Advanced Computer Techniques

Advanced Computer Techniques

Company type	Public
Industry	Computer software, IT consulting
Founded	1 April 1962 (1962-04-01) in New York City, United States
Founder	Charles P. Lecht
Headquarters	New York City , United States
Area served	International
Key people	Charles P. Lecht (founder and president), Oscar H. Schachter (executive vice-president)
Products	Language compilers (FORTRAN, COBOL, FORTRAN 77, Pascal), development utilities, IT consulting, hosted service bureau operations, behavioral health applications and services
Number of employees	318 (1981)

Advanced Computer Techniques (ACT) operated as a computer software enterprise from the early 1960s through the early 1990s, focusing on software offerings such as language compilers and associated development utilities. The company also engaged in information technology consulting, managed hosted service bureau operations, and delivered applications along with services targeted at behavioral health providers. Key subsidiaries included InterACT and Creative Socio-Medics.

Author Katharine Davis Fishman, in her 1981 publication The Computer Establishment, and computing historian Martin Campbell-Kelly, in his 2003 book From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry, both identified ACT as a typical independent, medium-sized software company representative of its time. The Charles Babbage Institute at the University of Minnesota also regards ACT’s corporate history as noteworthy.

Founding and early history

Established in New York City in April 1962 by Charles P. Lecht with an initial capital of $800, one contract, and a single employee, ACT’s founder was a mathematician and entrepreneur who had been engaged with computing since the early 1950s and brought experience from both IBM and MIT Lincoln Laboratory.

The company’s inaugural project involved repairing a language compiler for the UNIVAC LARC system utilized by the United States Navy, which led to a $100,000 contract. Lecht assembled a team of programmers and established the first office space atop the Plaza Hotel. ACT was one among approximately 40–50 emerging software startups during the early 1960s, many of which eventually ceased operations.

Compiler creation formed the core of ACT’s initial business focus; its first product was a FORTRAN compiler developed in the mid-1960s, followed by a COBOL compiler later that decade, and subsequently compilers for both FORTRAN 77 and Pascal during the late 1970s. By the end of the 1960s, ACT had cultivated a clientele comprising established corporations and had gained recognition for dependable quality and punctual delivery. In September 1964, the firm secured office premises in Midtown Manhattan close to Madison Avenue, remaining there for the duration of its existence. Early customers included UNIVAC, IBM, and Honeywell.

Due to a scarcity of formally trained programmers at that time, Lecht recruited individuals from disciplines such as music, linguistics, or mathematics who demonstrated adaptability to programming tasks. ACT broadened its scope into system software and scientific programming projects—including defense contracts—before expanding into commercial applications for companies like Union Carbide, United Airlines, Hoffman-LaRoche, and Shell Oil. Lecht fostered an informal workplace environment characterized by casual dress codes and flexible scheduling, while instituting weekly progress reports from developers that were shared with clients to ensure transparency and effective expectation management.

Management personality

Lecht was recognized as an extravagant and distinctive leader, often described as a "showman" by peers, clients, and rivals alike. His office was notably adorned with silver tiles, reflecting his flair for publicity. ACT gained significantly from his promotional skills; both Lecht and the firm were featured in The New Yorker in 1967 and later appeared in trade magazines such as Datamation, which referred to him as "one of computerdom's most flashy characters."

He authored multiple programming manuals and led project management seminars for the American Management Association. These sessions were later compiled into his 1967 publication, The Management of Computer Programming Projects, which is considered among the earliest books on the subject. In addition, ACT released A Guide for Software Documentation in 1969, edited by Dorothy Walsh, which became a frequently referenced resource within the industry.

