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State Controller Fears "Ripple Effect" of Y2K Non-Compliant Companies; Connell Suggests California's Small Businesses Prepare Contingency Plans (Last updated 2:47 PM ET January 20)

SAN JOSE, Calif. (BUSINESS WIRE) - State Controller Kathleen Connell Wednesday released a report by her office raising concern that Y2K non-compliance by California's small and medium-sized companies could cause severe negative financial repercussions in the state.

"Many California businesses will encounter major disruptions in service due to the non-compliance of their vendors and other entities they depend on. Resulting delays and diminished inventories, coupled with the threat of excessive litigation, could cost the state billions of dollars -- adversely impacting our economy."

Connell noted that surveys suggest that as many as 50 percent of the nation's data processing organizations will not have their software Y2K-compliant by 2000.

This low level of compliance in many of California's small and medium-sized companies could result in lost orders, incorrect billing and accounting, supply chain interruptions and other mishaps, causing a negative "ripple effect" throughout California's economy.


C'mon pollyannas. Is the State's Controller just a wild-eyed scaremonger?

The bottom line is this. In order to avoid economic mayhem we need virtual total compliance. Yet more than half of ALL companies will not be compliant. We will never get a chance to actually know what the real percentage will be. probably closer to IT metrics and Pareto's Law, 20% compliant and 80% not.

We won't know because it will be no time for taking surveys during an economic collapse.

Paul Milne If you live within five miles of a 7-11, you're toast.

-- Paul Milne (, January 22, 1999



WHy should CA be any different? Some of my clients (consultants and partners to the Fortune 500) have said to me that the small and medium size/cap companies in the country are not doing anything at all and are waiting for the Saviour To Come to save them. Not a pretty visual whjen you consider they are talking about businesses the size of (but NOT REFERRING TO) Pro Baseball and smaller!

chuck, a night driver

-- Chuck, night driver (, January 22, 1999.


I can say, at least in Silicon Valley, that there is now a GOOD push on by executives at the bigger high-tech firms, who are Y2K compliant and ready, going around and giving local Y2K presentations to small and medium sized businesses in the area. (My neighbor is one of the many executive presenters).

It's also worth remembering that smaller firms can swap out to new PC's within a week's time, depending upon Microsoft's Y2K abilities. Or they can choose the Mac platform.

Frankly, I'm more concerned about the power staying on at PG&E. They are the one's who determine if Northern California will become "burnt" toast or not.


-- Diane J. Squire (, January 22, 1999.


I know people (very well) who own a business which employs roughly eighty people. They are DWGI even though they are already experiencing Y2K related problems. i.e. their software doesn't recognize Visa exp. dates post Y2K as valid (read exp.) They know they are not Y2K comliant and are now trying to replace their whole system. It kills me that they don't put 2&2 together about the possibilities of our infrastructure. They think 'they'(you know, govt. utilities etc.) will fix everything because 'they' stand to lose money. But these people ignored y2k until they actually started experiencing problems. (even though it's only their livlihood) Why is is so hard to see that others may ignore it as well?

Perplexed, Deborah

-- Deborah the Prophetess (, January 22, 1999.

The original report is here

In the Jan. 99 report. Page 10 and the conclusion are esp. interesting. Draw your own conclusions. Have the acrobat reader ready to go - run the .pdf from the remote site unless you want a copy.

I thought the really interesting part of the Excite article was:

"The Controller raised the possibility that she may sponsor liability legislation to ensure that innocent California companies will not be vulnerable to runaway litigation despite their best efforts to be Y2K compliant."

Sounds like she is trying to prod small and medium business while drumming up support for legislation.

-- Paul Davis (, January 22, 1999.

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