MANAGEMENT SUMMARY - Contents of Volume 2 datopro

The purpose of optical reading is the same as that of any other type of computer input technique: to translate data from the form in which it is created to a form that can be processed by a computer. A data processing cycle gen-erally begins with data created by humans, and the form most suitable for use by humans is the printed or written word. But the form of data most suitable for computer processing is some type of digital encoding. How to cross this gap? By machine, of course. And the optical reader, in all its many forms, is the most promising type of machine yet devised to bridge this gap.

This report explores the world of optical readers - a world that is just as puzzling as it is promising. You'll find explanations and analyses of the different types of optical readers, their applications, their current status, and their prospects for the future. What's more, you'll fmd com-prehensive equipment comparison charts, results of a sur-vey of users' experience, and down-to-earth guidelines to help you decide whether optical input techniques have progressed to the point where you can profitably employ them.

Replacing the Punched Card

Although the punched card is still the most widely used medium for computer data entry; its use Lmposes serious limitations on many installations. There are three prin-cipal complaints against the punched card:

• Data preparation time is high.

This comprehensive report presents the char-acteristics of 104 current optical character, mark, and bar code readers from 46 manu-facturers. You'll also find an analysis of the experience of 116 optical reader users, plus straightforward advice to aid you in assessing the pros and cons of optical input techniques, planning your installation, and selecting a suit-able reader.

• Input time is high, even with the fastest card readers.

• Cards are expensive because they are not reusable, and storage space is also a major expense.

Several techniques have been advanced to overcome these deficiencies. Those in use today and touted for the future include:

• Key-to-tape recorders, both single-station models and multi-station key/disk models.

• On-line data entry.

• Source data automation.

• Optical readers.

Key-to-tape recorders are direct replacements for key punches. Instead of punching cards, they record data directly on magnetic tape, which is inherently a much faster input medium for computers than punched cards

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The Recognition Equipment Total Data Entry System com-bines an REI Input 80 optical reader with a modified Entrex 480 key/disk data entry sys-tem to produce what has come to be called a mixed-media system. The CR T data entry stations can be used indepen-dently to key batches of data or can be used in the "unread-able character" correction cycle for the scanner. REI joins Scan-Data and Cummins-Allison in marketing mixed-media systems, and other companies are planning to bring similar products to the market in 1974.

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All About Optical Readers l>- because of the greatly increased storage density.

More-over, modern shared-processor key-to-disk/tape systems offer data editing and validation capabilities far beyond those of keypunches. (Report 70D-OIO-70 contains a detailed discussion of these devices and systems).

On-line data entry makes use of remote or local terminals for direct entry of data into a computer system. Typical terminals include teletypewriters and CRT units.

Source data automation (SDA) is a broad term referring to capturing data in machine-readable form when it happens, rather than recording it and later transcribing it to machine-readable form. For example, a cash register can be equipped to produce a punched tape of trans-actions to be read directly into sales and inventory application programs. Alternatively, the cash register tape could be printed and then read by an optical character reader. Many specialized devices have been developed to expedite the development of this concept, but a lot more work needs to be done in business procedures and systems design before the era of source data automation overtakes us.

This brings us to the subject of this report-optical readers. Very simply, an optical reader is a device that employs an optical technique in the process of trans-lating marks or characters on a document into the electrical signals that a computer requires. The use of optics is not new; punched cards and punched tape have been read by means of photoelectric cells for many years. The types of optical readers range from the simplest mark readers to complex multi-font character readers, with several way points in between.

The Optical Reader Industry

The optical reader industry is a puzzling one. It has made court jesters out of several prophets. For several years, it has been "on the verge of taking off," but performance has consistently fallen below predictions.

Even so, there have been few departures from the ranks of companies building optical readers, and a number of new ones have entered the arena. Also, there has been little change in the pecking order of the established companies. In each of the three distinct classes of optical readers (mark readers, bar-code readers, and character readers), the leaders remain unchanged. IBM continues to lead the way in optical character readers, with Control Data a close second. In the field of bar-code readers, Addressograph-Multigraph still holds sway. And Optical Scanning continues to read more marks than anyone except IBM.

The true size of the market for optical readers is virtually impossible to derive. The estimates that have appeared in the trade press and research studies deal primarily with

optical character readers and generally place the value of such equipment presently installed at about $400 to $500 million-a tiny portion of total EDP expenditures. Scan-ning the literature places the number of character readers currently installed at about 1500 to 2500, with current production amounting to about 400 readers a year. The other types of optical readers number substantially more5

but have a lower installed value because of the great dif-ference in average price per unit between character readers and mark or bar-code readers.

The depressed economic climate has unquestionably hurt the optical reader industry, tending to cause EDP instal-lations to try to get by with the equipment on hand rather than make additional procurements. Higher operating costs sometimes m:Ist be tolerated if the alternative is making large capital expenditures. This situation is clouded, however, by the recognized tendency of EDP installations to rent or lease rather than buy, a policy nurtured by IBM.

