Group Questions, Business contingency plans

Question:

If you are strictly a programmer, how much say do you have in helping businesses prepare for the year 2000?   For it seems to me that the situation has gone beyond the point of no return, and businesses should be refocusing on contingency planning.  See

Are there not moral dilemmas involved in working (and getting paid for) a project that has no hope for success?  I am not criticizing, I am merely questioning for myself.  As I am in a position where I can help companies prepare, but personally I think it is a futile effort.

How many out there are working as part of a team?  Or are the majority doing projects solo?  Also, are your commitments to one company for the duration, or are you doing multiple projects?

Answer:
No company is an island, so to speak.  So how will it benefit a solitary - company (or even a group of isolated companies) if everyone else in their - community is no longer capable of purchasing or selling goods. It is easy to dwell on the bad news.  I am not a Pollyanna; I fully understand the seriousness of the problem.  But to answer the question as to why continue working, consider:

(1) The Gartner Group's estimate that 25% of U.S. companies won't have their systems ready in time.  But that means that 75% will have their systems ready in time.  Every company which completes their project in time means some measurable fraction less turmoil in 2000.  If one of your suppliers doesn't make it, switch to his competitor who has.

(2)  Too many people who post to this newsgroup discount the huge number of companies which run packaged software.  These are companies in every industry.  If you doubt me, check out:   or  or  Or a banking software company:    There are literally tens of thousands of companies which are going to be ready by "simply" installing the year 2000 compliant version of their chosen software package.  If push comes to shove (like when one's very existence is in question), this can be done pretty quickly--there is an advertising "white paper" in the April issue of News/400 which details an installation of SAP R/3 at Starwood Hotels & Resorts Worldwide, a multibillion dollar corporation that employs 35,000 people.  This installation was completed in roughly 100 days.

(3)  The FDIC's bank scorecard, as published in the Feb.. 16th issue of Computerworld, rated 79% of banks as making satisfactory progress towards getting their systems ready.  There was a letter to the editor in the March 23rd Business Week by Paul A. Schosbeg, who is president of the industry group, America's Community Bankers.  This group represents 2,000 banks in the U.S.  Mr. Schosberg reviewed the scrutiny by the FDIC, noted that his industry has requested even more because of the year 2000 problem, and stated that his group's members will be ready in time.   There was a post by a bank's programmer in this ng recently; he noted that his bank's systems have been ready for some time, but because the FDIC hasn't performed the final test/certification yet, his bank is not  officially "certified."

Once again, I am a realist; I know that there is going to be serious economic disruption in the U.S., and perhaps much worse overseas.  I am just stating the reasons I continue to help my company get ready--so it will be one less to worry about in 2000.
 As for the Gartner's estimate, there is new research just released today.  See below for the complete news release . snip -(1) The Gartner Group's estimate that 25% of U.S. companies won't have -their systems ready in time.  But that means that 75% will have their -systems ready in time.  Every company which completes their project in time -means some measurable fraction less turmoil in 2000.  If one of your -suppliers doesn't make it, switch to his competitor who has. snip

