An excerpt from the final report of the President's Council on Year 2000 Conversion.

http://www.y2k.gov/docs/LASTREP3.htm

RETROSPECTIVE ON THE MAGNITUDE OF THE PROBLEM

There is general agreement that the Year 2000 rollover went more smoothly than expected. The incredible success of the transition has prompted a number of questions about the effort and the results it produced.

Was Y2K an insignificant, over-hyped problem?

In the weeks since the rollover, some have expressed doubt about the magnitude of the Y2K problem and whether or not the significant investment of time and money to avoid disruptions was necessary. However, it has been difficult to find executives who worked on Y2K in a major bank, financial institution, telephone company, electric power company or airline who believe that they did not confront -- and avoid -- a major risk of systemic failure.

 

One indication of the difficulty of the Y2K problem is the fact that many large, sophisticated users of information technology revealed in regular filings with the Securities and Exchange Commission that they had been required to increase the funds allocated to their Y2K programs. These increases, which in some cases were in the hundreds of millions of dollars, were not for public relations purposes. Rather, they reflected the difficult effort of remediating large, complicated and often antiquated IT systems.

The Federal Government experienced a similar phenomenon. Cumulative agency estimates for the costs to solve the Y2K problem increased over four years from under $3 billion to the $8.5 billion that was actually spent. This was still significantly less than the $20 to $30 billion estimated by outsiders. But here too, the job of ensuring Y2K compliance proved to be more challenging than initially expected.

The range of actual failures during the January 1 and February 29 (Leap Day) rollovers served as a reminder of the major economic and operating disruptions that had been avoided by the development of Y2K compliant IT systems:

• A classified Defense Department intelligence satellite system was totally inoperable for several hours during the rollover period. The problem originated not in the satellite itself but in the ground-based switching and software equipment used to download and process information from the satellite.

• Bank credit card companies identified a Y2K-glitch involving some credit card transactions. Merchants that did not make use of free upgrades provided during 1999 for a particular software package charged customers for orders every day after a single purchase was made. The problem affected primarily smaller retailers since most major retailers use their own customized software.

• A Y2K computer glitch at a Chicago-area bank temporarily interrupted electronic Medicare payments to some hospitals and other health care providers. As a work- around, Medicare contractors -- private insurance companies that process and pay Medicare claims - were forced to send diskettes containing processed claims to the bank by courier or Federal Express so that the payments could be made in a timely manner.

• Florida and Kentucky unemployment insurance benefit systems encountered a Y2K glitch in an automated telephone call processing system. The Y2K glitch in customized code prevented some claimants from claiming earned income for the week ending 01/01/2000. Claimants reporting the problem had to be given an alternative means for filing their claims pursuant to State contingency plans.

• Low-level Windshear Alert Systems (LLWAS) failed at New York, Tampa, Denver, Atlanta, Orlando, Chicago O'Hare and St. Louis airports during the date rollover. The systems displayed an error message. Air transportation system specialists at each site were forced to reboot LLWAS computers to clear the error. Fortunately, the weather was mild across the United States.

• Seven nuclear power plant licensees reported problems with plant computer systems used for supporting physical plant access control, monitoring operating data, and calculating meteorological data. The affected systems did not have an impact on the safety of operations at the plants.

• During the Leap Day rollover, several hotels reportedly were unable to issue room keys to guests because of a failure in hotel key-producing software.

• The Council Chair, traveling in March, received a car rental contract that included a $10 daily charge as an underage driver since the software indicated he was born in 2039.

These and other glitches would have been more serious had they occurred in an environment in which a wide range of other Y2K problems had also surfaced. If there had been a flurry of other difficulties, some glitches would have gone undetected for a longer period of time. Glitches also could have had a multiplier effect by creating problems through interfaces to other systems or could have resulted in a gradual degradation of service. As it happened, organizations were able to focus all of their attention on the relatively few problems that did occur, which resulted in much faster restoration of normal operations.

Some of the failed expectations about more serious Y2K problems can be traced to the skepticism and disbelief with which some people greeted company and government progress reports on Y2K, believing that these institutions were inevitably covering up the possibilities of major Y2K failures. However, as the Council noted on numerous occasions, individuals in positions of responsibility who were claiming success in their Y2K efforts would be easily found after January 1, and held accountable, if subsequent system failures proved that they had misrepresented the facts. But many people continued to assume the worst would materialize even as much of the self-reporting pointed to a fairly orderly transition into the new millennium.

Why weren't there more Y2K-related problems abroad, especially in less-developed nations?

Some of those who have discounted, after the fact, the significance of the Y2K threat point to the relative lack of major disruptions abroad as evidence of how exaggerated the problem was. How did countries that appeared to have spent so little, and were thought to be relatively unprepared, emerge unscathed?

A number of factors created the mismatch between perception about the Y2K readiness of foreign countries and the actual outcome. Chief among them was the difficulty in obtaining accurate status reports internationally on a fast moving issue such as Y2K. Information three months old was out of date, and much of the international information reported was second hand and anecdotal. But, in many cases, this was the best information available until countries began to report more publicly on their Y2K work. Without more current, detailed reports, people often relied on such older information and were then surprised when it was overtaken by subsequent progress. A report about risks from April or June 1999 was assumed to still be operative in December.