Among Lecht’s more unconventional projects was the album Paean, featuring corporate spirit songs from IBM performed by the Association of British Secretaries in America—reflecting the fact that many of ACT’s secretarial staff originated from England. Issued by Skye Records in 1969, the album was a popular giveaway at events like the Joint Computer Conferences. The title song honored Lecht with lyrics such as:

Charles Lecht is our leader

Ideal idea breeder

The source of our strength

and the spine of our will

Lecht’s 1979 work, The Waves of Change, which anticipated transformations within the computer sector, was serialized in Computerworld—marking a first for a trade journal—and published by McGraw-Hill. The foreword was penned by Gideon I. Gartner, founder of the notable Gartner Group. The book enjoyed strong sales and elevated both Lecht’s profile and ACT’s through nationwide speaking tours.

Counterbalancing Lecht’s eccentric nature was executive vice-president Oscar H. Schachter, a Harvard-trained attorney known for his more traditional approach. Initially serving as legal counsel and board member, Schachter joined full-time in 1966 and described his role as the company’s "governor," providing essential oversight. He also took an active role in the Association of Data Processing Service Organizations (ADAPSO), a prominent industry body during the 1960s.

ACT demonstrated progressive hiring practices by appointing several women to vice-presidential positions by the late 1970s and early 1980s.

Expansion and diversification

ACT transitioned to a publicly traded company in May 1968. The initial public offering was handled by boutique underwriter Faulkner, Dawkins & Sullivan, with shares soaring nearly four times their initial value on opening day, signaling robust investor enthusiasm for technology stocks.

Between 1968 and 1970, revenues fluctuated between $2.5 million and $3.2 million. The company expanded beyond consulting and software by acquiring Rhode Island Lithograph and Informatab in 1969, while also launching Inter-ACT—a training division focused on producing computer manuals for educational institutions and businesses. Lecht envisioned ACT as a "supermarket of services for the computer industry."

Similar to many software companies at the time, ACT encountered unprofitable contracts and a decline in demand that led to its first financial losses during 1971–72; Lecht responded by shuttering offices and reducing staff by half. By 1974, revenues rebounded to $5 million.

Service bureaus became an important area of diversification, contributing roughly 40% of revenue by 1979. These bureaus operated in New York, Phoenix, Tucson, Edmonton, and Milan, concentrating on industries such as Canadian oil and construction sectors. Consulting offices also had intermittent presence in London, Paris, Chicago, and Atlanta.

ACT ventured into packaged software with compilers and development tools, securing Data General as a significant client amid the growth of minicomputers. Nevertheless, limited marketing resources and difficulties adapting to product-focused investment models hindered expansion.

During the 1970s, ACT established operations in Tehran. As IBM withdrew from Iran and the Shah's administration adopted Honeywell systems as standard, ACT subcontracted with Honeywell’s Italian branch to deliver inventory management systems for Iran’s military. This contract temporarily accounted for up to one-quarter of ACT's business but terminated during the Iranian Revolution. Subsequently, ACT sought recompense through the Iran–United States Claims Tribunal, receiving approximately $300,000 in 1983.

ACT also explored word processing by acquiring Base Information Systems along with its Ultratext System technology and collaborating with Honeywell to implement it on Honeywell Level 6 minicomputers. Despite favorable evaluations and ongoing promotion through 1979, competitors like Wang Laboratories dominated this market segment. Schachter later reflected that missing this opportunity was "one of our worst failures."

By 1979, ACT had developed into an international mini-conglomerate with revenues surpassing $16 million—ranking among the top 60 out of more than 3,000 companies involved in software, services, and facilities management—with domestic and international earnings roughly equal. By 1981, its workforce numbered about 318 employees. Job advertisements for ACT were commonly found in industry publications such as Computerworld. The company maintained distinctive practices; for example, Lecht emphasized employing a psychologist to address employee concerns as an innovative corporate strategy.

Leadership changes and strategic realignment

During the early 1980s, ACT encountered significant financial difficulties. While revenues remained around $15–16 million in 1980 and 1981, the company suffered losses exceeding $0.6 million and $1.5 million in those years, respectively. Several units, including service bureaus, operated at a deficit, exacerbated by budget overruns in developing Pascal compilers and accounting complications related to long-term contracts.