Mr Paul Milne may have a new recruit if research continues to show information like this :-) Date: 4/21/98 7:24:29 AM Mountain Daylight Time Year 2000 Wire/Securities Filings Research Reveals 60% of Largest U.S. Corporations Are Only in First Phase of Year 2000 Project      MISSOULA, Mont.--(BUSINESS WIRE)--April 21, 1998--      Triaxsys Study Shows 45% of Nation's 250 Largest Companies      Admit They May Experience Adverse Material Impact From      Incomplete Y2K Projects      According to a recent analysis of federal securities filings of the nation's 250 largest corporations, 60% of the companies that supplied pertinent information have still not completed their Year 2000 computer assessment -- one of the first phases of any Year 2000 project.      This surprising lack of progress was discovered through a study performed by Triaxsys(TM) Research LLC, a research and analysis company founded by Ian Hayes, William Ulrich and Steve Hock. Triaxsys researchers reviewed the 250 largest (ranked by revenue) U.S. companies' federal securities filings on the U.S. Securities and Exchange commission's EDGAR database, including Form 10K filings for companies with fiscal years ending in December 1997. The Year 2000 disclosure data was then compiled and analyzed for individual company and industry progress. Complete results will be published in the April issue of Triaxsys Research Reports, available later this month. -0- *T Key findings included: --   The majority of surveyed companies started their Year 2000      conversion efforts late and have made very little progress --   These largest 250 companies will have total Year 2000 projected      expenditures of at least $33 billion; only 20% of the total has      been spent to date --   45% of companies that discuss risk factors state they may suffer      adverse material impacts due to incomplete Year 2000 projects --   Nearly half of the surveyed companies either did not disclose      their Year 2000 program status or supplied meaningless      boilerplate information, giving investors very little on which to      base Year 2000 investment judgments -0-      Steve Hock, president of Triaxsys commented, "For quite some time, the 'common wisdom' among IT analysts, the media and other commentators has been that the largest U.S. companies have the Year 2000 problem under control. However, our analysis of what the companies have disclosed in their securities filings goes contrary to this widespread anecdotal information. Even among the 250 largest companies, the average corporation is still in the preliminary stages of its project. Given that the end of the century is drawing near, and that many systems will hit their time horizons of failure well in advance of the end of 1999, these statistics are sobering."      The majority of the nation's 250 largest companies have started their Year 2000 conversion efforts late. Despite the forseeability of the Year 2000 problem and time estimated to complete the effort, even the largest corporations have been slow to start work on it. Of the companies reporting the year in which they began work on the Year 2000 problem, 2% began before 1995, 28% in 1995, 35% in 1996 and 34% in 1997.      The majority of companies that have disclosed project status have made very little progress. Of the companies that disclosed the status of their Year 2000 projects, 58% are in the first phase -- the assessment of their internal systems. Some 36% stated that they are in the process of converting at least some systems and only 6% stated that they are in the process of testing at least some systems.      The largest 250 companies will have total Y2K projected expenditures of at least $33 billion; only 20% of the total has been spent to date. Another way to gauge Year 2000 project status is through cost expenditures. The average company among the largest 250 will spend $131 million each, for a total of at least $33 billion by the 250. For the companies disclosing both costs incurred through the end of 1997 and total estimated costs through project completion, the statistics show remarkably little progress. Measuring project progress by the percentage of estimated total project costs expended through the end of 1997, the statistics show a range of only 7% to 45% progress toward completion. These companies on average will spend $146 million on Year 2000, with an average of only $30 million of this total being spent to date. Results are shown in the following chart: -0- Year 2000 Progress Measured by Percentage of Total             Estimated Costs Expended Through Year End 1997                               ($000,000)                            Costs Percentage of        Company            Incurred     Total     Estimated Total            Through    Estimated   Costs Incurred              1997       Costs      Through 1997 Least  progress       $42       $565          7%             General Motors Most  progress       $45       $100         45%             First Chicago                                                            NBD Average  progress       $30       $146         21%              Largest 250                                                          Average -0-      "This information highlights two important investment issues," said Ian Hayes, executive vice president, Triaxsys Research. "It's good news for investors in Year 2000 vendor stocks because the majority of the projected Year 2000 expenditures, at least $27 billion, is still waiting to be spent. It's bad news for those heavily invested in the Fortune 250 companies and should warn investors that increased pressure on corporate management is needed to safeguard their investments."      The largest companies state they may suffer material impacts due to incomplete Year 2000 projects or failures of third parties. Some 38% of the companies that commented on Year 2000 risk factors, stated that they could suffer adverse material impacts if they do not complete their projects on time. 45% of the companies that commented on Year 2000 risk factors stated that they could suffer adverse material impacts if third parties (partners, suppliers, customers, government agencies and/or others) do not achieve Year 2000 compliance.      According to William Ulrich, executive vice president, Triaxsys Research, "The 10K filings that we studied state that 80% of the work is yet to be done. This indicates that companies have back-loaded Year 2000 risks into 1998 and 1999. Ultimately, this means that companies will miss conversion deadlines and force project teams to put untested code back into production where the material costs of business disruption will skyrocket. Very few companies understand what these costs mean to their long-term viability."      "Another problem," added Ulrich, "is that while numerous companies have stated in their filings that supplier and customer failures present an unknown challenge, they do not state the potential material impact in terms of bottom line losses. This is one of the most dangerous unknowns surrounding the Year 2000 dilemma."      Many of the largest 250 companies either did not disclose Year 2000 status or supplied meaningless boilerplate information. Some 15% of the 250 companies surveyed did not provide any information on their Year 2000 status. An additional 32% disclosed meaningless boilerplate language in their securities filings to the effect that "based on current information" or "assumption" they do not believe the Year 2000 problem will have a material effect on their businesses.      Hock commented, "This group of companies has either made no progress with regard to Year 2000 conversion or their status is unknown to the Securities and Exchange Commission and the public at large. This lack of information gives investors very little upon which to base Year 2000 investment judgments." For More Information      For the fully detailed report on SEC filings of the 250 largest companies, contact Triaxsys directly at 1-888-320-8882. The annual subscription rate for Triaxsys Research Reports is $995.


