http://biz.yahoo.com/prnews/990618/ny_cio_y2k_1.html

Y2K Experts Poll: Big Business Is Not Ready for the Millennium Date Change Today

CIO Magazine, ISACA, & Dr. Ed Yardeni's Y2K Center Poll Reveals What Executives Don't Know About the Year 2000 Problem

NEW YORK, June 18 /PRNewswire/ -- A new poll, conducted by CIO magazine, ISACA, and Dr. Ed Yardeni's Y2K Center reveals corporate confidence is on the upswing with more and more Y2K project managers coming around the bend towards Year 2000 readiness. However, this does not mean large corporations -- domestic or international - can relax, or that anticipation of potential disaster is unfounded. According to noted economic forecaster and Y2K expert Dr. Ed Yardeni, ``The good news is 82% of our respondents now believe Y2K will have little impact on their companies. The bad news is they may not realize how few of them are actually ready today with so little time left.''

The Y2K Experts Poll is a real time snapshot of Y2K readiness among global, large firms with an average of 1,300 suppliers. The poll was developed and deployed by an informal public-interest coalition of CIO magazine, the Information Systems Audit and Control Association (ISACA), and Dr. Ed Yardeni's Y2K Center. Many computer systems, now set up to read years by their last two digits, will lose track of dates when the year 1999 turns to 2000 if the systems are not reprogrammed before the turn of the century. The coalition members conducted the poll among Y2K experts in an effort to help the public and their policy officials assess the Year 2000 readiness of organizations around the world.

Highlights of the Poll:

The electronic survey addresses Y2K corporate issues of readiness, confidence, third-party failures, contingency planning, legal issues, economic impact, and the personal at-home actions of executives close to the Y2K remediation process. A closer look uncovers some red flags for corporations, suppliers, and the general public.

Demographics: Respondents are primarily from large, U.S.-based (55%) and global firms (20%) with 61% reporting more than 1,000 employees. The majority of participants are from the financial sector (26%), followed by manufacturing (17%), government (9%), and healthcare (5%). They represent roughly a three- way split among information technology (IT) executives, finance executives, and corporate management. According to Yardeni, ``The results are skewed toward finance, an industry we've expected to make good progress. It's a good sign our expectations are being met by the financial sector. If they were not in good shape at this point it would be a major warning about other industries' ability to complete their Y2K projects.''

Y2K Project Completion: The poll's findings include the good news that 1999 Y2K project completion is moving along well, with 72% reporting that are more than three-quarters complete. But, 92% of responding companies have not actually completed their Y2K work - and one in ten will not complete Y2K project work until well into the year 2,000. Furthermore, of those companies still working on completing their work, 33% are behind their schedule. Observes Gary Beach, Publisher CIO magazine, ``Keep in mind these are huge firms with lots of time and resources to focus on Y2K, I am concerned that 92% have not completed their work seven months out from the hard-wall deadline. The question is in what direction are they trending -- more behind or catching up? If a significant number of major companies are lagging, what does that say for small business? Nowhere have I seen data, until this poll, that quantifies the percent of large firms who have confessed they will not make the turn of the century deadline!''

Contingency Planning: The survey suggests there is widespread blind faith among Y2K experts that suppliers will be ready. Some large firms are preparing contingency plans based on back up and substitutions. ``Perhaps, this is a 'better safe than sorry' mentality among Y2K experts,'' says Dr. Yardeni. In spite of preparing the plans, only 30% of companies are presently implementing plans. The poll also finds 50% of companies without a formal plan and/or still in the process of creating one. This group's contingency planning does not include significant stockpiling of inventories (i.e., materials, supplies or products). Thirty-four percent of companies are not stockpiling, followed by 19% of companies preparing with two to seven days of extra inventory.

Mission-Critical Software: Interestingly, there is a disconnect between readiness confidence levels and the reality of waiting for mission critical software from suppliers. Thirty-five percent of large firms say they are still waiting for mission-critical software to be delivered by their suppliers. In addition, Beach notes, ``It is unbelievable at this stage of the game that large firms are expecting 5% of their mission-critical software to fail or malfunction.''

Supply Chain: Only 12% of large companies, with an average of 1,300 vendors, are actually verifying their business partners' Y2K readiness by conducting on-site visits. The majority of companies are simply sending out questionnaires to partners (68%). ``I don't think companies are taking the danger of supplier failure seriously enough. My concern is how the supply chain, which is heavily interconnected, will be affected by incomplete or no delivery of mission-critical software and Y2K compliance. They are relying heavily on trust. Companies are more rigorous when it comes to executing routine legal contracts. In this case, we are talking about the potential for serious business impact,'' says Beach.

