Early FY00 rollover/Jo Anne effect/SEC filings

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There's already a thread re the Dec 31, 1998 "remediation deadline". There is a similar milestone for all those companies with a Feb 1999 rollover, except they have to finish (remediation, test, deploy, the whole shebang) all their financial systems by January 31, 1999. The Jo Anne Effect will certainly be felt if they haven't gotten their systems compliant by the time they need to look-ahead.

Anyone triangulated their SEC filings versus this deadline? I would think that Nordies and Wal-Mart (to name only 2) would have spent the bulk of their Y2K budgets by now. Anyone done this analysis?

-- Mac (sneak@lurk.com), December 17, 1998

Answers

Mac, can you tell me what the Jo Anne Effect is?

-- Linda A. (adahi@muhlon.com), December 17, 1998.

Linda, see site:

JoAnneEffect

-RC

-- runway cat (runway_cat@hotmail.com), December 17, 1998.


You can also look at http://www.computerpro.com/~phystad/jae.html for an explanation written by me.

Pam Hystad very kindly put this page up with a link from the csy2-k FAQ.

Yes, guys - I'm still lurking here!

-- Jo Anne Slaven (slaven@rogerswave.ca), December 17, 1998.


Yeah, yeah, Jo Anne. We know. You and Paul just have your searchbots set on your names. Watch this.....MILNE.

Hallyx

"Not one shred of evidence exists to prove the idea that life is serious."

-- Hallyx (Hallyx@aol.com), December 17, 1998.


This is also the "effect" that made me spend a whole bunch of money in a da*n short time, and to put old SANTA on a diet too.

I realized that while it wasn't immediately going to kill a business it could not help but delay their y2k compliance efforts. You can't go "pedal to the metal" on y2k work on your primary business operations plans if your IT folks have to run over to this thing and fix it, and since this is money, you can bet "Big Guy" is going to holler for the fix. I also realized that I really didn't want anybody screwing around with the stores where I had to buy the things that I knew I needed. At the time I didn't know that WalMart had a Feb. fiscal year. Guess who owns SAMS club? I also realized that I didn't have that "time cushion" that I was so sure of.

Yes, this Lady gave me a nudge just when I needed it.

Thanks again Ms. Jo Anne.

As far as a wake up call for J.Q.P.? I would think not. This will probably go unnoticed by the world. But this is a part of the Death of a Thousand Cuts isn't it?

It's vital to the business involved (and to their food chain)but Ho Hum to the world. Who knows?

S.O.B.

-- sweetolebob (La) (buffgun@hotmail.com), December 17, 1998.



Mac,

Good question about the the companies that start a new fiscal year on February 1, 1999 and their SEC filings. I just did some checking on that, and the results are interesting.

Of the 28 Fortune 500 companies that start a new fiscal year on February 1, 1999, six have provided information to the SEC indicating a finished remediation date AFTER February 1st. Here are those six:

Dayton Hudson (they own Target) - 06/30/1999

Federated Department Stores - 04/30/1999

Dillard's - 06/30/1999

The Gap - 06/30/1999

BJ's Wholesale Club - 03/31/1999

Kohl's - 06/30/1999

Now, this doesn't mean these companies will have system failures in February 1999. The remediation done so far may have already taken care of the financial software. Also, we don't know for sure what failure of fiscal-year software means to a company's day-to-day operation, and its ability to serve customers.

One other thing: the source I used for info on Y2K remediation work, http://www.flybyday.com/y2k/, had no information on 14 out of the 28 companies that start their new fiscal year on February 1, 1999. So, these six may not even be the six most likely to have financial software failures.

By the way, Wal-Mart in its SEC filing claims to have done 95% of its remediation already done, and expects to be finished by December 31, 1998. There is no "percent completed" or expected date for completed remediation for Nordstrom.

http://www.flybyday.com/y2k

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000Eb9

-- Kevin (mixesmusic@worldnet.att.net), December 18, 1998.


Ah, Kevin, you dah Man - assuming, of course, that you are male. "On the Internet, no one knows you're a dog."

Anyhoo, many, many thanks for that analysis. 50% of the companies in question can't be reviewed for progress as yet, so we should "Red Flag" them. On the other hand, Wal-Mart is cranking, as befits their rep as an IS leader in retailing, so they get a Green, if not perhaps a Gold rating. Sam's Club is making big bucks selling bulk supplies and their IS group is getting the systems shipshape and Bristol fashion. A small piece of good news 'midst all the foolishness.

-- Mac (sneak@lurk.com), December 18, 1998.


My employer would probably have fits if I were to disclose here who they are, (can't be caught sounding as if I were speaking for them) but I will say that I am an IT manager for one of the companies you list as completing remediation after the beginning of our new fiscal year on 2/1/99.

There are several things to consider about issue, not all of which apply to my employer, but which you should think about.

1. The "JoAnne Effect" is based on the understanding that the true deadline for Y2K compliancy is not 1/1/2000 but the first date on which date-type data for dates on or after 1/1/2000 is processed. Even if a fiscal year begins on a particular date, not all systems at a company are going to begin processing post-Y2K dates on that date. At my employer, only a few of the applications in our portfolio are at risk on 2/1/99, and they have already been made compliant and repeatedly tested.

