Costs Rise As Y2K Battle Goes Down To Wire

Article: San Jose Mercury News http://www.sjmercury.com/business/tech/docs/012813.htm

Posted at 7:12 a.m. PST Tuesday, November 10, 1998 Costs rise as Y2K battle goes down to wire

LONDON, Nov 10 (Reuters) - The estimated cost of dealing with the millennium ``bomb'' in Europe and the U.S. has risen 20 percent in last six months and some organisations may not now finish their work in time, a study released on Tuesday said.

The comprehensive survey by European computer consultancy Cap Gemini found the total estimated cost of dealing with the problem had risen to $858 billion from $719 billion predicted in April.

So far, some $494 billion of this has been spent with $238 billion invested in the last six months alone.

Cap Gemini said it calculated the major economies were roughly halfway through fixing the problem caused by the inability of some computer systems to recognise the date change from 1999 to 2000.

But the pace of progress varies from country to country and within sectors, with the United States generally better prepared but less confident about its millennium programme.

While there had been a greater sense of urgency within business in recent months, Cap Gemini Vice Chairman Geoff Unwin said:

``But the brutal truth remains that the fight against the millennium problem will go right down to the wire. As costs increase, many organisations are working on ultra tight deadlines, with only half doing real-time testing before the year 2000.''

If costs continue to escalate at the current rate, there is a real danger that the completion date will slip beyond 2000 for some organisations. A three-month slippage would result in three out of 10 organisations failing to finish in time.

Within Europe, Cap Gemini said France and Germany had accelerated their efforts in the last year, but Britain and the Netherlands had slipped in comparison.

The U.S. is better prepared and virtually all U.S. companies are now planning some form of business continuity measures, it added. This contrasts starkly with Europe where only six out of 10 organisations are developing contingency plans.

Of the $238 billion spent on the millennium project in the last six months, around one-fifth has gone on hardware, one-fifth on software and the balance on staff costs.

-- Diane J. Squire (sacredspaces@yahoo.com), November 10, 1998

Answers

The Cap Gemini report, Diane, goes along well with the one from the Gartner Group that (in my interpretation of it) says that there will be more spending on Y2K in 1999 than 1997 and 1998 combined.

Of course it's too late. Basically a Y2K project at a company needs to have started by 1997 to be successful. Problem is, there are far too many companies and utilities that just started assessment a few months ago. And there are still those small businesses that don't know that Windows 95 is "compliant with ISSUES", or what putting two digits for the year in their spreadsheet can do.

My only optimism on Y2K is that maybe early glitches this coming January and February will lead to an all-out assault on it during the rest of 1999. Perhaps the government will step in and do their best to insure that AT&T and the electric utilities will operate through 2000.

What I'm afraid of though is that the amount of concern needed to get Y2K fixed...is the same amount that will push the stock market down by investors worried about company profits, and worried about just what will happen in 2000.

My best case scenario for the US is deep recession and shortages in 2000, but telephones and power being available most of the time. There is one thing I'm still in denial about: jobs. I know that even in a best case scenario, I should expect that millions in this country will lose their jobs. I could be one of those millions.

No, it doesn't look as if this is going to be taken care of in time.

What scares me is that now we're only 8 weeks away from when the onion's layers starting peeling off. First layer in the news on, say, January 4, 1999?

-- Kevin (mixesmusic@worldnet.att.net), November 10, 1998.

As of today, according to my screensaver, less than 10,000 hours.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), November 10, 1998.

It's less than 10,000 hours till January 1, 2000.

It's less than 1300 hours till January 1, 1999.

-- Kevin (mixesmusic@worldnet.att.net), November 10, 1998.

10,000 hours less weekends and holidays for Y2K work.

-- Anti-chainsaw (Tree@hugger.com), November 10, 1998.

Diane,

Tonight's ABC news, with Peter Jennings, talked about this report. I almost fainted when they actually said it was too late to fix all of the systems! I've checked for the transcript, but it's not out yet. It wasn't a very long piece, but Y2K does seem to be getting more airtime.

-- Gayla Dunbar (privacy@please.com), November 10, 1998.

Gayla,

The local S.F. 11:00 news, KRON Channel 4 TV will do another blip on Y2K tonight. I fired of a "D minus" e-mail to them this morning on last night's presentation. We'll see if they get better at reporting this. I'm confident that if all us us give feedback, whenever we see a presentation, that the media may change their approach bit by bit!

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), November 10, 1998.

"The survey showed that companies and organisations that had made the most efforts to fix the problem were the least confident that their attempts will succeed." - Cap Gemini 98/11/10

"The problem is systemic. It can't be fixed." - Gary North 96/11/11

nuff said...

-- a (a@a.a), November 10, 1998.

I also saw the ABC News piece tonight. A 45-second sound byte that actually surprised me. So far, ABC seems to be 'covering' (and I use the term quite loosely) Y2K better than the the other major 'news' (again, used loosely) networks. The piece wasn't spectacular (simply because it was not 'in-depth') but most people don't have time for 'in-depth', they want the 'executive summary'. The short piece did hit business management where it hurts the most - in their wallets.

Top level management tends to listen much better when you bite them in their corporate cash reserves first. And now that maybe just a few more are beginning to pay attention, let us remind them to use the resources they do have both soon and wisely. Fix or make contingency plans for those things that are truly mission critical to the organization and its customers. Ignore the rest. Triage.

-- Arnie Rimmer (Arnie_Rimmer@usa.net), November 11, 1998.

Arnie,

Y2K will "bite them in their corporate cash reserves first."

Hopefully we'll then see more media action in reporting balanced truth ... Problem/Solution. Can't be fixed? Problem/Solution. It's one way to protect their "cash reserves."

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), November 11, 1998.

Gayla,

In case you haven't found the ABC transcript yet, here are the links:

Too Late to Squash Y2K?

http://abcnews.com/onair/worldnewstonight/transcri pts/wnt_981110y2k_trans.html

-- Kevin (mixesmusic@worldnet.att.net), November 12, 1998.

Thanks, Kevin! I really appreciate it! It was short and sweet, but I was amazed at what WAS said. Problem is, not many are listening.

-- Gayla Dunbar (privacy@please.com), November 12, 1998.

Yet. They will.

-- Diane J. Squire (sacredspaces@yahoo.com), November 14, 1998.