More companies are experiencing Y2K failures : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Published Sunday, May 23, 1999

More companies are experiencing Y2K failures Steve Alexander / Star Tribune

Because most Y2K computer failures to date have been kept quiet by the companies that suffered them, the Y2K debate has focused on what might happen in the future.

The latest indications are that some business people are worried they may not finish Y2K corrective work on time and that some consumers are worried about cars, computers, VCRs and microwave ovens.

The lack of information about actual Y2K failures to date was underscored by a recent survey by Cap Gemini America, a New Jersey-based computer consulting firm. It reported -- without giving details -- that 72 percent of the corporations and government agencies responding to a survey said they had experienced a Y2K-related failure through the first quarter of 1999, up from 55 percent at the end of December.

The survey showed that 82 percent of the companies experiencing Y2K failures said the problems caused data-processing disruptions, 93 percent said they caused financial miscalculations, 38 percent said they caused logistical or supply-chain difficulties and 28 percent said they caused customer service problems. Cap Gemini said the survey included 152 Fortune 500 companies and 14 federal, state and local government agencies.

So what are the corporate folks worried about for the future? Tardiness.

About 22 percent of those surveyed said they do not expect to have all of their critical computer systems tested and ready when the clock ticks over to Jan. 1, 2000, the New York Times reported. That's up from 16 percent in November and 12 percent last August.

"The largest companies in the nation continue to fall behind their schedules for Year 2000 repairs, and most suspect that their budget estimates for the remaining work are too low," the Times said of the survey, which was completed in April and was the latest in a series that Cap Gemini has sponsored since 1994.

Industry variations

Y2K readiness continues to vary by industry, with the financial services and the computers and software categories leading in preparedness, while the health care and the government categories are lagging, said Jim Woodward, a senior vice president at Cap Gemini America, based in Iselin, N.J.

Business people also are worried about their suppliers. Eight percent of those surveyed said they had severed relations with a supplier, customer or partner because of Y2K problems, the first time such actions have been reported, the Times said.

In addition, Woodward suggested another worry for business people that wasn't included in the survey: Even some software that supposedly was made Y2K-compliant is still flawed and may not work correctly.

Woodward said Cap Gemini's independent auditing of Y2K repair work in corporations has shown that 10 percent of all software that has been fixed still contains Y2K flaws that would cause it to process information incorrectly.

"Everyone agrees there will be some sort of disruptions," said Howard Rubin, an information technology researcher based in Pound Ridge, N.Y., who conducts the Cap Gemini surveys. "The real issue is going to be how you maintain business continuity."

Added Woodward, "I think the survey suggests that we have reasons to believe we have made good progress, but that we shouldn't be overly optimistic. We still have a lot of work to do and there are still a lot of things that can go wrong."

On the home front

What are consumers concerned about? Cars, followed by consumer gadgets.

Larry Shafer, the owner of a Web site called ( ), said a tally of about 4,000 visitors a day on his site shows that the chief consumer worries are the Y2K compliance of automobiles, followed by that of computer hardware.

Shafer concedes that the hits on the Web site reflect consumers' Y2K concerns, but may not reflect which products really pose the biggest Y2K threats. Microwave ovens, for example, have not been considered much of a Y2K risk.

"All we can measure is what consumers are concerned about, not what will actually break or what the greatest area of impact will be," he said.

The site, which began operations in March, takes its Y2K compliance information from about 1,500 corporate Web sites, said Shafer, a San Francisco developer of e-commerce Web sites who runs the Y2K site as a sideline.

Products and services listed on the Y2K site include cars, computers, software, travel, government, health care, insurance, utilities and home electronics and appliances.

"If you don't find what you're looking for on the site, you can e-mail us and we'll research it for you for free. It typically takes about three days, and we both e-mail the information back to the user and put it on the Web site," Shafer said.

-- The New York Times contributed to this report.

) Copyright 1999 Star Tribune. All rights reserved.

