Turner, Peter B. B.

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Management Adviser Volume 11 Number 4 Article 4 7-1974 Systems Approach to Planning and Adjusting to Computer Capacity Peter B. B. Turner Follow this and additional works at: https://egrove.olemiss.edu/mgmtadviser  Part of the Accounting Commons, Business Administration, Management, and Operations Commons, and the Management Sciences and Quantitative Methods Commons Recommended Citation Turner, Peter B. B. (1974) "Systems Approach to Planning and Adjusting to Computer Capacity," Management Adviser: Vol. 11: No. 4, Article 4. Available at: https://egrove.olemiss.edu/mgmtadviser/vol11/iss4/4 This Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion in Management Adviser by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu. If your computer is overloaded it’s not necessarily an automatic signal to rush out and buy new, larger equipment. It may be possible with modern machines to increase capacity by adjusting configuration or im­proving peripheral units—A SYSTEMS APPROACH TO PLANNING AND ADJUSTING COMPUTER CAPACITYby Peter B. B. TurneyNorthwestern UniversityThe importance of defining computer capacity cannot be disputed. The installation of a new computer system generally requires a large investment of corporate re­sources. An error in the definition of the capacity the system can han­dle will be serious. The acquisition of a system that is too small to ful­fill all the demands on it may ne­cessitate a substantial upheaval and further investment. A system that is too large will provide a commit­ment to a cost level substantially higher than would otherwise be necessary.Planning for computer capacity has traditionally emphasized the role of the computer hardware in determining the output of the en­tire system. This article demon­strates that planning for computer capacity may be substantially im­proved when other important ca­pacity variables in the system are considered. Where computer sys­tems have been installed and are found to be straining capacity, it is possible to upgrade the system in less costly and less time-consum­ing ways than by moving to a larger computer. Computer capac­ity should be considered to be much more responsive to short-run management control than is gen­erally thought.In other words, if your computer is overloaded, that isn’t necessarily a signal to rush out and buy new equipment. There are many other approaches that can be used first.The traditional view of capacity limits the analysis to hardware con­siderations alone. More precisely, it is frequently defined in terms of one particular computer model. It is becoming impossible, however, to define the capacity of a modern computer because of its modular design.Buying a computer system is a little like buying a car. Certain items are standard equipment, other items, such as a “floating point package,” are optional extras. If a second processor is found neces­sary, or if core storage needs to be expanded, this may still be done at a later date.Many companies include ex­pandability and open endedness as selection criteria. Expandability re­fers to the ability to increase stor-32 Management AdviserThe volume of work that can be handled will depend on the number of operators . . .age and processing speed without a major disruption such as rewrit­ing many programs. An open- ended system is one where addi­tional equipment may be added without major disruption.“It may also become desirable to make additions to, or improve­ments in, the peripheral equip­ment. More communication lines may be added, or the file capacity may be enlarged. It may be neces­sary to improve the speed of access to part of the files, perhaps by adding drums.”1In addition, most computer manu­facturers sell or rent compatible families of computers. The move to a new computer does not imply a constant increment to cost or capacity. A smaller computer may be added to enlarge the current system or a new, larger one ex­changed for the older, smaller one.The significance of all this is the ability to adjust capacity merely by making an adjustment to the exist­ing system to remove bottlenecks. A change in the configuration can eliminate bottlenecks and expand the capacity of the system as a whole. Hardware monitors are available to evaluate the system and determine the location of these bottlenecks.2 When the system is designed, the capacity of each fa­cility is enough to accept the total demand expected. The total de­mand may be higher simply be­cause the demand has increased or because the mix and use of re­sources has changed. Modularity provides flexibility to meet both types of change to the extent al­lowed by the design of the com­puter.1—Martin, James, Design of Real-Time Computer Systems, Englewood Cliffs, N.J., Prentice-Hall, 1967, p. 256.2—Warner, C. D., “Monitoring: A Key to Cost Efficiency,” Datamation, January, 1971, pp. 40-49.The performance of the hard­ware is heavily dependent on the quality of the programs used in the operation of the system. The kind of programing languages, the effi­ciency of the library routines, util­ity programs, application programs, and the operating system all deter­mine the revealed performance of the hardware. Changes in these software items will clearly be a source for improving hardware per­formance. Coyle gives an interest­ing example of the possible im­provements available to users of one kind of software, the Indexed Sequential Access Method (ISAM) for file processing. He improved the processing of new records, for example, by applying the input transactions in descending order and creating the data set with “dummy” records.“We enjoyed a 400% improve­ment without buying new software and I only hope that the time we have spent and the techniques we have used can be of help to others fighting the ISAM problem.”3Extra operator can be addedComputer equipment is highly automated but it is not independ­ent of human interference; operat­ors must be assigned to run the equipment and help smooth the flow of work. The volume of work that can be handled will depend to some extent on the number of operators working with the com­puter. There may be a reduction in system delays and rerun times, for example, if an extra operator is added.4 There is, of course, a limit to the number of operators who can run one piece of equipment. After a certain point there are dimin-3—Coyle, F. T., “The Hidden Speed of ISAM,” Datamation, July 15, 1971, p. 48.4—Ruth, S. R., “The Love and Care of Antique Systems,” Datamation, July 15, 1971, p. 43.ishing returns as new operators are added. Emery argues that changes (such as adding extra operators) have little effect on either total cost or capacity.5 A recent study on management information systems (MIS) cost behavior showed that in the operations area alone, per­sonnel expenditures are little less than total hardware expenditures.6 The Diebold Research Group noted that 31 per cent of operations per­sonnel expenditures are accounted for by operators.7 It must be con­cluded that capacity may be af­fected by changes in manning and these changes are likely to affect total cost in a significant manner