are incompatible with the main computing communications equipment, much of that investment is lost. Compatibility with available software is also essential, if money is not to be wasted. It is important, therefore, to consider these and other factors when selecting machines which match the needs of the organization. Making the right computer choices can be especially critical for business schools, which generally need to purchase equipment in volume for students and faculty and

3 clerical use. Budget constraints demand the equipment be chosen quite carefully so that costly mistakes can be avoided. This paper presents the results of a survey of academic schools of business that shows how over sixty schools made their decision. Today's computers, many of which rely on a chip smaller than a postage stamp, are descendants of machines that filled a room and required miles of wiring to do their job (Salerno, 1981). Moreover, the technology is constantly changing. A recent article in Business Week (June 10, 1985) describes the new area of "superchips," wafers containing hundreds of chips that will each hold 4 million transistors. With the development of superchips and computer graphics technology, managers can scan a single picture rather than read through reams of printouts (TaKeuchi and Schmidt, 1980). Computer graphics can be very useful in planning and control, marketing applications, competitive analysis, product planning and retail productive analysis. The Importance of Selecting Microcomputers for Business Schools Business schools across the nation are attempting to integrate computers into their curricula, shifting from mainframe and minicomputers to microcomputers (Pica, 1985; Smith and Trent, 1985). Many more topics are now being taught in schools of business with the assistance of microcomputers and integrated software (Coppage, 1985), mirroring the shift in the business world to increased reliance on computers for management and control (Kaplan, 1983). Business schools teach model building and the use of computer-based models in Decision Support Systems (DSS). For example, many schools use computer-based models in discussing topics such as determining manufacturing needs, inventory levels, investment alternatives, and joint ventures. Computer-based models are important in achieving many managerial tasks such as

4 financial forecasting, production planning, man power collections, and market projections (Kaplan, 1983). It is clear that there is a need to integrate and use the computer technology by business schools. However, it is important to choose the most appropriate hardware or software for business schools, too. It is just as crucial for business schools as for businesses to select the appropriate hardware and software. While businesses and business schools differ in decision making processes and the uses to which computers are put, they face similar situations in regards to computer acquisition and support. The selection of hardware and software is equally important for both businesses and academic institutions. Obviously, the test hardware is only as good as the software that accompanies it. In addition, business schools or businesses that use diversified computer facilities are not as efficient as those using integrated systems. For all of those reasons, careful study and assessment of organizational need should precede selection of computer hardware and software. Literature Review The literature on- computer selection and use include no formally documented surveys of business schools. However, the growing literature on software selection includes information about the evaluation and selection of software for Decision Support Systems. The most relevant literature in this area is on the selection of statistical and forecasting packages, accounting packages, financial packages, and general factors for evaluating DSS (Francis and Heiberger, 1975; Muller, 1980; Levitan, 1981; Mahmoud, 1983; and Keen and Woodman, 1984). In the area of small business, Mahmoud and Malhotra (1986) and Karasik (1984) among others, have discussed some principles that small businesses should consider in selecting their computers. Sanders, Reed, and

5 Munter (1982) noted some of the major costs to be considered when buying packaged software for micros and minis. While Mahmoud and Malhotra (1986) discussed appropriate procedures that small businesses would follow in selecting their hardware and software, information provided related to the selection process in business schools is very limited. Frand and McLean (1985) have completed two surveys about the computer technology at business schools for a selected number of business schools. The present study investigates the process used by business schools in selecting their hardware and software as a first step toward developing guidelines and prescriptions for computer selection and use. Methodology Data were collected by sending out a questionnaire to business schools in the U.S. which have Master of Business Administration (MBA) programs and which have been accredited at both graduate and undergraduate levels by The American Assembly of Collegiate Schools of Business (AACSB). The purpose of the questionnaire was to investigate microcomputer selection in business schools that currently use microcomputers and those planning to use them. The questionnaire was also used to identify the level and type of microcomputer usage by the various departments and to identify the types of equipment and software used. Usable questionnaires were received from 62 business schools that were using or planning to use microcomputers. The response rate was 41.3 percent. The list used to generate the sample was Lovejoy's Guide to Business Schools (1983). A sample of 150 schools was drawn from the above list by selecting every other school. Data were coded and statistically

