CONTENTS Enthoven, Alain C.-"The Systems Analysis Approach" (Prepared for the Special Subcommittee on the Utilization of Scientific Manpower, Senate Knorr, Klaus-"On the Cost-Effectiveness Approach to Military Research and Development" (from Bulletin of the Atomic Scientists, November Rickover, Vice Admiral H. G.-"Cost-Effectiveness Studies" (Excerpt from testimony, Subcommittee on Department of Defense, House Committee Rowen, Henry S.-"Bargaining and Analysis in Government" (American V [Presentation prepared for the Special Subcommittee on the Utilization of Scientific Manpower, Senate Labor and Public Welfare Committee, 89th Congress, 2d session, May 17, 1966] THE SYSTEMS ANALYSIS APPROACH By Alain C. Enthoven (Assistant Secretary of Defense, Systems Analysis) It is a great pleasure for me to appear before you this morning and to have the opportunity to make a contribution to the use of Systems Analysis on problems of State and local governments. I believe that this is a most worthwhile objective and that there are clear possibilities for making major contributions to the public welfare through the broader use of Systems Analysis at all levels of government. What I have to say will be based on our experience in the Department of Defense. But, I want to emphasize at the outset my conviction that the problems of State and local government and the problems of education, natural resource management, pollution of the environment and public health and welfare are no more complex and no less amenable to systematic, rational analysis than are the problems of defense. I need only mention our current problems in NATO and in defeating aggression in Southeast Asia to illustrate the point that we have our share of complex problems. While I would not want to suggest that Systems Analysis has "solved" these problems, I think that it is fair to say that a systematic and integrated approach to the gathering and presentation of information on the alternatives available to our Government has made the work of our responsible decisionmakers easier and more productive than it might otherwise be. * * * * * There is a great deal that might be said about the Systems Analysis approach. In this statement, I would like to pick out a few of the aspects that seem to me to be especially relevant and to make these points largely by the use of excerpts from A Modern Design for Defense Decision.* In my statement, I would like to expand on the following points: (1) Systems Analysis is a reasoned approach to problems of decision, accurately described as "quantitative common sense." (2) Systems Analysis is an application of scientific method, using that term in its broadest sense. (3) There are limitations in the application of Systems Analysis, although these have often been overstated. (4) In 1961, the Defense planning and budgeting system had to be changed to permit the application of Systems Analysis. Industrial College of the Armed Forces. A Modern Design for Defense Decision-A McNamara-Hitch-Enthoven Anthology, edited by Samuel A. Tucker. Washington, D.C., 1966. (5) Systems Analysis is a regular working contributor to the annual Defense decision making cycle. (6) Two necessary conditions for the successful application of Systems Analysis as a working part of an operating organization are that it be used by decision-makers, and that it be fed with ideas by a broadly based interdisciplinary research program. (7) Systems Analysis can be applied to the problems of State and local government, including programs for social welfare. I. SYSTEMS ANALYSIS APPROACH Systems Analysis is nothing more than quantitative or enlightened common sense aided by modern analytical methods. What we seek to do in the systems analysis approach to problems is to examine an objective in its broadest sense, including its reasonableness or appropriateness from a national policy point of view, and then develop for the responsible decision-maker information that will best help him to select the preferred way of achieving it. This process of selection requires that we first identify alternative ways of achieving the objective and then estimate, in quantitative terms, the benefits (effectiveness) to be derived from, and the costs of, each alternative. Those aspects of the problem that cannot easily be quantified are explicitly stated. In principle, we strive to identify the alternative that yields a specified degree of effectiveness for the least cost or, what is the same thing, the greatest effectiveness for a given cost. In essence, it is a way of dealing with the basic economic problem-how best to use our limited national resources. So much for what systems analysis is. A few words on what it is not. Systems Analysis is not synonymous with the application of computers. There is no essential connection between the two. Certainly the development of the former in no way depends on the latter. Some researchers, working within the limits of the systems analysis approach, try to do their analyses by means of large-scale computer simulations. Actually, the computer simulation approach so far has not been particularly fruitful as a method of weapon systems analysis. However, the potential advantages offered by high-speed electronic computers are very great. One of the primary advantages of the computer to the systems analysis function is to permit us to examine a much larger number of alternatives in a shorter period of time than would be otherwise possible. This is especially important in the case of very complex and interrelated systems where hand calculations would limit the time available for the more important work of analysis. I intend to try to exploit more fully the potential of high speed computers. But I would like to make it clear that I view the computer as a mechanical aid in my work and not as the substance of my work. Moreover, systems analysis is not mysterious or occult. It is not performed with the help of a mysterious black box. A good system analyst should be able to give a clear nontechnical explanation of his methods and results to the responsible decision-makers. |