In addition to the trauma associated with equipment coversion, use of optical readers often means substantial changes in procedures, which can lead to high implemen-tation and training costs. Whether or not these are the only relevant factors can be argued; however, the fact remains that progress in the use of optical readers has not kept pace with equipment development or with the pace of other facets of EDP such as minicomputers and key/

disk/tape recorders.

Hindrances to Acceptance

Unfortunately, the acceptance of optical scanning has been hindered by many obstacles. Against the many prob-lems, only one major benefit can be cited in favor of the optical readers, and it is so obvious as to sound trite. This advantage, of course, is that these remarkable devices are automatic: they convert readable and human-prepared data into computer-readable codes auto-matically.

Before one can fully understand why the many disadvan-tages of present-day scanning have only slowed the pro-gress of optical scanning but have not defeated it alto-gether, an elementary principle of economics must be grasped as the basic touchstone by which to gauge the worth of a prospective installation. That test is: how many people does the device replace, and how much money does it save by doing so? Obviously, if the device costs more to install, operate, and service than the equip-ment and personnel it supplants, it is a poor bargain. If it produces a net gain in its intended environment, then it is a good value at any price. In other words, the paradox of a million dollar machine (and there is at least one) being cheap and a fifty thousand dollar machine being dear would occur if the criterion were satisfied in the first case

and unsatisfied in the second. I:::

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All About Optical Readers

The IBM 3886, announced in October 1972, employs light emit-ting diodes (LED) as the light source for scanning. It can accom-modate the alphanumeric OCR A and European OCR B fonts as well as preprinted block printing and hand-printed numerics. It is considerably slower than the older IBM 1287 but is also signifi-cantly less expensive. The 3886 continues IBM's recent trend toward using "intelligent" controllers to relieve the main processor of some of the housekeeping work involved with managing the transfer of data between the processor and peripherals.

I> What does it take to demonstrate the proposition? That is a far more complex matter, because the number of factors to be weighed in arriving at a determination are manifold.

But if you convince someone that your million dollar machine will save him money, you will generally make a sale. An actual example is the Information International GraflX I, which will be used by the U.S. Navy at a cost of

$4 million to convert over 3 million pages of technical manuals into an updated microfilm data base. The Grafix I is also being tested by the Department of Health and Social Services of the United Kingdom. In contrast, if a fifty thousand dollar scanner is too slow to replace at least five keystation operators, it is unlikely that it can be cost-justified.

Even today, there is a much stronger trend toward the use of key-to-tape/disk devices and systems than optical read-ers. Indeed, so many of the new data entry installations are highly refined shared-processor key-to-disk systems that several optical reader manufacturers have seen fit to marry their teclulOlogy to that of their doughty competi-tor. (If you can't beat them, join them.) The resulting

"mixed-media" data entry systems will be discussed later in this report. For the moment, let it be noted that computer users are encountering steadily rising costs for both remote data input (the province of optical mark and bar code readers) and large-volume data input at central sites (the province of optical character readers). As a result, optical readers are slowly but steadily gaining acceptance as a feasible means of reducing such costs.

As noted before, the makeup of the companies forming the optical reader industry has been surprisingly stable in view of the lack of impressive results. Several new com-panies have surfaced, as can be seen in the comparison charts, but there have been no major upheavals within the industry for several years now.

With this understanding, the following hindrances to the acceptance of optical scanning should be considered.

High cost. Sometimes direct equipment charges are more than an interested potential user can afford, and he is eliminated as a customer. More often, he would manage to unearth the needed financial support if only the scanner installation would lower his operating costs sufficiently.

But the aggregate costs of a proposed scanner system may be too high to overcome. Bear in mind that there are indirect or hidden costs, too, such as comprehensive redesign of forms, adjustment of input preparation pro-cedures, personnel retraining, and sometimes revamping of the data processing system itself. The cost of. system downtime is almost impossible to estimate with any assurance, but the consideration is important nonetheless.

Technical inadequacy. Perhaps the most serious short-coming of optical scanning today remains its difficulties with handprinting, despite the substantial progress of the last two years. Handprinting is being read now (at least numerals and some special symbols), but with an appreciable rejection rate and some subtitutions (errors).

Rejections require human intervention, and a high rejec-tion rate can essentially neutralize the automarejec-tion bene-fits of the scanner. Concerning substitution errors, unless various check routines are introduced, they may not be discovered until late in the data processing cycle, and correction then is usually costly. In brief, the industry still needs new technology to lower the rejection rates and obviate the correction procedures that interrupt scanning to the detriment of throughput. As throughput is reduced, the payoff in using automatic scanning diminishes. This squeeze against payoff has been reining the growth of optical scanning all along, and it is doing so today. The various directions that the industry is taking at present to counteract this situation will be discussed shortly.