2. On a similar note the JoAnne effect, while originally defined for financial systems, is not limited to them. I know of at least one major system in our shop not supporting the finance operation that encounters the JoAnne Effect on 1/1/99, a full month before our fiscal year begins. Again, that system has been tested and shown to be ready to handle the situation. Don't fall in to the trap of treating all computer systems as financial in nature, because it isn't so.

3. The date where full compliance is expected for all systems is, as Mac states in his original post, inclusive of testing and deployment into production. Furthermore, there is nothing that says all systems have to be deployed at the same time. In fact, doing so would be a nightmare. Deployment of systems occurs over time, and so long as each corrected system is deployed in advance of its JoAnne Effect deadline, the company is in good shape.

4. Just because 100% compliance is expected on a certain date, don't think that the Y2K efforts end then. I can't speak for the other shops on the list, but we have planned a series of continuing tests even after compliance is achieved. We consider it time and effort well spent. I certainly do, since it has been made clear to us that each IT manager's job depends on complete compliance of the systems that s/he is responsible for. With that hanging over my head, my motto is "Test until we drop!"

Again, let me state that my comments should not be construed as representing the opinions or policies of my employer. They are my observations and a smattering of anecdotal evidence drawn from my employer's situation. They are mine alone. Who else would want them, anyway?

-- Paul Neuhardt (neuhardt@ultranet.com), December 18, 1998.


I understand the Jo Anne effect could play havoc with individual US companies. What happens on March 31 (US date), when Japanese banks hit their fiscal 2000 date? Does anyone know if all Japanese banks use this date for their fiscal year?? Since this would make "Asain Contagion" look like molehill, what could we expect of market??

-- William Saunders (ifrav8r@usa.net), December 21, 1998.

William,

On April 1, 1999, Japan enters its *1999* fiscal year. Britian, Canada, and New York state will be entering their fiscal year 2000 in April 1999, though.

-- Kevin (mixesmusic@worldnet.att.net), December 21, 1998.



I suspect that the so-called "Jo Anne Effect" has already occurred at most large companies. My company (less than 400 employees) has been having trouble with our financial accounting system since last year. First, the system won't take expiration dates for subscriptions past 12/31/99. Also, the accounting dept. has to finagle some dates in the system every month so they can close out the month. It seems the system looks ahead to FY2000 and the close-out routines fail. Of course we are upgrading the system, but until that is completed there are already workarounds in place. I would assume that if a company as small as ours is having these types of glitches, then large corporations must be as well.

-- Buddy (DC) (buddy@bellatlantic.net), December 21, 1998.

Ed Yourdon has a new article on the coming problems in January 1999. Figures from a major New York investment bank give hints on the extent of Y2K problems in January 2000 vs. Y99 problems that will appear about two weeks from now.

"...to the extent that the investment bank mentioned above is representitive, you should expect that you'll have approximately 30 times as many bugs to deal with on 1 Jan 2000."

http://www.yourdon.com/articles/9901cw.html

"Quantifying the Extent of the Y2K problem" is the name of Ed's article.

-- Kevin (mixesmusic@worldnet.att.net), December 22, 1998.


Paul, thanks for the insight. What is the confidence in the status of all of your suppliers and vendors?

-- Mark (gal220@face2face.com), December 22, 1998.

Just saw a new article on potential January 1, 1999 problems. Here are the first two paragraphs:

"LONDON - The Port of London Wednesday said it has instructed vessels not to move or discharge liquid cargoes for one hour either side of midnight on New Year's Eve if there is any possibility that 1999 dates could cause their computers to malfunction.

"The port said it feared certain ship-fitted computers could fail when their clocks roll over to 00:00 on January 1, 1999."

http://detnews.com/1998/technology/9812/25/12240196.htm "London port fears 1999 computer bug may hit ships"

-- Kevin (mixesmusic@worldnet.att.net), December 26, 1998.


Mark,

"Paul, thanks for the insight. What is the confidence in the status of all of your suppliers and vendors? "

As you might expect, high with some, not so high with others. To be honest, I don't know many details about the status of our various vendors. I do know that we have a fairly agressive campaign to ensure that our suppliers are okay, and if that means changing vendors during the next year, then so be it. We make them prove to us that they are okay: one little mealy-mouthed letter saying "we are fine, trust us" doesn't cut it.

-- Paul Neuhardt (neuhardt@ultranet.com), December 30, 1998.



Paul,

Must be nice to have that ability to reject the little mealy mouthed letter. Chuck (whose boss just ran a many-paged request from Anderson back to them)

-- Chuck a night driver (rienzoo@en.com), December 30, 1998.


Chuck,

"Must be nice to have that ability to reject the little mealy mouthed letter."

We wouldn't be doing or fiduciary duty to the company if we didn't. It's that simple. Of course, not everyone sees it that way (even inside my company, BTW). Such is life.

-- Paul Neuhardt (neuhardt@ultranet.com), December 31, 1998.


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