* * * 19990927 Monday

Stan Faryna wrote in another thread:

"Y2K hit us early. Some major clients (international organizations) who upgraded accounting systems of the SAP kind are at 60 and 90 days past due. Other clients depending on sophisticated accounting systems are also having problems. The delays started in April and the duration of the delays have increased, and budgets have also been substantially reduced. Manual work arounds (hand-writing checks) is not happening because "payment is in the system and it will be processed at some unknown date, therefore hand-writing a check would be constitute overpayment." We continue to provide services with continued promises to pay, but this will stop on December 1, 1999 at which time we will only provide continuing services to those who are current and pre-pay."

Question: Any other "small" businesses from this forum experiencing this Y2K "phenomenon" with either new installations/upgrades to the heavily marketed SAP systems?

T-Y2K-S-will-HTF before the end of October! The pent up financial strain--among other factors--bubbles will burst, like opening a beer that has been violently shaken.

Regards, Bob Mangus

* * *

-- Robert Mangus (rmangus1@yahoo.com), September 27, 1999

Answers

Robert, unfortunately we know of small businesses with severe Y2K disconnect. They think their computers are outdated anyway, so they'll wait until 1/3/2000, see if they work. If not, they'll just hop on over to Fry's and buy some new ones. It won't be so easy. Taiwan won't be up to producing enough components. And they're too clueless to look for garbled data. Disaster.

-- Ashton & Leska in Cascadia (allaha@earthlink.net), September 27, 1999.

You apparently missed this thread:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001S2H

-- Mr. X (xxx@xxx.com), September 27, 1999.

This morning on NPR's Morning Edition, they had a short piece on the lack of Y2K preparedness among San Francisco small businesses. Thought of you, Diane.

Listening to that very pleasant-sounding restaurant owner describe her nearly complete lack of knowledge (and action) regarding potential Y2K impacts to her life and business was rather distressing.

-- Mac (sneak@lurk.hid), September 27, 1999.

* * * 19990927 Monday

Mr. X:

No, I didn't miss the Hershey piece. That thread turned into a pi**ing contest about the viability of SAP.

This thread, OTOH, was/is intended to ELICIT FIRST HAND TESTIMONIALS from SMALL BUSINESS(ES) OWNERS AFFECTED DIRECTLY BY _LARGE BUSINESSES_ (as small business customers) that are lagging on their payments and/or orders as a result of poor SAP ( or other?) system implementations.

If a small business has any interest in being paid, they probably would/should know the whys and wherefores of delays that affect their small business(es) CASH FLOW! After all, CASH FLOW--or the lack thereof--will hurt small business(es) quickly, acting as one of the earlier Y2K RED FLAGS!

This may be on avenue to uncover the truth about LARGE BUSINESS Y2K "READINESS." At least small business owners don't have non- disclosure agreements to contend with.

If LARGE BUSINESS CUSTOMERS are not paying, or not able to place orders, due to LARGE systems failures and ineffectual contingency or business continuation plans, the small business(es) could be the virtual "Y2K canary?"

So, small business owners, what are your experiences?

Would you create threads at this forum to report such events?

Any other viable suggestions?

Regards, Bob Mangus

* * *

-- Robert Mangus (rmangus1@yahoo.com), September 27, 1999.

The small company I work for does not have any such problems at the present time that I am aware of.

This is the issue that will put many small businesses into bankruptsy FAST next year.

How do you tell who is a good risk? How and when do you decide to cut off service to an old customer? How will that effect your chances of ever getting paid?

Been there, done that, even without Y2K. It will get ugly.

-- Jon Williamson (jwilliamson003@sprintmail.com), September 27, 1999.

Robert,

I agree that the Y2K-related accounting problems of big organizations that are causing some anguish to the small businesses that service them *is* a red flag. In general, many small businesses depend on cash and lack the kind of track record and substantial assets to get the kind of financing that larger businesses can obtain. So I don't know if smaller businesses are the Y2K cannaries as most larger businesses have financing options and influence in relationships with service providers.

Interestingly, the first time we saw this kind of accounting upgrade problem was at the end of 1997 when we did a marketing study for a company with a practically household name. It took six months for them to pay. This was at the start of our doing business, but we survived it. We cut off the relationship though they wanted to follow up with three more studies. We chocked it up to the relative inexperience of that particular company compared to other clients we were pursuing.

Actually, we do have confidentiality agreements with our clients and my posts may be construed as problematic. Already, some of my posts have been argued to be minorly problematic by our clients. I'm willing to take some what of a chance, because I agree that there is insight to be gained from anecdotes-- however much mystery seems to shroud my or other's anecdotes. Still you can all do me a great favor and not try to guess who our clients are-- at least not out loud for all to see.

Back to the point: yes, I think that SAP or other minor disruptions that do not threaten business continuity of larger organizations will impact smaller businesses that serve them. If the latest Cap Gemini survey is accurate in forecasting that 44% of large organizations will not fully remediate mission critical systems by year's end, we might expect that the smaller businesses serving them are in for rough times and may not survive the Y2K shake-out (before or after the rollover).

In a previous thread, Flint said straight out that all those shaken out of their small businesses would not add to unemployment numbers in the long term... that they'd all go on to better paying and more secure jobs. I don't think Flint is right about this and I am concerned that the numbers of those shaken out will be so significant that (1) they will not quickly find work in what now seems an over crowded employmee market and (2) this will have economic consequences.

The other point: IF we assume that (a) accounting systems are mission critical and (b) that disruptions in unremediated and remediated accounting systems at large organizations are happening and will happen before, during, and after the rollover, THEN should we also assume that mission critical systems at 44% of the large organizations have been, are being, may be disrupted for 30 to 90 days? I think the risk is evident and serious. However, I'm reluctant to go to unknown territories and positively state that any such correlation spells catastrophe.

So long as there is no public or business run on banks, financing will be available to large organizations and organizations associated with the infrastructure. So long as there is money, there is no kill off of these companies critical to technological and economic infrastructure. And forecasting kill off is how I read your metaphor of the canary. So the canary may only be a decent forecaster to the kill off of smaller businesses lacking financing options, reserve capital, and viability.

Sincerely, Stan Faryna

-- Stan Faryna (faryna@groupmail.com), September 27, 1999.

* * * 19990927 Monday

Stan:

No "customer" names need be mentioned!

Y2K "canaries" ( vendors ) are already dropping around the City of Detroit. In the WDIV-TV (NBC, Detroit) I-TEAM August 3d report, they stated that many of the ~5,000 vendors to the City of Detroit have been forced out of business.

Granted, it sounded like these "victims" had all of their "eggs" in the City of Detroit basket. A stupid, but common, folly by many businesses. But who woulda' EVER thunk that the City of Detroit wouldn't be able to pay up from April through August 1999?!? Pollys that didn't think or know that Y2K would create such situations. That's who!

It sounds like a real paranoid stretch for any enterprise to construe any posts about _un-named_ enterprises not being able to pay thier bills or place their orders as breaching any form of non-disclosure agreement.

Regards, Bob Mangus

* * *

-- Robert Mangus (rmangus1@yahoo.com), September 27, 1999.