Alternative data entry methods. The marvel of reading characters rapidly with a machine has no weight in a profit and loss statement. Key-to-disk systems, especially, are currently more cost-effective in most data entry I>

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All About Optical Readers

!:> environments than optical scanning and have therefore begun to dominate the scene. This ascendancy is hardly surprising in view of the facilities offered by the shared processors and supporting software of such systems. The attractiveness of this combination has not been lost upon optical scanner manufacturers, as shall be discussed. But what about the oft-maligned, primitive keypunch? Could this ridiculously simple contrivance be a serious competi-tor of optical scanning? Yes, it is. Should it be? This is a much more difficult question. For applications involving substantial data volumes, the keypunch deserves far less consideration than many EDP managers give it. The con-test there should be between optical scanning and key-to-disk or on-line data entry systems. Nevertheless, there are many medium- and low-volume applications for which upgraded electronic keypunches are still quite appropri-ate, and optical scanner manufacturers cannot seriously compete in these areas.

In fact, any data entry device is a competitor of optical scanning. At some far-off future day, it is likely that optical scanning technology will be triumphant over all alternatives requiring human assistance. Today, however, it is still at an early stage of market penetration.

User fears. How does one convince a fearful manager that his data entry function would benefit from optical scan-ning? When sweeping changes in procedures are demanded and the associated problems are numerous and unpredic-table, persuasion does not come easily. News of occasional fiascos, even though far less frequent than in earlier times, strain the manager's courage further. His fears, which have been a major deterrent from the start, are far from groundless. But the number of successful installations is climbing steadily, too. Now the manager should be just as fearful of missing out on something good.

High cost of marketing and field support. The cost of sales calls, demonstrations, customer personnel training, forms design support, and field engineering support have been a great burden to the independents, though less of a prob-lem to giants such as IBM and Control Data. Now the independents are better capitablized and better organized, and this anchor on progress is waning.

Overspecialized equipment. Until recently, many of the manufacturers themselves lacked the experience and insight necessary to the understanding of their own market. Optical readers in the past were often designed for special applications that lacked any broad market base. With the passage of years, machines that cut across the price spectrum with a wide composite of capabilities have gradually evolved. Thus, the industry appears to be outgrowing this problem, too.

Neglect of the forms design problem. Until recently, most manufacturers fobbed off the critical task of forms design as the user's problem rather than their own. Some

manu-facturers still give little more than perfunctory attention to it. Many more, fortunately, now recognize that must of the throughput gained by their machines can be lost elsewhere by humans because of ineptly stuctured forms.

Enough perfectly good machines have been expelled from users' premises as a result of forms design shortcomings to make them see the light.

Current Marketing and Design Trends

Efforts to expand the acceptance of optical scanning have taken some interesting and surprising turns during the past year. Probably the outstanding development is the move-ment toward a mixed-media system approach in which one or more optical scanning devices are combined or integrated with a multiple-station key-to-disk data entry system. The concept was introduced in 1972, and actual deliveries of three important systems began in 1973. In the order of first deliveries, these products are the Cummins-Allison 4400 KeyScan System (Report 70D-274-01), the Recognition Equipment Total Data Entry System (Report 700-718-01), and the Scan-Data 2250 Mixed Media Systems (Report 700-738-01).

Concerning scanning devices, there is a discernible trend toward photodiode arrays and matrices, and away from electron-beam techniques. Laser beam scanning appears here and there. Which technique is best? Only one thing is really clear. Although proponents of matrix analysis through diode cross-sectioning of a character field claim superiority, users of other methods concede nothing. And their products suffer from no obvious disadvantage attributable to the scanning techniques they employ.

We offer the following observation. The inherent objective of optical scanning is resolution. What happens to the information that the scannin!! Yields? It must be nrocessed by recognition logic, in h;rdware and/or software. As more resolution detail is furnished to this logic, more hardware elements must be added or more memory must be provided. Furthermore, there is the restriction of allowable processing time, which limits the degree of complexity that is practical. In relation to present tech-nology, especially with regard to memory cycle time, recognition techniques have probably attained a near-optimum state. Certainly there has been no giant step in this regard during the past year - not even a move to capitalize on the emerging semiconductor memory tech-nology as a basis for refining recognition software.

Instead, there is a move to marry scanning to key entry systems, which is really a tacit admission that scanning cannot altogether displace human operators at keyboards for some time. For the present, it appears that even if more resolution and more memory were both available, they could not be effectively exploited.

The impact of LSI semiconductor memory, however, is being felt elsewhere. "Intelligence" is being added to mark!

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All About Optical Readers I::> and bar-code readers to give these devices an automatic

sorting ability. An even greater effect will probably be achieved in the medium-price class of optical character

Im Dokument Contents of Volume 2 datopro (Seite 155-162)