From punch card devouring monsters to the first computers – 60 years of digital transformation, part 1

Chuck and Ken, father and son, both IT experts, take an fun look back at their own six decades in IT. They explore how digital transformation has changed, how it has stayed the same and what the modern generation can learn from the experiences of the past. The term “digital transformation” has exploded in popularity in recent years, so you might think it’s something new. In fact, digital transformation has been around as long as the first computer systems. 

What we found surprised us – and we want to share those surprises with you. Where we expected timeless truths, we saw big changes; where we expected big changes, we found timeless truths; and we were surprised to see where the pendulum is swinging back and forth. For scholars looking for a scholarly review, this article is not it. We have been privileged to have toiled and sweated side-by-side with very talented people on very challenging projects in a very important field that’s evolved over the decades. This article focuses on distilling down our own personal experiences to tell stories you might profit from. Because your own experiences may be different, as they say, your mileage will surely vary.

What is Digital Transformation?

This term has entered our common language, yet not everyone agrees on what it means. Worse, it’s been adopted as a marketing term adorning a myriad of slogans such as “Don’t wait to start your Digital Transformation – buy our router today!” or “Without a low-code development platform, your Digital Transformation is doomed to failure!” To make matters more confusing, it is not unusual to see the term “digitize” referring to a thing, and “digitalize” referring to a process or outcome. So, let’s take things carefully and define exactly what we mean.

To focus on Transformation, we define DT using a project motto one of us (Ken) developed during a recent digital transformation, distilling its essence down to just 6 words: We Change The Way We Work (WCTWWW). To earn the full title Digital Transformation, an IT project must not just digitize something, but it must be a disrupter that causes large scale changes to how people work.

Our take on the history of Digital Transformation

As we shared stories and asked each other questions, several buckets of time naturally emerged, each containing its own flavor of what Digital Transformation meant for that time. Therefore, in this article we’ve divided the last 60 years of digital transformation projects into the historical eras shown in Figure 1.

What surprised us most is when we stepped back to look at the big picture. We would have never predicted what we saw. There, stretched out across the eras and shining like a precious gem was nothing less than Golden Triangle itself, developed by Dr. Harald Leavitt in 1964: People / Process / Technology.

We all know waterfall is bad – and nobody has time to read a novel. Therefore, in what follows we’ll use good scaled agile practice. Our user stories are grouped into epics, and the epics will be published here in four increments – with a special “innovation” increment at the end, where we use our agile learnings to predict where we think the future is heading.

New technology comes in

They may have been beasts, but let’s keep in mind they were digital beasts. And the people that configured them, the earliest digital workforce. Companies digitized every transaction onto 80-column punch cards: orders, invoices, requisitions, inventory slips, etc. These thousands of cards were then kept organized by category: sales, receivables, payables, expenses, etc. For a big company this meant: “we need lots of storage space!”

Our story starts in the Dark Ages of Tabulation, from the 1950’s to the mid 1960’s. Here is where the monsters lived, the tabulating machines and their earlier cousins, the accounting machines. These were the first digital beasts, capable of devouring thousands of punched cards albeit not capable of doing much with them. These beasts were kept oiled and fed by armies of specialists, the forerunners of the computer professionals we know today: well-trained “digital experts” in electromechanical technology, to be sure, but wielding circuits and plugboards instead of IDEs to program these beasts with their simple digital tasks.

From the mid 1960’s to the 1970’s, the Dark Ages of Tabulation gave way to the Age of Iron; it’s where the older of us (Chuck) got his start. The field was called data processing, not information technology; at the time, this was a very appropriate distinction, since the industrial computer systems of that era could do simple operations on large amounts of data – but rendering that data into actionable information was still the job of humans, not machines. The name comes from a term sometimes used by salespeople in that era, “pushing iron,” emphasizing the sale of these large, heavy, electromechanical systems. The sale of solutions came later; in this era it was expected each company would buy the “iron” and develop their own solutions.

