Today's Wall St. Journal - Banks Increase Y2K Spending : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Staff reporter Rick Brooks states that spending increases "are another sign that many banks underestimated the problem."

Article says new cost estimates are millions of dollars more than they estimated just three months earlier.

Reporter Brooks says that according to Gartner Group's Jim Duggan, "One reason costs are still growing is that some banks uncovered problems that hadn't been identified earlier."

Article found at page A10, column 2, in hard copy.

-- Puddintame (, March 31, 1999


Let's see, March 31, 1999, any chance they may discover more UNKNOWN problems next quarter and the quarter after that and the quarter after that?


-- Ray (, March 31, 1999.

Ray, good point. To elaborate on that issue, the implication of the article is that this news is from SEC reports recently filed reflecting activity during the last quarter of 1998. The article does state explicitly that the cost estimates are being compared with Sept. 30 estimates.

The Gartner Group comments are reported as though they (the Gartner comments) were made recently.

I wish the reporter had been a little more specific in discussing time periods since we're at a point when a fiscal quarter is an astoundingly significant increment.

-- Puddintame (, March 31, 1999.

At this point in time any spending increase must be due to increased manpower. Maybe some new equipment, but not much.

It's doubtful that increased manpower -- relative to budget -- is due to increased hiring. Trying to bring new people on board at this date might be counterproductive.

This tells me the banks were anticipating laying off programmers in 1999, that the budgets called for reduced staff.

-- budget (out_of@wack.ohh), March 31, 1999.

I recall an article (sorry, can't source) in the midst of the Asian crisis about the September time frame that stated banks were considering paring back their Y2K budgets. So it makes sense that they would have thought they were laying off people, not only for finishing, but also for bottom line concerns.

A side quote to this: "Projects don't really end; managers just find an interesting place to pause." - Tom Wujec

-- Brett (, March 31, 1999.

The additional costs may be "accounting costs", and may not represent any additional total costs to the company. If a company increased the proportion of its programmming staff which was working on y2k from 50 per cent to 75 percent, addition costs would be allocated to y2k. The costs allocated to other projects would decrease and those projects would have to be deferred.

-- Dave (, March 31, 1999.

Moderation questions? read the FAQ