-- Arlin H. Adams (, May 24, 1999


Let me give everyone a memory test...since MY memory isn't the most reliable these days. It seems to me that Cap Gemini is simply a consulting firm...has been for years. When (exactly) did they get into the survey business? It ALSO seems to me that Cap Gemini is the consulting firm that estimated 2 million dollars to remediate a municipality somewhere recently. It ALSO seems to me that the municipality performed the function in-house to the tune of more like $150,000. Aren't they STILL duking that one out?

When I see Cap-Gemini (who hires independents like myself as subcontractors), I have to wonder about these things. When I see reports like the Weiss report wondering why the budget currently spent isn't higher, I have to wonder who made the estimate? If it was Cap, I'd DEFINITELY believe their progress reports over any estimate of what it SHOULD cost.

I don't believe that Y2k is a piece of cake to get fixed, but when I see the big consulting firms pimping out sub-contractors (taking 66% of the billing rate for themselves) AND estimating 10-20-30 fold of what the job actually consists, it gets my fur up. When I see OTHERS using the estimates done by these firms who suggest that because they didn't spend x% of the budget and claim to be Y% ready, it gets my fur up even further.

Anita (who has her fur up beyond belief.)

-- Anita Spooner (, May 24, 1999.

Anita --- Most consulting corps are whores. Period. I speak from intimate experience on both sides. Let the fur fly.

But this survey can hardly be considered "good" news. Most companies self-report on the optimistic side, not the pessimistic side. Consequently, I expect more than 22%, not less to be "not done" and I find their reports about budget shortfalls reasonably credible. I guessed at the beginning of 1999 when the first reports of unexpected release of consultants began happening that it was primarily due to internal political issues (I won't go into details unless you insist) and had nothing to do with remediation status. To be blunt, management probably didn't have much of a clue where remediation stood, positive or negative.

Basically, the survey is saying, however scientifically, "stuff is starting to happen, we're behind and we're getting scared."

That sounds reasonable to me. Too bad it wasn't happening in 1997 when there was enough time to fix and test the critical stuff. Heck, they could even have gotten Hoff in and installed SAP everywhere ... only takes a couple of years or so to do it right, IMO.

-- BigDog (, May 24, 1999.

You're wrong, Big Dog. WE are the whores who work for the PIMPS like Cap Gemini. They make 66% off of every dollar we make.

"Consequently, I expect more than 22%, not less to be "not done" and I find their reports about budget shortfalls reasonably credible. I guessed at the beginning of 1999 when the first reports of unexpected release of consultants began happening that it was primarily due to internal political issues (I won't go into details unless you insist) and had nothing to do with remediation status. To be blunt, management probably didn't have much of a clue where remediation stood, positive or negative."

It's to Cap Gemini's benefit that they report these things, Big Dog. They'll be out of business if folks don't believe they still have problems. They're STILL counting on lots of Y2k work even though MY (and don't extrapolate on that) experience is that the Y2k work on major systems has been completed in THIS area [again...not to be extrapolated to OTHER areas of the U.S.]

I won't address your opinion of Hoff and SAP. I maintained a mainframe system while waiting for a SAP install, and (last I heard) they STILL didn't have the sucker working. ANY variation on a theme throws SAP into never-never-land. [Sorry, Hoff...I usually agree with much of what you post.]

I WOULD like to hear your details, because the work here has pretty much dried up for big systems. In fact, we're hearing from pimps nationwide that the work has dried up.


-- Anita Spooner (, May 24, 1999.

Actually, BigDog, only 6 months (err, party line, using ASAP methodology). Have seen it done, but as Anita said, variations, depending on the complexity, can add enormous amounts of time. Also, the level of expertise of the partner is a definite factor.

Ain't nobody, especially me, touting SAP at this point as a potential solution for somebodies Y2k problem, if the project isn't well underway. (Well, maybe SAP is still trying)

BTW, Anita, speak for yourself. The pimps only get 30% of my rate.;@}

-- Hoffmeister (, May 24, 1999.