-(1) The Gartner Group's estimate that 25% of U.S. companies won't have -their systems ready in time.  But that means that 75% will have their -systems ready in time.  Every company which completes their project in time -means some measurable fraction less turmoil in 2000.  If one of your -suppliers doesn't make it, switch to his competitor who has. Fact is, after a major IT failure, 90% of affected corporations file bankruptcy within one year.  Thus 25% failure to remediate equates to the failure of 22.5% of all businesses.  That is significantly higher than occurred at the beginning of the great depression and would logically have a greater adverse economic impact on society.  

And this does not even begin to take into account the adverse effects of not just a domino effect but also a feedback effect on and between the "survivors".  It also does not take into account the potential and probable loss of major segments of the infrastructure or the effect of embedded systems failures.

Further, IIRC, Gartner is now estimating a *much* higher rate of failure (as am I).  50%, perhaps?

If you think there is *any* chance of surviving with anything like today's economy, then you are not just a pollyanna, you are mathematically challenged.

-(2)  Too many people who post to this newsgroup discount the huge number of -companies which run packaged software.  These are companies in every -industry.  If you doubt me, check out:   or -  or  Or a banking software -company:    There are literally tens of thousands of -companies which are going to be ready by "simply" installing the year 2000 -compliant version of their chosen software package.  If push comes to shove -(like when one's very existence is in question), this can be done pretty -quickly--there is an advertising "white paper" in the April issue of -News/400 which details an installation of SAP R/3 at Starwood Hotels & -Resorts Worldwide, a multibillion dollar corporation that employs 35,000 -people.  This installation was completed in roughly 100 days. There are *very* few "packages" which are installed in larger businesses (anything above mom&pop) without a great deal of user customization (I have personally worked on several such customization projects during my extensive career).  Such additional code can and almost certainly does contain non-compliant date handling.  This is *especially* true of SAP.

The bank I am working for is *still waiting* for compliant versions of several packages, all of which have additional custom code, and all of which must *still be tested* after installation (this is an absolute requirement of the bank examiners).  In addition, we have one major "package" for which we *do* have the source code but the vendor is now out of business.  This package has *major* Y2K problems and I doubt that it will be fixed in time.

-(3)  The FDIC's bank scorecard, as published in the Feb. 16th issue of -Computerworld, rated 79% of banks as making satisfactory progress towards -getting their systems ready.  There was a letter to the editor in the March -23rd Business Week by Paul A. Schosbeg, who is president of the industry -group, America's Community Bankers.  This group represents 2,000 banks in -the U.S.  Mr. Schosberg reviewed the scrutiny by the FDIC, noted that his -industry has requested even more because of the year 2000 problem, and -stated that his group's members will be ready in time.   There was a post -by a bank's programmer in this ng recently; he noted that his bank's -systems have been ready for some time, but because the FDIC hasn't -performed the final test/certification yet, his bank is not  officially -"certified." First of all, whoever posted that was a liar.  The FDIC doesn't "test" or "certify" anyone's systems, they simply have the authority to examine them and make recommendations.  (They can also close the bank down if they don't like what they see, and have promised to start doing so in September for the worst cases).

The examiners also visited my client recently, and gave them a thumbs up as being "on target".  The bank itself also recently ran a public ad stating that we are well on our way to compliance.

The problem is, it just isn't true  --  as evidenced by an email I just received asking why we are falling behind the schedule.  I have been saying for months that we aren't going to make the dates, and I presently estimate that we are about four months behind their already unrealistic schedule.  I expect it to get *much* worse before the end of the year.

And I'm not even going to get into some of the really *stupid* technical decisions which are being made each and every day, many of them making the problem worse rather than better.

So are all these good people intentionally deceiving our customers and the general public?  By no means!  They actually *believe* that *they* (meaning us) will get the problem fixed if only *they* work harder. The problem is that *they* (meaning management and examiners) simply don't have any valid, realistic concept of what is involved in fixing these problems, and so they continually underestimate the workload and the time required to complete it.  They just don't *listen* to the real experts -- those of us who are doing the actual work.

The sad part is that their pollyanna attitude will do more harm than the Y2K bug itself.  Because of it, there will be no serious contingency planning until it is far too late, just as their attitude to date has already led to a situation in which it is now too late for any significant remediation.

Because of this, what should have been just a nasty little bug from which everyone could recover will now become THE WHITE DEATH -- a worldwide plague every bit as deadly to human life as the black death of the 1300's.

-Once again, I am a realist; I know that there is going to be serious -economic disruption in the U.S., and perhaps much worse overseas.  I am -just stating the reasons I continue to help my company get ready--so it -will be one less to worry about in 2000. No, Bob, you are *not* a realist.  You are a Pollyanna just like my client's management and just like the FDIC.  You are the *problem*, Bob, not the solution, and based on your comments I *seriously* doubt that you are really working in the belly of the Y2K beast.


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