Legal Considerations: Legal issues are a concern for 63% of the respondent group. However, more than half feel that lawsuits against their organization are unlikely. Surprisingly, when asked if legal considerations are affecting their ability to publicly share information about Y2K, 25% of those surveyed say they are in better shape than their lawyers will permit them to state.

Personal Perspectives: The final phase of the survey probes Y2K experts' personal perspectives on the computer technology problem. Of note, 61% of respondents are expecting something short of a natural disaster like a hurricane and 41% of these experts are preparing for it (predominantly stocking up to one week of food). In addition, the survey asked about the likely personal and economic impacts of Y2K on the respondents. Generally, the group expected minor disruptions for a few days or a couple of weeks, without much influence on their stock investments. ``I'm glad to see that large company Y2K managers are optimistic, but their complacency could backfire if they don't properly assess the weak links in their supply chains and prepare appropriate contingency plans,'' concludes Dr. Yardeni.

Y2K Experts Poll Background and Methodology: The first Y2K Experts Poll reached men and women on the frontlines of Y2K remediation, testing, auditing and contingency planning. CIO magazine invited 10,000 chief information officers (CIOs) and other high-level executives from its subscriber list to participate; ISACA invited 18,000 of its worldwide members. Conducted online June 9 through June 16, 1999, the poll closed with a final, qualified sample size of 892 respondents. An email invitation from the three coalition members asked recipients to participate only if they were professionally and actively involved in Y2K projects. Respondents linked to the electronic polling form from the email solicitation. A second Y2K Experts Poll is planned for September 1999, 90 days from the turn of the century. Results from the first poll will be used as a benchmark to trend data from future polls.

About the Y2K Experts Poll Coalition Members: CIO Communications, Inc. was formed in 1987 to help chief information officers (CIOs), information technology (IT) executives and other senior management executives succeed in their enterprises through the use of information technology. The company publishes CIO magazine, a publication of International Data Group (IDG). Dr. Ed Yardeni's Y2K Center is a public service of the Chief Economist of Deutsche Bank Securities. ISACA is a recognized global leader in Information Technology (IT) governance, control and assurance with more than 20,000 members in 100 countries.

EDITORS' NOTE: Complete findings, as well as visual documentation, from the June 1999 Y2K Experts Poll are available at http://www.peoplepolls.com/resultssecurity.asp?surveyid=4&user=forum. Photo of Dr. Ed Yardeni is available at www.yardeni.com/bio.html. Photo of Mr. Beach is available at http://www.cio.com/marketing/releases/photos.html.

-- Mr. Decker (kcdecker@worldnet.att.net), June 18, 1999

Answers

Thanks for the link.

Okay, let me save us some trouble. Doomer responses can be summed up as, "See, it's the end of the world!" Polly responses can be summed up as, "See, no problem!" So, on to the next thread.... :-)

-- Lane Core Jr. (elcore@sgi.net), June 18, 1999.

Thank You Mr. Decker

CIO magazine is one of the better "Big Picture" information sources. May I recommend the following articles. A bit dated but informitive.

The Ripple Effect - SUPPLY CHAIN MANAGEMENT - CIO Magazine Winter / Spring 1999

 Test Patterns - REALITY CHECK - CIO Magazine Winter / Spring 1999

  Checking the Chips - YEAR 2000 CHALLENGE - CIO Magazine September 1, 1998

  Rush Hour - REMEDIATION STRATEGIES - CIO Magazine Winter / Spring 1999

 Koskinen Interview with the Czar - FEDERAL GOVERNMENT - CIO Magazine Winter / Spring 1999

-- Brian (imager@home.com), June 18, 1999.

Quoting from above: Y2K Experts Poll Background and Methodology:....CIO magazine invited 10,000 chief information officers (CIOs) and other high-level executives from its subscriber list to participate; ISACA invited 18,000 of its worldwide members. Conducted online June 9 through June 16, 1999, the poll closed with a final, qualified sample size of 892 respondents. Unquote

Okay, somebody correct me if I'm wrong, but is CIO magazine saying that the respondent sample self-selected themselves? And that the final response rate was around 3% of the group contacted?