After receiving capital investment from the San Francisco-based firm Birr, Wilson, a board member from outside the company advocated for reform, openly criticizing CEO Lecht’s hesitation to eliminate loss-making divisions. This led the board to collectively decide on Lecht’s removal in May 1982. Although Lecht presented his departure as a voluntary move to focus on writing and public speaking, industry insiders recognized it as a forced resignation. Subsequent legal disputes were resolved by February 1983 when ACT repurchased Lecht’s shares. Following his exit, Lecht went on to establish LSI (Lecht Sciences Incorporated).

Oscar Schachter took over as president after Lecht’s departure and was promoted to CEO in 1983. ACT sold off its Phoenix and Edmonton service bureaus and shuttered two smaller unprofitable units by late 1982, which helped the company return to profitability in the second half of that year. Revenue reached a high of $18 million in 1982 but declined to $11 million in 1983 due to restructuring efforts. Nevertheless, revenues gradually climbed back to $15 million by 1986, with operating profits exceeding $1 million.

Throughout the decade, ACT broadened its language product offerings aimed at embedded systems within the defense sector. The initial JOVIAL compiler was introduced in 1981 for the Zilog Z8002 processor, soon followed by a version supporting the MIL-STD-1750A architecture. These compiler packages included assemblers, linkers, runtime environments, simulators, and symbolic debuggers, typically running on IBM System/370 mainframes or VAX minicomputers operating under VMS. General Dynamics emerged as a prominent customer for JOVIAL compilers, particularly for F-16 avionics systems, with sales extending to additional defense contractors.

In 1984, Prudential-Bache Securities injected $3 million into ACT to support new product development initiatives, which accelerated growth in commercial language compilers. By 1985, a BASIC compiler was launched and bundled alongside COBOL, FORTRAN, and Pascal compilers for AT&T Computer Systems’ 3B series machines. A C language compiler followed in 1986, incorporating enhancements that supported COBOL-85 and draft FORTRAN 8X standards under a contract with BiiN.

This capital also enabled ACT to develop an Ada compiler system tailored for MIL-STD-1750A processors by integrating a front-end licensed from Denmark’s DDC-I with ACT’s proprietary back-end tools. ACT became the first U.S.-based firm to achieve Ada compiler validation for this architecture under the stringent Ada Compiler Validation Capability (ACVC) testing suite, strengthening its foothold within defense industry clientele throughout the decade.

During the early to mid-1980s, ACT maintained a commercial applications division that notably contributed components to Chemical Bank’s innovative Pronto home banking platform. Despite extensive marketing efforts, Pronto experienced limited market penetration due to its advanced nature for the time period, ultimately leading to the dissolution of the applications group in 1986.

InterACT

In July 1987, ACT separated its compiler and tools software unit into a joint enterprise named InterACT, with LSI Logic holding a two-thirds stake and ACT retaining one-third. The venture focused on creating solutions for the CASHE (Computer Aided Software/Hardware Engineering) domain by integrating ACT’s compilers and debuggers with LSI Logic’s CAE tools, alongside innovative elements such as bridged hardware/software simulators and graphic editors. This product line, initially branded CASHE and later renamed the System Design Environment (SDE), was designed to assist developers of embedded systems in designing and debugging software prior to hardware prototype availability. Additionally, ACT aimed to leverage LSI Logic’s broader sales and marketing channels. Over time, ACT phased out its commercial compiler development, although it did achieve some sales with a C cross compiler targeting the Intel i960 embedded processor.

The first CEO of InterACT was Schachter, who was subsequently succeeded by Edward D. Bright, an executive from ACT; Schachter continued leading ACT itself. From its inception, InterACT operated at a financial deficit, recording losses of $0.5 million in late 1987 and $2.5 million in 1988. The complexity and expense involved in developing the SDE product led LSI Logic to withdraw from the partnership.

Recognizing the potential of SDE within IBM’s strategic approach of investing in emerging companies, an IBM executive facilitated changes in ownership. In November 1988, InterACT reacquired LSI Logic’s shares and sold 40% equity to IBM along with 11% to Prudential-Bache Securities; these investors were publicly disclosed in early 1989 amid fluctuations in ACT’s stock price. By March 1989, both ACT and InterACT collectively employed approximately 140 individuals.