6 analyzed by using SAS (SAS Institute Inc., 1980) and Lotus 1-2-3 packages. The results were analyzed using frequency analysis and cross-tabulations. Needs Considered in Microcomputer Purchase Decisions Table I summarizes the responses to a question about whose needs most influenced the decision to purchase microcomputers. It can be seen that the majority of the schools considered the student needs as the most important influence on microcomputer selection. Insert Table 1 about here It is important to note that even with the increased emphasis on faculty research, most of the respondents (81 percent) indicated that students were their main concern in selecting microcomputers. The needs of faculty and researchers were cited as most important by only 17 percent of the respondents, while administration, with one response, accounted for two percent. The Frand and McLean survey (1985), which dealt with factors which led business schools to expand on their present micro systems, revealed that faculty ranked first and students ranked second. Otherwise, rankings are similar to those of the present survey. Procedures Used in the Search Stage of Decision Making Information is a key element in the selection of microcomputers due to the dynamic technological changes occurring in the computer industry. Table 2 outlines the specific procedure used by business schools in collecting information in the search stage of the decision making process. Insert Table 2 about here

7 A variety of sources were used by 80 percent of those who did gather information in the search stage. Note the almost 20 percent of the business schools in the sample did not request any information prior to acquiring microcomputers. This suggests that a significant minority of schools do not use a systematic approach when selecting their systems. It has been reported that between one-third and one-half of the computer systems installed are not properly selected (Vaid-Raizada, 1983). One way to avoid this problem is to develop a formal selection procedure in choosing a microcomputer system. It is important that business schools apply such a systematic procedure when considering microcomputers for their curricula. Furthermore, before being influenced by attractive offers from some vendors, schools should analyze these offers carefully. Search and Collecting Microcomputer Information Table 3 shows the number of computer firms that business schools contacted before purchasing their microcomputers. Over 70 percent of the respondents contacted more than three different vendors before they bought their microcomputers. The number of firms contacted may reflect care in selection and/or the increasing number of computer manufacturers. Insert Table 3 about here Almost 14 percent contacted two firms, while only nine schools (15 percent) contacted only one firm. These results, coupled with responses to the question on time spent in the decision process, indicate that most colleges and universities take microcomputer selection seriously.

8 With respect to the decision making process, it is important to collect information on both systems currently in use and potentially new compatible systems. This will enable business schools to identify the pros and cons of a diverse set of micro systems. Furthermore, monitoring the change of information and new technology would enable business schools to test and select the appropriate micros. Time Spent on the Decision Making Process Developing search procedures for micro systems and contacting the appropriate firms takes up a considerable amount of time. Table 4 shows how much time respondents spend on the entire decision making process. Insert Table 4 about here Only four respondents (6.7 percent) indicated that they spent less than one month on the decision making process. Thirty-five percent indicated that they spent one to three months and 23 percent indicated they spent three to six months. Another 35 percent indicated that they spent more than six months. The fact that 58 percent of the respondents spent one to six months in the decision making process may reflect the importance attached to computer selection. For business, Petre (1983) found that the computer selection process normally takes between one and four months. In this sample of business schools, the average was six months. It is not clear whether the longer time period ensures more satisfactory results. Number of Present Systems at Business Schools

9 The number of microcomputer systems that are presently being used at the sample schools is shown in Table 5. In addition, the number of IBM systems is compared with the number of non-IBM systems currently being used. Insert Table 5 about here The results indicate that most schools have either one or three or more computer systems in operation (97 percent of total sample). Only two schools reported having two systems (3 percent of the total). Of the 30 schools that have only one system, 16 schools (53 percent) have IBM systems and 14 (47 percent) have some other brand. However, for those schools having three or more systems, all have IBM systems (48 percent of the total sample). The two schools which reported having two systems also had IBM. In summary, of the 62 schools that have microcomputer systems, all but 14 (22.6 percent) have IBM systems. The non IBM users are those with only one system. Criteria for Selecting Microcomputers To determine the criteria that are used in the selection of microcomputers, a list of different criteria was presented in the questionnaire along with space for respondents to add others. The respondents were asked to rate the most important selection criteria on a scale of one to five, with five being most important and one being least important. These criteria were developed through exploratory research. This phase involved a review of the academic and trade literature, interviews with microcomputer representatives, and a pretest sample. The relative importance of factors involved is given in Table 6. End users, type of software, reputation of manufacturer, and support services were the most important criteria. These

10.were not, however, the only criteria schools of business considered in their selection process (see Table 6). Insert Table 6 about here Selection criteria are usually developed by the people involved in the selection process. Table 6 shows that end users, 4.61, was highest ranked and type of software available, 4.51, rated second on the list. Reputation of manufacturers at 4.00 and vendor support at 3.86, also rated high on the list. Memory capacity as well as grants and discounts were rated the same with an average score of 3.72. It should be noted that ergonomics and previous experience were on the bottom of the list of criteria considered in selecting micros. This result differs from another study by Mahmoud and Malhotra (1986) which revealed that vendor support ranked first in selecting their microcomputers. The high ranking of both end users and type of software available reflects the business school's emphasis on applications of the microcomputer, while the relatively strong emphasis on reputation of manufacturer and vendor support reflects a concern for performance, perhaps to avoid costly computer down-time. This may be attributed to the greater potential for in-house support personnel being available in colleges of business as compared to small businesses. People Involved in Determining the Criteria for Selection Table 7 shows the key people who are involved in determining the selection criteria used in choosing microcomputers for business schools.