I used to do surveys; I'd be laughed out of the office for such methodology. Make your own evaluations, but in my opinion the "evidence" presented here is at best anecdotal, at worst misleading. One might speculate that the other 97% is either too busy to respond, playing their cards close to the chest for legal reasons, or hiding something.

Comments?

William Cheek in Dallas

-- William Cheek (bcheek@onramp.net), June 18, 1999.

excerpt from George Norwell's 2084:

"Pollies are doomers; doomers are Pollies"

"denial is acceptance..."

"freedom is dangerous"

"foresight is a crime."

"In the crowd is safety.."

"Facts can change based on the need for Truth." etc.

-- walterskold (wskold@lazrus.org), June 18, 1999.

No, Decker, this is way too pessimistic -- NORM would never have posted it. You have to look harder for good Y2K news. (Hint: stay away from any headline that talks about sewage. Bad, bad news there. Very bad.)

But, like NORM, you refrained from any commentary. Bless your heart. Your grandpa would be proud.

-- King of Spain (madrid@aol.com), June 18, 1999.

William,

Read the methodology section again, please. It also says:

"An email invitation from the three coalition members asked recipients to participate ONLY if they were professionally and actively involved in Y2K projects."

Clearly, the 892 qualified respondents were just that, QUALIFIED (i.e., experienced, informed, worth questioning regarding their conclusions).

Respectfully,

-- M.C. Hicks (mhicks@greenwich.com), June 18, 1999.

"But, 92% of responding companies have not actually completed their Y2K work - and one in ten will not complete Y2K project work until well into the year 2,000. Furthermore, of those companies still working on completing their work, 33% are behind their schedule. "

That says it all for me. 6 months to go and only 8% are done? 30% are behind schedule and 10% KNOW they won't finish until after 2000? So much for Y2K being a 'bump in the road'.

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), June 18, 1999.

MC--

Thanks for your comments. My concern is not that the respondents were not qualified to answer, but that they were only 3% of the total asked to respond. A sample size of 800 responses will give you excellent, statistically sound numbers from which to predict the behavior of a much larger universe--if they are *randomly selected* from that universe of professionally qualified y2k experts.

With a random selection of y2k experts, you could reasonably expect that the "72% reporting that they are more than three-quarters complete" reflected a universe where roughly 72% of all the shops were three-quarters done. But the "3% self-selected" nature of the sample skews the results--in what direction, we don't know.

All one can accurately say from the above statement is that 72% of 892 y2k experts willing to answer questions (642 experts) are 3/4ths done. That's it. 642 shops are 3/4ths done.

It says nothing about the readiness of the larger universe of "global, large firms." But that is what they are implying in their article.

In my opinion, it's not sound information, it's anecdote, and misleading anecdote at that.

But that's just my opinion. I could be wrong.

William Cheek in Dallas

-- William Cheek (bcheek@onramp.net), June 18, 1999.

Walterskold,

Outstanding post!

Regards,

Will

-- Will Huett (willhuett@usa.net), June 18, 1999.

William Cheek is correct. A self-selected 3% sample is not representative of a larger universe, it must be random sampling. It only means 3% were willing to answer. What motivated them to answer is only a guess. This is anecdotal evidence.

Leslie, who has studied statistics.

-- Leslie (***@***.net), June 18, 1999.

Those polled were IT managers - the same ones we've suspected all along of stacking SEC disclosures, spinning progress reports, and being "irrationally exuberant" about the whole y2k mess. What did you expect them to say?

-- a (a@a.a), June 18, 1999.

I think Lane Core is on the right track here.

Every time *any* survey result is published, those who like the results cite the survey as a 'fact', and those who don't suddenly become experts on statistics and survey methodology. Happens every time. And yes, this survey is just as meaningless as all the rest.

-- Flint (flintc@mindspring.com), June 18, 1999.

A key quote from the article...

Y2K Project Completion: The poll's findings include the good news that 1999 Y2K project completion is moving along well, with 72% reporting that are more than three-quarters complete. But, 92% of responding companies have not actually completed their Y2K work - and one in ten will not complete Y2K project work until well into the year 2,000. Furthermore, of those companies still working on completing their work, 33% are behind their schedule.

-- Linkmeister (link@librarian.edu), June 19, 1999.

I respect Dr. Yardeni's work, but I have to agree with Flint and others on the general meaninglessness of this survey: sample size too small and unscientific; too much reliance on self-reported "data," estimates, and projections; and way too much room for readers to interpret/spin the survey's "results" according to their own prior conceptions.

-- Don Florence (dflorence@zianet.com), June 19, 1999.