Intel buying backup generators.

If it looks like a duck, and quacks like a duck . . .

NY Times Article ----Alexi

May 27, 1999

COUNTING TO 2000

Worriers, Start Your Engines

Contingency Plans Hit Their Stride for Year 2000

By BARNABY J. FEDER

Donald Rose, the head of the Intel Corporation's global drive to prevent Year 2000 computer problems from derailing microchip production, is focused these days on 500 critical suppliers of materials and basic services like power and telephones.

About half are ready for the date change, Rose says. Intel is busy dispatching training, testing and auditing help to the others -- many of them abroad -- in the hope they will catch up. But hope is a high-risk business strategy, so Intel has begun buying backup generators, interviewing alternative suppliers and making other preparations for breakdowns.

It has plenty of company. The race to repair and test computers that has so far dominated the Year 2000 scene is far from over. But planning to cope with what might go wrong, until recently on the "do later" part of the agenda, is now in full swing.

After months of weighing options, businesses and governments are acknowledging that some disruptions are inevitable when computers encounter dates beyond 1999 and that they now face deadlines for investing in contingency plans. As is Intel, most are worried less about failures in their own systems than how they will respond to breakdowns in the supplies, transportation or communications links on which they depend.

As the plans are developed, millions of workers who previously had little exposure to Y2K, as the Year 2000 problem is known, are getting their first good look at how seriously their employers are taking it.

It is not a subject that executives and their project leaders like discussing in any detail. Unlike most repair work, contingency plans have to take into account not just the computer user's own systems, but all the outside forces the user cannot control, like public power, telephones, water and the readiness of both suppliers and major customers. The planners fear offending partners, inviting lawsuits and, in some cases, alarming customers or the public.

The Securities and Exchange Commission has told publicly traded companies to describe their Year 2000 contingency planning in their quarterly reports to the agency, but most are sticking to a few vague sentences indicating they are working on it.

The heart of the plan in many cases is likely to be arranging for more employees than normal to be on duty in the weeks before and after New Year, often to make sure a company can fall back on nonelectronic methods of business, such as taking shipping orders by phone. Vacations are being canceled and major computer users like Paine Webber are booking hotel rooms for New Year's Eve in back-office sites like Weehawken, N.J., to make sure technicians are near their data processing centers.

It is also clear that growing confidence that major disruptions are unlikely -- at least in the United States -- is putting pressure on managers not to propose costly investments. Consultants like Gartner Group say the sums budgeted for contingencies will average 10 to 15 percent of the hundreds of billions of dollars projected as the global tab for Year 2000 repairs and testing.

Still, the effort is opening a new window on how seriously the world is taking the Year 2000 challenge. The problem stems from decades of using two digits to represent the year in dates. Computers, software and electronic devices may malfunction if they read 00 as 1900 or do not understand that it is a date.

Most Year 2000 contingency planning by big computer users is aimed at coping with local disruptions similar to those society often experiences from equipment failures, bad weather and earthquakes. But big enterprises are also considering how to respond to a global blitzkrieg of disruptions.

"The danger of Y2K is a wide variety of things hitting simultaneously," said Charles Snyder, head of the Year 2000 project at Levi Strauss & Company in San Francisco. Levi has scrutinized how it might shift or delay production of its jeans and other products factory by factory. Snyder advocates ignoring the nature of specific Year 2000 problems and simply looking at whether the interruption at a factory would be a matter of hours, days or longer.

"You'd go insane if you try to handle it without some kind of streamlined game plan," he said.

Intel has begun installing extra power generators at factories in Asian countries and Latin American countries with shaky power grids. And its purchasers and technicians have been visiting companies it does not buy from today to see if they could step in if a supplier faltered.

"It takes us up to six months to qualify a supplier of something like specialty chemicals" to meet Intel's quality standards, said Rose, the company official leading the effort.

Business leaders hope contingency planning will reinforce the prevailing cautious optimism that the Year 2000 challenge is being met. "It shouldn't signal a sense of alarm," said Dana Bennett, who has overseen the Year 2000 project at Aetna, the insurance giant based in Hartford.

Jay Golter, co-founder of the Northern Virginia Year 2000 Community Action Group, disagrees. "It's just human nature that planning for disruptions will make people who haven't been paying attention more nervous," he said. But if nervousness raises consciousness, he said, the public will benefit.

Clearly the planning is going well beyond redeploying the army of technicians that have done most of the repair work.