By 1990, the expansive SDE initiative was discontinued; focus shifted toward the InterACT Integrator—a data management platform hosted on Sun Microsystems workstations aimed at integrating CASE tools—which ultimately failed to secure market acceptance.

InterACT continued independently developing Ada and JOVIAL language products. In 1988, it licensed backend compiler technology from MIPS Computer Systems for the MIPS R3000 RISC processor and introduced an Ada cross compiler for this architecture in late 1989, achieving modest commercial success.

Despite these endeavors, InterACT’s financial condition worsened, leading to several rounds of layoffs starting in September 1989. In October 1991, DDC-I acquired InterACT’s Ada and JOVIAL embedded systems division; the remaining SDE and Integrator operations were subsequently shut down.

Creative Socio-Medics

Founded in 1968 by Gerald O. Koop and John F. Phillips, Creative Socio-Medics (CSM) was acquired by ACT in 1973. CSM specialized in providing software solutions and integrated hardware/software services tailored for behavioral health organizations such as psychiatric hospitals and mental health clinics. Its deployments included extensive networked systems for clients like the Psychiatric Institutes of America and the New Jersey Department of Human Services. The subsidiary also maintained a team of research analysts dedicated to behavioral health topics.

Initially relying on batch processing systems, CSM transitioned during the 1970s to offering software on online turnkey minicomputer platforms. By the late 1970s, all CSM applications were rewritten using the MUMPS programming language—a language that gained widespread adoption within healthcare environments.

While CSM operated largely autonomously within ACT, it occasionally partnered on initiatives including MUMPS implementations for Digital Equipment Corporation’s PRO series microcomputers and Tandem Computers’ NonStop fault-tolerant servers. Additionally, ACT’s Network Processor served as the underlying technology for CSM’s Human Services Network Information System.

Over time, CSM evolved into a major subsidiary contributing significantly to ACT’s financial performance throughout the 1980s. Its profitability varied over time and it seldom maintained robust financial health. In 1989, CSM moved from ACT’s main facilities to Islip, New York.

In June 1994, Creative Socio-Medics was divested to Carte Medical.

Fate

Following the divestiture of CSM, ACT was left without any active operations or assets, burdened solely by outstanding corporate liabilities. The company utilized the funds obtained from the sale to partially satisfy its creditors with a significant payment. As Schachter later remarked, "We simply faded away. We never formally dissolved or filed for bankruptcy ... we just gradually disappeared."

Several former ACT staff members remained engaged in compiler and system software development. Among them, J. Stephen Adamczyk, who had been an ACT compiler architect, established Edison Design Group in 1988. Alongside a number of ex-ACT commercial compiler team professionals, Edison developed a prominent front-end for the C++ programming language and played an important role in advancing ISO C++ standardization initiatives. Meanwhile, Schachter transitioned into legal practice focused on advising technology firms and held positions as vice president and secretary on the board of American Friends of Yahad-In Unum.

DDC-I took over ACT/InterACT’s JOVIAL and Ada compilers, rebranding them while continuing their development and market presence throughout the 1990s; these compilers remained cataloged as legacy offerings well into the 2020s.

Creative Socio-Medics experienced considerable growth after its acquisition by Carte Medical in 1994, which subsequently rebranded as Netsmart Technologies in 1996 and went public that same year. Operating as Netsmart’s business division, Creative Socio-Medics maintained consistent profitability through the early 2000s. After a significant acquisition in 2005, the Creative Socio-Medics brand was retired in favor of Netsmart. The company was sold for $115 million to private equity investors in 2007 and employed around 600 individuals by 2011. Ownership changes continued alongside expansion; by 2023, Netsmart had grown to approximately 2,600 employees.

Reflecting on his experience with ACT, Schachter stated, "I thoroughly enjoyed being part of this group. They were a group of really bright people. It was a fun company to work for ... I am just sorry we weren't more successful than it turned out we were."