Enter the computer

Today there is no shortage of marketing hype along the lines “a company must transform digitally or die.” While reduced barriers to technology and increased market competition are significant to be sure, computers have been around a long time, and companies have long had very smart people. In many cases, the low-hanging fruits from a move to digital have long since been harvested, so that digital transformation projects are about digitizing new areas. IT enablement of automobiles (once known as telematics) may be the best example.

The Age of Iron was not about digitizing more things, or about putting digital capabilities into more hands. Rather, the first digital transformations were all about generating actionable information from the digital data already at hand.

Companies in the 1960’s had plenty of digital data – they just couldn’t put it together. Punch cards were how the data were stored, and tabulating machines were how they were processed. Picture huge rooms, filled with tens of thousands of punch-cards, dozens of machines – and sometimes dozens of people to operate and repair them. But here’s the problem: the machines were mono-functional, i.e., each category of data had to processed separately. Example: just knowing your inventory is useless; just knowing your orders is useless – you can only make business decisions when you combine the two. It’s a simple task, but an absolute showstopper for tabulation machine technology.

Enter the computer. Not limited to a single category, a computer could integrate multiple categories; it could compare sales against inventory, customers against credit, delivery dates against purchases, raw material purchases against production plans. So even though input was still slow in the 1960’s, the computer put the data together and made possible the first steps toward an information structure for a company. (Chuck Ritley)

Exit the people

Particularly in recent years for the newcomers organizing their first digital transformations, digital transformation projects are often seen in a positive light: more digital means more “cool.” This is not a view likely shared by the older colleagues, scarred from transformation-enabled layoffs and outsourced jobs. Today, technology replaces technology, or it can create whole new jobs. But since the earliest days of the Age of Iron, technology replaced labor. In short, the greater the extent of the first Digital Transformations, often the more people could be replaced. Everyone in this discipline would do well to remember that far from being cool and fun, it’s quite possible that digital transformation is one of the leading causes of pain and suffering in the workplace over the decades.

Sir Edmund Hillary climbed Mt. Everest because it was there. President Kennedy wanted a man on the moon to prove it could be done. Noble thoughts like that never reached Silicon Valley. One factor about computerization at any level never changes: money.  The first computer of 1960 and the last Digital Transformation of 2021 had the same goal – profits.

As a programmer in the 1960s I didn’t understand that. I was caught up in the technology.  Replacing a full-on “dumb” IBM 407 accounting machine with a “smart” Honeywell 200 at a steel mill was exciting to me. A small army of 10 keypunch operators digitized sales data by punching it into cards. The cards were sorted, collated, copied, stored in drawers, then pulled out, sorted again, run through the 407, re-punched, stored again until the next run. This was done for 4 different accounting systems and took 6 machine operators.

But with a new H-200 humming along, one operator could load in the cards, and the computer would do the rest. This meant six large pieces of expensive, difficult-to-maintain gear went back to IBM, the leases were all canceled – and six tab machine operators were gone with the wind.  So, profits were up, and I had learned a lesson: this was why everyone in a company looked fearful when I came in. “How many of us is he going to replace?” I began to wonder if I was “the Angel of Death.” (Chuck Ritley)


Miniseries on digital transformation

This article is the start of a 4-part mini-series on digital transformation. Part 2 will be published next week.


Acknowledgements

It is our pleasure to thank Maria Kreimer and Nikola Gaydarov for detailed discussions that contributed significantly to this manuscript.

AUTOR/AUTORIN: Kenneth Ritley

Kenneth Ritley is Professor of Computer Science at the Institute for Data Applications and Security (IDAS) at BFH Technik & Informatik. Born in the USA, Ken Ritley has already had an international career in IT. He had Senior Leadership Roles in several Swiss companies such as Swiss Post Solutions and Sulzer and built up offshore teams in India and nearshore teams in Bulgaria among others.

AUTOR/AUTORIN: Chuck Ritley

Chuck Ritley spent decades in the IT industry, first launching huge mainframe systems in the 1960s and then becoming editor of one of the world's first computer magazines in the 1970s. In the 1980s, he ran a successful start-up company that employed many dozens of people. Today he spends his time as an educator, teaching advanced computer science courses at colleges in the San Antonio, Texas area.

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