11 Insert Table 7 about here Over 60 percent of the sample indicated that a committee had developed the selection criteria for microcomputers. Selection decisions by Deans (17 percent), primary use department (10 percent), faculty member (9 percent), and the computer center (7 percent) were the other indicated methods. The overwhelming emphasis on the committee may be reflective of the essential multidisciplinary approach used in most business colleges. Therefore, the results support the need for a multidisciplinary approach in the identification of criteria used in the selection of microcomputers. Microcomputer Usage The primary users of microcomputers within the schools of business are listed by frequency of use and mean score. Departmental use was measured using a five point rating scale with five representing heavy use and one representing light use (see Table 8). Insert Table 8 about here While Management Systems department had the highest mean use score (4.05), with Management Sciences department second (3.22), the largest number of schools responding (58) chose Accounting department with a mean score of 3.55 followed by Finance department with the second largest number of schools reporting (55). Over 55 percent of the schools indicated that Economics department, Marketing department, and Management department were also using microcomputer systems. Industrial Relations department with fewer than 50 percent of the schools responding had the lowest usage rating (2.0). Given the availability of software and the quantitative nature of the

12 disciplines, it is not surprising that Accounting and Finance departments seem to be the most broadly represented areas. For the same reasons it is not surprising that Management Systems department and Management Science department are rated highest in usage. Number and Type of Microcomputers Table 9 deals with various brands of microcomputers now used and/or expected to be purchased by the surveyed business schools. The table also shows the number and type of terminals in use and to be bought. Insert Table 9 about here Over 54 percent of the microcomputers in use were IBM's. Nearly 89 percent of those were IBM PC's. Apple computers were a distant second (10 percent) followed by Digital, Zenith, Tandy and Hewlett Packard. Compaq is in use by three schools but with seven terminals. The remaining microcomputers were in use by two or less schools. The "planned-to-be-purchased" category is also dominated by IBM. Of the 490 planned for units, IBM accounted for 91.2 percent. The next largest group was Zenith 150s with 4 percent. This last question, however, was left unanswered by many respondents and the results must be interpreted in the context of IBM's dominance of the microcomputer field reflected in the recent explosion of IBM compatible micro systems and supporting peripherals (Business Week, 1985). It is clear that IBM is the predominant choice of business schools. This corresponds to the results of the survey by Frand and McLean in 1985, who found that 85 percent of the schools surveyed had the same type of IBM-PC. Moreover, IBM's dominance, likely to continue, as IBM is viewed as

13 the favored manufacturer by those who do not have micros but plan to purchase them. Software Usage Table 10 lists the software currently in use or planned for acquisition by business schools. The most popular statistical software package is Insert Table 10 about here Visicalc, used by over 20 percent of the respondents. With respect to possible future use, Minitab was considered most frequently. Wordstar was the most commonly used word processing program, in use by 43 percent of the respondents. Among those considering a word processing package for the future, Volkswriter was the top choice. In the area of database management, Database II, was most popular (43 percent) with Database III considered the most for future use. For integrated activities, Lotus 1-2-3 topped the list for both currently and planned use (70 percent and 7 percent respectively). The rapid change occurring in the software market tends to limit the I conclusion that can be drawn from these data. Conclusions In selecting microcomputer systems, colleges of business must meet the needs of a number of different types of users, including students, faculty, researchers and administrators. This survey revealed that most schools of business place the greatest emphasis on the needs of students. Planners are faced with matching the ability of students upon entering the school and devleoping skills to be used upon graduation. While it would be helpful to match microcomputer systems to the skills of incoming students, it is more