The pattern of computer operator expenditures in the long run is graphed in Exhibit 1, page 34. The actual pattern of expenditures will be somewhat smoother since overtime may be utilized to in­crease the volume of work that any one operator can handle.Systems improvement can helpEquipment capacity cannot be defined in a vacuum (even with a given number of operators). Ca­pacity or throughput capacity is a function of the interaction of all aspects of the system. To increase capacity, for example, the quality of the operators may be improved through training so that they can5—Emery, James C., “Cost/Benefit Anal­ysis of Information Systems,” SMIS Workshop Report No. 1, 1971, p. 11.6—A study was conducted in a large manufacturer of consumer goods. The results of the study may be found in: Peter B. B. Tumey, “An Accounting Study of Cost Behavior and Transfer Pricing of Management Information Sys­tems,” unpublished Ph.D. dissertation, University of Minnesota, 1972.7—Diebold Research Program, “Manage­ment Costs and Control Studies: Guide­lines to the Composition of the ADP Budget,” Management Implications, M- 21, Diebold Group, Inc., February, 1971, p. 14.July-August, 1974 33EXHIBIT INumber BEHAVIOR OF OPERATOR EXPENDITURES (LONG-RUN)oftake better advantage of the sys­tem. The balance between input and output may be adjusted, even a certain amount of reprograming may be done. Ruth suggests that a 10 to 25 per cent improvement factor in available computer time is possible in many computer cen­ters utilizing such system modi­fications.“By taking the worst of all these cases which I’ve looked at in gov­ernment and industry there is per­haps 25 per cent more computer time available simply by using bet­ter, faster, more efficient proce-PETER B. B. TURNEY is assistant professor of ac­counting and informa­tion systems at North­western University. Pre­viously he taught at the University of Maine at Orono. Dr. Turney was a recipient of a Haskins dures in the computer room. Even if it’s only 10%, it’s very easy to find. And 10% of a million dollars is still worth the trouble.”8Capacity must always be defined in terms of equivalent service levels for some given time period. Every user entertains an expectation re­garding turnaround time. When a computer is new and few jobs have yet to be converted or programed for it, turnaround time is likely to be as good, if not better, than ex­pected. At a later stage when ca­pacity limits are being reached, turnaround time will become longer. Capacity is thus not a rigid limit; it is as flexible as turnaround times and service levels permit it to be.The capacity adjustment decisionThe capacity increase decision is generally viewed as a long-run de­cision. From the beginning of a feasibility study for a new system8—Ruth, S. R., op. cit., p. 43. to conversion is likely to take at least 20 months.9 Once the system has been designed, the equipment configuration set, and the order placed, it may still take six to 12 months before delivery of the equipment can be made. This is only true, however, if capacity is being increased through the acqui­sition of an entirely new system. If a very large increase in system capacity is required, then it is likely that a company will have to con­vert to a new and larger system. If the required increment is more moderate, then it may be affected through manipulation of any one of the variables mentioned above. The configuration of the system may be adjusted, core storage may be increased, the operating system may be made more efficient, or an additional operator may be added. None of these changes requires the long-lead time necessary for the installation of a new computer. To9—Davis, Gordon B., Computer Data Processing, New York, McGraw-Hill, 1969, p. 484.34 Management Adviser& Sells fellowship forteaching in accounting and a National As­sociation of Accountants grant-in-aid for doctoral research. He received his B.A. from Bristol University in England and his M.S. and Ph.D. from the University of Minnesota.EXHIBIT 2COMPUTER CAPACITYchange the capacity of a computer system by ten or even 20 per cent will generally be possible with rea­sonable alacrity and cost. To change the system by 50 per cent will require a much more funda­mental revision and upgrading.The ability to provide improve­ments in the short and medium terms should ease long-run plan­ning for computer capacity. It should also provide a new capabil­ity for solving systems design er­rors, adjusting for incorrect fore­casts of system demands and un­foreseen overloads in the system’s work schedule. Exhibit 2, above, compares the traditional approach to increasing and adjusting com­puter capacity with the more flex­ible systems approach that is pro­posed here. The emphasis on up­grading to larger-computer systems under the traditional approach limits management’s flexibility in the short run and requires capacity changes to be in large and costly increments. Where management considers other system variables that also affect capacity, such as variable operator manning and modularity in computer design, it is possible to reduce the lead time necessary to make capacity adjust­ments. It further reduces the size and cost of required increments to capacity by smoothing the path of capacity increase.One of the problems that affects the capacity adjustment decision is the difficulty in forecasting the de­mand for computer services. If computer capacity were totally in­elastic in the short and medium run, an error in forecasting the de­mands would be critical. It is pos­sible, however, by consideration of computer capacity variables, to ad­just and compensate for at least a moderate error. Errors in forecast­ing demand that are more serious suggest that the planning process for computer capacity is inade­quate. Long-run demand for com­puter services in most companies is managed demand. The demands that are met are those for which the system has been planned or is capable of handling. Demand for computer services cannot be trans­lated into actual output without some delay; in many cases the lead time in designing a new applica­tion is as severe as that for acquir­ing a new system. If long-run de­mand can be limited to the increase in long-run capacity, the errors in forecasting demand in the short and medium runs may be smoothed out through the numerous tech­niques outlined above.ConclusionComputer capacity cannot be de­fined in terms of hardware alone. An expanded definition of capacity to include all the factors that inter­act to create the output capability of the system is a more correct—if more ambiguous— definition of ca­pacity. Further, it implies changes in policy and strategy for the com­puter management in relation to capacity adjustment. In the short and medium terms, it is possible to adjust or upgrade the system to handle significantly higher de­mands without requiring the acqui­sition of a new system.July-August, 1974 35

Systems Approach to Planning and Adjusting to Computer Capacity

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Systems Approach to Planning and Adjusting to Computer Capacity

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