Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
LEO's Last Roar
Looking back on the LEO story from 50 years on, there is much to marvel at, starting with the mere fact that the contraption actually worked. Indeed, it succeeded so well that Lyons was soon taking in computing jobs on a service-bureau basis. (At one point, they were hired to calculate the distances between all 7,000 railway stations in Britain.) When this business also proved popular, Lyons set up a subsidiary to build and sell LEO computers, transforming the tea-and-pastry company into an electronics manufacturer. The first machine offered for sale, in 1956, was an updated version called the LEO II, followed in 1961 by a transistorized LEO III. Major customers included the British division of Ford Motor Co. and the British Post Office, which at one point had five LEOs churning out telephone bills.
Within Lyons, the biggest regular computing job was the weekly payroll. LEO took a second and a half for each employee, compared with eight minutes using manual methods.
Other early LEO computations offer a more revealing glimpse of how business computing was to evolve in the years to come. An example that seems well ahead of its time is the job referred to as Tea Shops Distribution. In a period when computing was almost always done as a batch process, this was a near-real-time operation. Before the computer came along, the 200 Lyons tea shops sent in nightly order forms for the next day's supplies. "In a very few hours," Caminer writes, "the orders from all the shops had to be collated so that requisitions could be forwarded to the bakeries and kitchens and other departments. Then the orders had to be valued and the goods assembled and loaded onto the waiting distribution vans."
It was easy to see how the computer could speed the mathematical parts of this process, but if all the information on the order forms had to be key-punched every night, data entry would swallow up all the savings of time and labor. The key to finding a solution involved recognizing that the order forms were highly repetitive. In the new system, each shop had a standing order for each day of the week; changes were received by telephone each afternoon and entered directly onto punch cards by the telephone operator. This scheme is a long way from the kind of networked supply-chain system that might be proposed today for the same function, but it was the closest approximation possible, given the technology available in the early 1950s.
The very first LEO applicationthe program that was run back in November 1951is also an interesting case study. The function of this program was "valuation" of the weekly bakery outputsumming up all the costs of labor and ingredients and then distributing appropriate shares of these costs across the various product lines and retail outlets. This job was chosen for the first run because it made only modest demands on the I/O equipment, which was not yet fully working in 1951. More interesting, the computer's function here was not so much to mechanize routine administrative work but to provide managers with prompt summary statistics and an analysis of costs and profits. In other words, from the very outset LEO was not just a data-processing installation but a management-information system.
The LEO experiment was a remarkable success in its time, and yet today you will not find the LEO name in any catalog of computer brands. In the late 1960s, as competition among computer makers grew more intense, the Lyons board had to choose between the company's traditional lines of business and the computer division. LEO was merged, and eventually submerged, in the British firm International Computers Ltd., which was acquired by Fujitsu Ltd. in 1990. Lyons itself met a similar fate. In 1978 it was acquired by a consortium of breweries, and then passed from hand to hand in an immensely complicated series of mergers and acquisitions. Today, almost nothing remains of the original Lyons businesses. Cadby Hall, where the vacuum tubes of the first LEO hummed and glowed half a century ago, was torn down in 1985.
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