Humana Inc., the health insurer based in Louisville, Ky., is turning to front-line employees like Zach Riser, who runs the mail room in its Louisville service center, for such jobs as lining up backup carriers for documents and overnight packages. Last month, many utilities drilled field employees who will be stationed at power plants and distribution sites over the New Year holiday on how to use radio and other backup communication systems to deliver vital data that normally flow electronically to command centers.

At first glance, Year 2000 contingency planning looks relatively simple. Many large businesses and other major computer users can start with plans they already have for computer crashes and natural disasters.

Moreover, many actions are minor adjustments. The State of Washington's National Guard plans to mobilize 3,000 soldiers, about half its ground forces, in December to be available to help deal with loss of utilities, water or other essential services or to quell potential civil disorder. The plan is virtually cost free because the same soldiers would otherwise have been reporting for routine training a few weeks later.

Lubbock, Tex., is buying materials for 1,200 stop signs in one order this fall instead of spacing them out through the fiscal year ending Sept. 30, 2000, and is suspending its normal replacement program. "We will have about 800 on hand in case traffic signals don't work Jan.

1 instead of the usual 50 or so, but it won't add to my budget for the year," said Geryl Hart Jr., manager of Lubbock's traffic department.

But experts say Year 2000 contingency planning becomes complicated because the possibilities are more varied than in typical disruptions. Humana's standard 20-page disaster recovery plan for its regional service centers swelled to 66 pages when adapted for Year 2000 problems.

Training, staffing and equipment decision deadlines are also looming for some. Auto makers say they need to settle contingency plans in the next month to take advantage of summer production shutdowns for training. Union contracts require Kaiser Health Plans to make up its mind -- and negotiate next month -- for extra hourly employees it wants on duty for the New Year holiday, according to Deborah Reinhold, director of Kaiser's Year 2000 project.

And McKesson HBOC, the drug distributor based in San Francisco, said it had to make its decision to order eight large backup diesel generators from Caterpillar Inc. by May 5 to get guaranteed installation by the end of the year.

Companies also need to worry about what happens if too many others are thinking about the same backups they expect to use. Take all the companies planning to rent generators. "There's no way in the world our industry could supply the demand that is in the planning stages," said Mark Conrad, United States marketing director for Aggrecko, the Dutch company that owns the world's largest rental fleet of mobile generators.

Howard Rubin, a leading information technology consultant, says some of the toughest planning decisions may lie with key industries like banking and telecommunications that could be flooded with consumer inquiries on Jan. 1 at the slightest sign -- or rumor -- of any glitch. "If those companies are understaffed and callers just get busy signals, it will contribute to panic," he said.

Consultants say a few shortcomings show up repeatedly in plans they see. Many companies, for example, are not ready to confirm and evaluate disruptions quickly.

"When a global company gets a call from Thailand from someone saying the lights went out, how does it rapidly figure out if it's a Y2K problem, how widespread it is, whether it will persist and what others will do?" Rubin asked.

Louis Marcoccio, head of Gartner Group's Year 2000 research program, says another failing is assuming that contingency plans are needed only for the first week of the new year. Gartner estimates that fewer than 10 percent of software failures will show up that quickly.

-- Alexi (Alexi@not-in-the-dark.com), May 27, 1999

Answers

Alexi,

Thanks for posting this!!!

-- GeeGee (GeeGee@madtown.com), May 27, 1999.

Ditto...

I'll see it makes some e-mail list rounds in SV (Silicon Valley).

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), May 27, 1999.

I especially appreciate this since I tried the link and needed a password, which I didn't have. :)

-- GeeGee (GeeGee@madtown.com), May 27, 1999.

GeeGee,

You can sign up to read the NY Times online for no charge. And in my experience you won't get a lot of bothersome e-mail after you sign up.

---Alexi.

-- Alexi (Alexi@not-in-the-dark.com), May 27, 1999.

Also put this article in context with this one...

Venezuela Faces $1.5 Billion Y2K Computer Problem

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 000sW6

And this one...

Japan and dominoes (more on Intel)

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

-- Diane J. Squire (sacredspaces@yahoo.com), May 27, 1999.

Printed a couple copies of this and distributed here @ the office for my polly cohorts. They didn't know ducks "quacked" ?

-- kevin (innxxs@yahoo.com), May 27, 1999.

'As the plans are developed, millions of workers who previously had little exposure to Y2K, as the Year 2000 problem is known, are getting their first good look at how seriously their employers are taking it.'

This is the best chance for a new wave of preparedness. My brother works for Intel. As of December he had not inadvertently (in other words he hadn't been looking into it) seen any concern in the company re: Y2K. I now send him every article I find related to Intel and Y2K.

thanks

-- Shelia (Shelia@active-stream.com), May 27, 1999.