RED ALERT:
THE MILLENNIUM BUG COULD PUT YOU
OUT OF BUSINESS
by The Year 2000 Research Group Inc.
This Is Not A Test
If your doctor knew you had a virus that
had an 80 percent chance of causing long-term health problems and a 20 percent
chance of killing you at a specified date in the near future, would you
listen to your doctor's suggestions? If your entire town was infected and
there were not enough doctors, just how long would you wait to take remedial
action? Well, right now your business -- no matter what size or in what
sector is just as vulnerable. Why? Because of a doomsday scenario variously
referred to as the "Year 2000 date code problem", "Year 2000",
or the "millennium bug". The crisis has been perpetuated by a
very simple fact. Until recently, date fields in most computer hardware
and software applications used a two-digit year. The problem? When 99 flips
to 00 at beginning of the year 2000, it will be interpreted by the computer
as the year 1900 or another random date. The result will be chaos.
No One To Blame
Think back to the 1960s when punch cards
were used to store computer information. By using two digits instead of
four to represent the year, especially in applications such as financial
records where dates were frequently used, millions of dollars could be saved.
Indeed, this two-digit practice became the de facto standard for future
programming. At the time, however, programmers never dreamt their code would
still be used well into the 1990s. So here we are, less than three years
and counting until these two digit date-codes can cause us all enormous
problems. Already, many date-related applications are producing incorrect
results. According to a study by the Gartner Group, 90 percent of computer
applications that are not yet Year 2000 compliant will either crash or malfunction.
When it's Gone It's Gone
Unlike other deadlines, this one can't
be extended. Unfortunately, many executives and business owners who do not
yet realize the scope and complexity of Year 2000 compliance are in for
an unpleasant
Surprise. A recent study by RHI Consulting of 200
companies found that only 47 percent had begun to work on Year 2000 compliance,
and, of those who hadn't started, only 58 percent planned to do so within
the next 12 months. (By the way, starting is not the same as completing
on time). Small-to medium-sized business enterprises (SME) are even further
behind. These businesses are particularly vulnerable, because many think
that Year 2000 is a technology problem only, and that by applying simple
upgrades the entire problem will be solved. In the majority of cases this
is not true. Consider these examples: What if some of your major suppliers
can only achieve Year 2000 compliance on critical systems? What about the
rest of their systems -- systems such as shipping? What happens if suppliers
can't guarantee delivery deadlines for an indefinite time, because their
shipping system is still not Year 2000 compliant, or suddenly lacks interoperability
with their other systems? Think about it. You may have kept your stock deliberately
low. Perhaps one of your big customers may have to close their doors still
owing you money, because they won't be able to cope with the financial burden
of Year 2000 compliance. Or you may get tied up with litigation because
of business interruption caused by that same supplier. In fact, the Gartner
Group predicts that 45 percent of businesses will have severe cash flow
problems owing to this crisis. And you can forget getting help from the
banks. They will really tighten up when there is a run for loans for operating
funds. No doubt banks will soon start demanding Year 2000 compliance status
before approving business loans.
Appreciating The Risk
Here are a few more business risks that
you may be courting. Personal liability from business interruption suits,
for starters. If you can't deliver on a contracted obligation you won't
be able to argue those Year 2000 problems were unforeseen events. You must
be able to prove that you exercised "due diligence" or you will
be accountable. As far as cost, the longer you wait, the less available
and more expensive computer consultants will become. Already, U.S. information
technology companies are raiding Canada for personnel in short supply for
future conversion projects. If you have resident programmers, think about
this. Will they be able to resist these larger salaries south of the border?
I'm Safe Because I'm Small
You're safe, because you're small? You think you can handle your own Year
2000 conversion project? Fine and good, but you should seriously consider
having your conversion checked out by an experienced professional. After
all, the high degree of interconnectedness in most applications amplifies
the fragility of the overall system. For example, the next time you go to
your bank, ask their representative if they can really guarantee that all
programs and hardware for their ATMs will be Year 2000 compliant -- just
in case you want to withdraw some cash on Saturday, January 1, 2000. And
it's only a small step from here to envision the potential chaos in the
larger financial markets. All it takes is one major financial institution
that is not fully Year 2000 compliant and the panic will begin.
Methodology for Year 2000 Compliance
The first step is awareness. Be sure that
everyone in your business is fully aware and sufficiently involved in resolving
the Year 2000 problem. Secondly, conduct a Year 2000 compliance assessment
for your computer systems as quickly as possible. This assessment should
include clarifying how much of the problem will be resolved by in-house
staff or outsourced consultants. Consultation with partners and customers
should also be part of the strategy. Next, the third step- the actual conversion
-- should be carried out. Following that, the fourth step is testing for
compliance and interoperability, which experience has shown can take up
to 50 percent of the total time frame. To allow for testing, this means
that for medium-to large-sized companies, conversion projects must be completed
by the end of 1998. Small companies can't assume they have more time, because
compliant software upgrades may not be available (especially sector-specific
applications) or, to make matters worse, they may not have interoperability
with other applications. Finally, once conversions are complete you will
be able to return to regular operating procedures. Monitoring will be necessary
for at least a year.
Now Is The Time
There is no good news if you ignore the
millennium bug or fail to act. You will be stung. But with some insightful
planning, you can use this time as an opportunity to integrate system improvements
with your compliance projects. And you'll be ready for those extra customers
when your competitor's systems crash and burn.
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A Year 2000 Win/Win Decision to Make Now
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