They've never gotten 66% of mine either, Hoff, but I've never subcontracted for Cap. There was a SAP programmer, however on the contract that I mentioned that was making $35/hour and being billed out for $125/hour. This wasn't through CAP, but SAP. Admittedly, he was a new SAP programmer also. It's amazing how those that feel they're getting ripped off confess to the other contractors their feelings on same.


-- Anita Spooner (, May 24, 1999.

Anita, you don't work for SAP for the money; you work for SAP for the experience, and to put those three letters on your CV.

One (of the many) reasons I don't work through any of the "Big ??" companies. Too many partners, too much "overhead". I don't necessarily mind paying a pimp, just don't, umm, want to get "screwed" in the process.

-- Hoffmeister (, May 24, 1999.

Anita --- You're right: they're the pimps, correct. And, as for my opinion of Hoff, he is my favorite polly (Flint on steroids).

On the other hand (listen up, regulars), if Hoff thinks SAP can be installed in six months, I NOW UNDERSTAND why he thinks Y2K is going to be reasonably okay. Wow, is he clueless (Hoff, I actually like SAP a lot, though it's probably because I come from Swiss-German parentage with some American Indian thrown in to make me truly nuts between the two). Hopefully, he was just kidding, as he implied.

Now, when I say "details" I can be viewed as cheating and speculating since I'm delightedly out of the consulting/big systems loop and having fun running an Internet ecommerce startup into the ground. My gut feeling from years of past experience is that three things happened around the turn of the year:

1. Management was told by grunts that Y2K was under control. The grunts are always glad to give the finger to consultants.

2. Management never wanted to spend the big bucks on Y2K anyway. This enabled them to cancel or defer agreements with consulting companies and partly explains why spending is/seems less than originally projected. Management is always glad to give the finger to consultants.

3. The consultants probably over-reached both in terms of projected Y2k budgets but, even more, by tying remediation proposals to cosmic plans for re-doing all of IT by, say, the year 2020. See 1. and 2. above for the reaction (it's kind of recursive). Management AND grunts are always glad to give the finger to consultants.

Anita and Hoff: I sincerely believe you wrongly project your own competence onto organizations in general. It's not ALL Dilbert-ville but when we were doing honorable consulting and audits (and we were self-damagingly honorable, really), the level of organizational incompetence (that is, individual geeks and even managers, ha!, were generally competent but the "ecology" was dysfunctional) never ceased to amaze us.

Anyway, Anita, here is a prediction: long about August, expect the Y2K consulting market to heat up again as management gets the picture and turns on the grunts (management is ALSO glad to give the finger to the grunts) who happy-faced stuff.

The good news next year is that the companies that make it will be desperate for your expertise, since there will still be lots to fix. The bad news is that you will be competing with lots of hungry people for the work.

As for Hoff, I have this question: is SAP itself (that is, the corporation), Y2K-compliant? If not, they can just install SAP and .....

-- BigDog (, May 24, 1999.

Wasn't kidding that it can be done. Seriously, I've actually done it.

SAP is still pushing it. Here's a release from March: press/03_99/03_99_10.htm

SAP Offers Small and Midsize Companies Y2K Assurances

Hanover, 18 March 1999. Today at CeBIT 99, SAP AG (NYSE ADR: SAP), the world's leading provider of enterprise business software solutions, detailed its continued proactive role in helping small and medium-sized businesses address challenges related to the year 2000 with the introduction of the new readY2000 solution, a total computing package developed with SAP partners that delivers certified year 2000 compliance. During 1998, over 100 customers with annual revenues under $500 million implemented year 2000-compliant SAP R/3 solutions in four months or less.

"Even as we near the end of the first quarter of 1999, there is still time for companies to switch over to business software that uses four-digit year fields," said Henning Kagermann, co-chairman and CEO of SAP AG. "Given the speed with which companies are now going live with R/3, there is sufficient time for midsize companies to start an R/3 implementation now and ensure the year 2000 compliance of their business systems. The readY2000 solution makes the process of ensuring full year 2000 compliance even easier."

