Infomagic states (in part I, WRP100) that " a major IT failure in a medium/large organization means the end of the organization, even under the ideal conditions of a fully functional economy."

Can anyone confirm this statement through practical experience?

-- dave (wootendave@hotmail.com), January 24, 1999

Answers

The problem here is defining how "major" of an IT failure Infomagic is referring to.

The nastiest problem I've ever experinced is when we found out that a few important files in our database had been corrupted...the kind of evil corruption that doesn't show itself right away. Once it manifested itself in our invoices, two days had passed. After wasting another day trying to fix it, we had to restore from the last good backup tape. Basically we had to "rewind" our entire business three days during our busy season. We lost a lot of money. It was bad. It could have been much worse.

So, yes...it is possible. I'm sure it's happened before, and the company got bought by a competitor or whatever.

- Computers have no mercy.

-- Delete (del@dos.com), January 24, 1999.

Dave, this is one of the most important questions to be answered regarding the long term effects of y2k. The answers aren't clear.

After the Northridge,CA earthquake, about six years ago, there were quite a few business that went bankrupt due to the loss of their computers. However, it was hard to tell if that was the last straw that broke the the back of weak companies.

More important is what happens to banks, insurance companies and other large entities. Could they become so infected with bad data that it is very hard to fix? If so you would see TEOTBW: the end of the business world, with massive unemployment. We expected the Joanne effect to his this month and it sure isn't making many people lose sleep.

-- Tomcat (tomcat@tampabay.rr.com), January 24, 1999.

Two ideas here:

First, the statement has a bit of the odor of a tautology. How do we know if an IT failure is major? Well, if it kills the company it's major, otherwise it isn't. The statement proves itself by definition if you're not careful.

Second, the issue has been raised that Infomatic shouldn't be saying 'even under ideal conditions', he should be saying 'especially under ideal conditions'. In the country of the blind, the one-eyed man is king. We may soon enter the country of the blind.

-- Flint (flintc@mindspring.com), January 24, 1999.

I would say that is a pretty acurate statement. This is exactly why Y2K could be so devastating. It isn't so much the cost of correcting all the computers as it is the cost of lost business. Large firms could lose millions per day and be forced into bankruptcy. That's why there will be a horrendous amount of lawsuits. After these businesses find out exactly what malfunctioned they will be looking for someone to pay for it. Example: DELL computers sells about $6 million per day over the internet. If all of a sudden the systems of their potential customers take a crap and they can't get on the net, Dell loses business. We will see record numbers of bankruptcies, and years of litigation before they straighten out this mess.

-- (m.d.@d.com), January 24, 1999.

> Infomagic states (in part I, WRP100) that " a major IT failure in a medium/large organization means the end of the organization, ***EVEN*** under the ideal conditions of a fully functional economy."

My emphasis on the "even".

In a normally functioning economy with surplus capacity, a business's competitors will sieze on a major IT failure as a way of taking market share from the company with trouble. Usually it'll never get the market share back, and will be in major trouble as a result.

In a wartime economy, or any other situation where supply has fallen behind demand, this doesn't apply. It's more likely that the remaining suppliers will sieze the opportunity to boost their margins (they can't raise production to meet demand, so they'll use price to choke off some demand). And it's also likely that the customers of the company in trouble will want to help it recover, since the easy option of simply defecting to a competitor is not there and getting it back into business will give them back some downward leverage on prices.

So, "even" is unfair. It implies that in an economy under strain things will be worse for a company in trouble, when in fact they'll be less bad. (Still fatal maybe, but less obviously so).

Another implication is that death of a company equals cessation of its operations. Again, not necessarily true. A company that goes bust gets liquidated; it's competitors get a chance to buy up the production facilities at firesale prices, without having to take on any of the debts. If they decline to do so, it's either because of over-supply, or because building plant from scratch is more economic. These last two options are LESS likely to apply post-Y2K; hard times always encourage mend-it over scrap-it.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), January 25, 1999.

Don't you just love statements that sound profound but can't be proven one way or another? You need definitions of 'major IT failure', 'medium/large', 'end of the organization', 'ideal conditions' and 'fully functional'. You don't know what IFM meant by any one of these terms. A tactic used by many on the DOOM side. Is it the 'end' if a company is bought out by another? Can you have 'ideal conditions' during a recession? What does he mean by 'medium/large'? I don't have a clue. Which is why you don't see me tearing into all this kind of stuff - I have better things to do with my time than fight shadows. Most of these guys would fade like bad dye if they had to follow debating rules with a referee watching for this kind of vague statement.

-- Paul Davis (davisp1953@yahoo.com), January 25, 1999.

Real life major IT failures occur all the time and businesses survive. Personal example of being in a large bank that experienced a complete, unrecoverable crash of the mainframe. All data lost.

As with all banks, we maintained daily back-up tapes and had a contracted disaster recovery site. Within 12 hours, we had the system back online driven from that remote site with the files reflecting the prior day. Bank personnel then got busy re-entering all transactions from the day of the crash both manually and from electronic tapes that handled transactions for ACH, ATM, etc. Several days later, a new mainframe was installed and brought online.

Inconvenient to the customers and lots of overtime for the employees, but the bank survived. Since the mainframe was leased from IBM, it didn't cost us a penny to replace.

Not necessarily the kind of IT failure relevant to Y2K, but it goes to show just how exaggerated Infomagic's statement is.

David

-- David (David@BankPacman.com), January 25, 1999.

Has anyone noticed Paul getting testier as the situation appears to worsen?

Have you read the latest over at GAO, Paul? Huh?

Don't mean to sound harsh, but telling people to roll over and go back to sleep is going to get them kilt.

11 months to go, and people like Paul are still attempting to enforce calm...

E.

-- E. Coli (nunayo@beeswax.com), January 25, 1999.

Dave -

The answer is no from our correspondents - no personal experience of the Infomagic statement.

But lots of theories.

Andy

Two digits. One mechanism. The smallest mistake.

"The conveniences and comforts of humanity in general will be linked up by one mechanism, which will produce comforts and conveniences beyond human imagination. But the smallest mistake will bring the whole mechanism to a certain collapse. In this way the end of the world will be brought about."

Pir-o-Murshid Inayat Khan, 1922 (Sufi Prophet)

-- Andy (2000EOD@prodigy.net), January 26, 1999.

E., if you have definitions of IFM terms, email em to me and I will do the best I can with them. But I have been locked into too many unwinnable arguments because someone controlled the discussion by redefining terms every time I had him cornered to even attempt it without a definition.

-- Paul Davis (davisp1953@yahoo.com), January 31, 1999.