14 important to teach skills that match the needs of future employees in the business community. Surveys, including this one, have shown that IBM computers dominate both in academic institutions and businesses, but it should also be noted that skills developed on one type of computer are usually generalizable to others. The heavy use of IBM systems probably indicates that IBM provides a good level of satisfaction to their customers, particularly when one considers that most plans for future acquisition specified IBM. The results of this study of selection and usage of microcomputers in business schools reveals certain characteristics which suggest some broad preliminary guidelines for planners to follow when choosing computer systems and software: 1) Consider the needs of the primary users. The principal groups considered when developing selection criteria in this survey were students, along with faculty and researchers. 2) A committee representing the interests of all users, rather than a single individual or interest group should develop selection procedures and collect information. Most of the schools surveyed used such committees. 3) Multiple contacts to vendors should be made. Even if it is assumed that an IBM system will be purchased, for example, multiple contacts permit comparison of prices, support services, available software, and changes in technology. This is becoming more important with the huge increase in the number of IBM look-a-likes on the market. 4) Allow plenty of time for the search and decision-making process. The majority of schools surveyed spent from three to six months.

15 5) Consider use patterns. The heaviest use of computers for teaching purposes as revealed in this survey occurred in the quantitative disciplines — Accounting, Finance, Management systems and Management Sciences. Virtually all colleges of business are now using microcomputers for teaching many courses, for conducting research, for administrative purposes, and for word processing. This survey illustrates how these institutions have gone about selecting their systems and shows the type of hardware and software most likely to be considered. In addition, the survey shows that nearly all academic departments use microcomputers to some degree, with the heaviest use among the quantitative disciplines. Further research is needed to determine satisfaction with present systems and how systems are adapted to incorporate new technological devAeopments and advances in hardware and software.

16 TABLE 1 Rank of Personnel Most Considered in the Decision of Purchasing the Micro Personnel Considered Frequency Percent 1. 2. 3. 4. Business Students Faculty Researchers Administrators 46 7 3 1 57 _I _~ _ _ _ 80.70 12.28 5.26 1.76 100.00

17 TABLE 2 Different Types of Procedures Used in Collecting Information in the Search of Computers Type N Percent Request for Information 13 23.2 Request for Quote 11 19.6 Request for Proposal 9 16.1 Request for Information and Request for Quote 6 10.7 Request for Information and Request for Proposal 4 7.2 State Contract 2 3.6 None of the above were used 11 19.6 Total 56 100.0

18 TABLE 3 Number of Computer Firms Contacted Before Purchasing the Micro No. of Firms No. of Contacted Respondents Percent One firm Two firms 3-4 5-6otal Total 9 8 21 20 15.52 13.79 36.21 34.48 58 _ _ _ __- ~ I 100.00

19 TABLE 4 Time Spent on the Decision Making Process for Micro Systems Time N Percent Less than 1 month 1 - 3 months 3 - 6 months More than 6 months Total 4 21 14 21 6.67 35.00 23.33 35.00 60 _ _ _ __11 111 _ _ _ _ _~~ r 100.00 _~r l _ 1 _ _ _ _ __~I~ _ _ _ _ I

20 TABLE 5 Number of Systems Available at Business Schools IBM vs. Non-IBM Distribution IBM Systems Non-IBM Systems Total Number of Systems No. % No. % No. % 1. One System 2. Two Systems 3. Three Systems or more 16 2 25.8 3.2 14 22.6 30 2 48.4 3.2 30 48.4 30 48.4 Total 48 77.4 14 22.6 62 100.0

21 TABLE 6 Summary of Criteria Used and Ranked According to Their Mean Score of Importance (N=62) Rank Criteria No. of Mentioned Mean Score 1. End Users (faculty, students, staff) 57 4.61 2. Type of Software Available 60 4.51 3. Reputation of Manufacturers 50 4.00 4. Vendor Support 43 3.86 5. Memory Capacity 40 3.72 6. Grants or Discounts 47 3.72 7. Reputation of Vendor 37 3.67 8. Availability to link with Mainframe 45 3.60 9. Quality of Maintenance 42 3.59 10. Upgrading Capability 42 3.59 11. Processing Power 40 3.57 12. Price 49 3.51 13. User Friendliness 38 3.50 14. Multi-user Capability 31 3.09 15. Convenience of Physical Features (ergonomics) 27 2.81 16. Previous Experience 30 2.50

22 TABLE 7 People Responsible for the Selection Criteria Used in Choosing Microcomputers (N=58) Frequency Percent 1. Committee 2. Dean 3. Primary Use Department 4. Faculty Member 5. Business School Computer Center 35 60.34 10 17.24 6 10.34 5 8.62 2 3.45