Y2K Awareness Program Announced
SAP also announced that several hundred R/3 customers of all sizes have begun to take advantage of the new SAP year 2000 awareness program that allows the use of special SAP year 2000 preparedness logos on correspondence and literature. By displaying this logo, companies have an effective means to let partners, customers and employees know they will continue uninterrupted operations through the turn of the millennium.

For most midsize companies, a major challenge is to certify year 2000 compliance across all their hardware, network and software components since these are sourced from different vendors. To address this problem, SAP has taken the lead in organizing with its partners a fully year 2000-compliant computing infrastructure, including hardware, operating system, database, archive system, networking and migration concept together with SAP R/3. This entire package has been certified as year 2000 compliant by the German technical inspection authority RWT\V.

Available now in Germany, readY2000 will become available in other countries in the near future. For those midsize companies launching a readY2000 project even as late as the fourth quarter, the project can be implemented quickly enough that at least basic core functions will operate during the switchover to the new millennium. Companies can then continue a more comprehensive implementation.

Companies participating in the development and certification of readY2000 include Hewlett-Packard Co., iXOS Software, Microsoft Corp., Intel Corp., Cabletron Systems Inc., AC-Service, Schweickert Netzwerktechnik GmbH and C&S Consulting & Solutions GmbH.

Proven Implementation Accelerators
Midmarket companies around the world that went live quickly last year leveraged proven SAP rapid implementation and support programs, including AcceleratedSAP, Ready-to-Run R/3 and TeamSAP. These proven implementation solutions and programs make it possible for companies not only to expedite full year 2000 compliance, but also to move their business operations to the fully Internet-enabled and industry-leading SAP R/3 solution.

From its inception, SAP R/3 was designed to be year 2000 compliant. All year fields are defined in four digits and all date fields are defined in eight digits in the SAP data dictionary. In addition, SAP can coexist with systems and data feeds that use two-digit year date fields through programs that can correctly interpret and automatically convert two-digit year dates to four-digit numbers. Customers report that the year 2000 compliance provided by SAP R/3 has helped them to avoid any interruptions in their business operations. "We wouldn't be able to take orders for the year 2000 without R/3. We wouldn't be able to plan them out, we wouldn't be able to order all the materials," said John P. Dibble, manager of information technology for Riverside, Calif.-based Luxfer Gas Cylinders, a manufacturer of high-pressure aluminum cylinders. "Like every other corporation in the world, we have a decree that we must be year 2000 compliant, and SAP R/3 has enabled us to accomplish that."

AcceleratedSAP Proven Effective
Industry analysts who have conducted in-depth studies of the SAP approach to rapid SAP R/3 implementation have concluded that the programs from SAP are highly effective at helping companies meet schedule targets and stay on budget. "We sought the answer to a simple question: 'Is AcceleratedSAP working?' The answer was clear and unequivocal: AcceleratedSAP works," said David Alschuler, managing director of enterprise applications and electronic commerce at Aberdeen Group Inc. "Our research indicates that there is a very high probability that you will achieve cost and schedule objectives as well as the majority of your business objectives if you commit to AcceleratedSAP and follow the methodology." The Aberdeen Group surveyed more than 25 percent of all AcceleratedSAP customers who went live in the second quarter of 1998.

The success of AcceleratedSAP is not just limited to small companies. Subaru-Isuzu Automotive Inc., a $3 billion company in Lafayette, Ind., was running on legacy systems that were neither year 2000 compliant nor integrated. The company was able to go live with R/3 Financials, Materials Management and Funds Management in four months. "One of our goals with implementing SAP R/3 was to minimize the implementation time so we could quickly utilize the benefits derived from SAP R/3, along with our desire to concentrate on running our business," said David Rausch, assistant senior finance manager and R/3 project manager for Subaru-Isuzu Automotive.

-- Hoffmeister (, May 24, 1999.

Hoff -- I have one word for you:


-- BigDog (, May 24, 1999.

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