23 TABLE 8 Department Using Microcomputers the Most (N=62) Rank Department No. of Mention Mean Score 1. Management Systems 38 4.05 2. Management Sciences 50 3.72 3. Accounting 58 3.55 4. Finance 55 3.07 5. Economics 39 2.56 6. Marketing 48 2.50 7. Management 45 2.38 8. Industrial Relations 21 2.00

24 TABLE 9 Number and Type of Microcomputers Currently Using Planned To Be Purchased Number of Number of % of Number of Number of % of Type of Micro Respondents Terminals Total Respondents Terminals Total IBM PC 42 1721 47.6 9 299 60.8 IBM XT 20 155 4.3 5 41 8.3 IBM RT 10 85 2.4 10 107 21.8 IBM Portable 1 2 * 1 1 * Macintosh 9 77 2.1 1 1 * Apple II+ 8 74 2.0 - -- Apple IIe 8 119 3.3 - -- Apple III 2 90 2.5 - - Digital Rainbow 6 203 5.6 -- Digital Pro 3 36 t 1 8 * Lisa 2 7 * 1 1 * Tandy TRS-80 5 52 1.4 - - HP 150 4 42 1.2 -- - HP Portable -- — 1 1 * Zenith 100 4 147 4.0 -- - - Zenith 150 2 23 * 1 20 4.1 Compaq 3 7 * 1 1 Others 24 705 19.5 1 10 2.0 Total 3545 100.0 490 * less than 1 percent

25 TABLE 10 Software in Use and Planning to Use (N=54) Software In Use Planning to Use No. of Mention Percent No. of Mention Percent Statistical Packages Visicalc 11 20.4 -- 0.0 Supercalc 5 9.3 1 1.9 Microstat 5 9.3 -- 0.0 Minitab -- 0.0 3 5.6 SPSS/PC -- 0.0 2 3.7 Word Processing Wordstar 23 42.6 1 1.9 Wordperfect 6 11.1 -- 0.0 Volkswriter 3 5.6 2 3.7 Multimate 2 3.7 -- 0.0 PC Write 2 3.7 -- 0.0 Database Database II 23 42.6 2 3.7 Database III 6 11.1 5 9.3 Multipurpose Lotus 1-2-3 38 70.4 4 7.4 Symphony 6 11.1 3 5.6 Multiplan 8 14.8 - 0.0 Others IFPS 4 7.4 2 3.7 Framework 3 5.6 - 0.0 Linds 2 3.7 -- 0.0 Evergraphics 2 3.7 -- 0.0 Knowledge -- 0.0 2 3.7

26 References 1. Business Week, June 10, 1985. 2. Business Week, September 1984. 3. Carper, Karen, "No Software OH the Rack Please", Nation's Business, Vol. 73, No. 3, March 1985, pp. 36-38. 4. Coppage, Sam, "The Short Course Free Market: A Strategy for the Avoidance of Microcomputer Software Instruction in the Business Curriculum", Proceedings of Computers and Business Schools: Progress on Integration, Series No. 3, 1985, pp. 33-37. 5. Francis, I. and Heilberger, R. M., "The Evolution of Statistical Program Packages the Beginning", Proceedings of Computer Science and Statistics: 8th Annual Symposium on the Interface, ed. J. W. France: UCLA, 1975, pp. 106-109. 6. Frand, Jason L. and McLean, Ephraim R., "Survey of Business School Computer Usage", Second Annual UCLA, Graduate School of Management, University of California, Los Angeles, September 1985, pp. 7. 7. Kaplan, S. D., "We're Managing Better with Computer Modeling", Office Administration and Automation, June 1983, pp. 27-29. 8. Karasik, M. S., "Selecting a Small Business Computer", HBR, January/February 1984, pp. 26-30. 9. Keen, P. G. W. and Woodman, L. A., "What to do with all those Micros", HBR, September-October 1984, pp. 142-150. 10. Levitan, Laurence, "Getting the Most Out of Application Software Packages", Info Systems, 4, 1981, pp. 68-72. 11. Lovejoy's Guide to Business Schools, 1983. 12. Mahmoud, Essam, "An Evolution of Selected Computer Packages for Forecasting", Paper presented at the Third International Symposium on Forecasting, Philadelphia, July 1983. 13. Mahmoud, E. and Malhotra, N., "The Decision Making Process of Small Business for Microcomputers and Software Selection and Usage", Forthcoming, INFOR, 1986. 14. Miller, F. W., "Versatility in Software Important to PC Selection", Info Systems, 1985, pp. 3, 100. 15. Muller, Mervin E., "Aspects of Statistical Computing: What Packages for the 1980's Ought To Do", The American Statistician, Vol. 34, No. 3, 1980.

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