A related problem was the stereotype of countries doing nothing to prepare for Y2K. While this was probably true for three-quarters of the countries in the world in early 1998, by mid-1999 virtually every country had a Y2K program in place and was devoting a high level of attention to the problem. In many cases, the fact that some countries may have spent the bulk of their funds in a concentrated effort the last six to nine months of 1999 was largely ignored. For some commentators, therefore, it has been easier to suggest that the problem was overstated rather than to consider the possibility that perceptions before the rollover were inaccurate.

Additionally, outside of the world's largest users of information technology B countries like the United States, Canada, Japan, and the United Kingdom -- the reliance upon IT drops off quickly. In many of these less IT-dependent countries, other factors also made for an easier transition into the Year 2000. Fixes in these countries were frequently more straightforward than in the United States since the technology being used was more likely to be "off the shelf," and not customized. Also, unlike the United States, countries such as Spain and Italy that had moved into IT more recently were not saddled with old legacy systems that were built with antiquated, customized code by people who had long since retired.

Countries starting later also had the benefit of lessons learned by those who had been working on Y2K for several years. The sharing of technical information about problems, products, fixes and testing techniques that was encouraged by international organizations and the Council paid enormous dividends. Elevators provide a good example. In 1998, everyone was testing to see if elevator-specific systems had a Y2K problem. Once it became clear that they did not, no one else had to spend time and money pursuing the issue. Similar experiences took place in industries such as banking, finance, telecommunications, air traffic and electric power where information was being exchanged and shared globally in a way never seen before. And in many industries, large multi-national companies actually worked directly with their local counterparts and host countries to fix basic systems.

 

Finally, technology itself helped countries that had gotten a late start on Y2K. One the reasons those that started late spent less on their Year 2000 efforts was that the technology to fix the problem improved dramatically. By 1999, automated tools could fix millions of lines of code quickly and at a dramatically lower cost than was possible just two years earlier. This technology helped late-starting countries to fix the problem quickly - and more cheaply.

Why weren't there more problems among small businesses?

Small business was another area about which many, including the Council, had expressed concerns. While there were relatively few reports of Y2K-related failures among small businesses, for firms large and small, there is a natural inclination not to report problems that are fixed in very short time frames. This phenomenon was revealed before the rollover when surveys showed that over 70 percent of companies reported they had experienced Y2K glitches, even though the public was unaware of virtually all of them. Some said the number of failures indicated the pervasive nature of the Y2K problem. The Council believed that the experience of companies with Y2K failures before January 1, 2000 also demonstrated that most Y2K problems could be fixed without people being inconvenienced or even knowing that anything had happened.

The lack of information about how small businesses were doing was an ongoing challenge for the Council and others following Y2K. The sheer number of these companies - over 23 million - and the absence of regular reporting relationships that made it difficult to gather information on the progress of small businesses prior to January 1, also made it difficult to determine how many actually experienced Y2K difficulties after the date change.

What happened to fears of overreaction by the public?

While a very small, but visible, minority engaged in excessive stockpiling of goods in advance of the New Year, most Americans took Y2K in stride. Anxiety about the date change, which seemed to peak in 1998, declined throughout 1999 as more and more information became available about organizations that were completing their Y2K work. By the end of the year, there was very little evidence of overreaction among the general public to the potential consequences of Y2K.

The availability of information - both positive and negative -- about Y2K efforts played a major role in reversing the trend toward overreaction. The Council's position was that people are more inclined to panic when they lack information, which can lead to a general feeling that the system is out of control. But, given the facts, whatever they are, people have great common sense and will respond appropriately. Even when the information about industry and government Y2K efforts revealed that there was still substantial work left to do, people were not alarmed. Instead, they seemed reassured in the knowledge that organizations were treating the problem seriously, were working together to solve it, and would keep the public informed about their progress. Americans knew Y2K was an important problem, but they also knew that organizations were spending large amounts of time and money to minimize any difficulties that could have been created by the date change.

Was the money well spent?

In hindsight, it is always easy to see what was not a problem and say that less money could have been spent. It's a little like saying you could have saved money spent on building safer roads when fewer accidents occur. But part of the reason for the smooth transition, in the face of thoughtful analyses noting that IT projects generally finish late and over budget with remediation work creating errors as well as removing them, was that people did test, retest, and then test their systems once again. Never before had so much independent verification and validation been done for IT work -- and it showed in the positive results and the on-time performance.

Ultimately each organization had to make its own judgement about the potential implications of failures and the appropriate cost necessary to minimize such problems. Any organization that cut back on its work to save money and subsequently experienced serious system failures would have been pilloried as badly managed and foolish.

-- (y2k@news.hound), April 05, 2000

Answers

Thanks, newhound. Reading the last sentence, I believe having all those lawyers waiting in the wings undoubtedly sped progress, too!

-- viewer (justp@ssing.by), April 05, 2000.

As strange as it may seem, I just recieved a bill in the mail yesterday, stating that I owe for medical treatment recieved on Jan 18th, 1901. The Y2K problem was really there, and it could have been a disaster if not for all the time and money invested to cure it. The problems that we face today are far more serious, but no-one seems to realize what is about to happen. It seems like our President is trying everything possible to start WW-3!. Mankind don't know how close he is to extinction!. Any of you guys know what a "Nuclear Winter" is?. Well here is something that might interest you, http://www.cooperativeindividualism.org/sagan_nuclear_winter.html This can be caused by a nuclear war, volcanic eruptions, or asteroid impacts. The chances of one of the above occuring over the next few years is around 97%. So it looks like we aren't out of the woods yet!. Cheers, HH

-- Thr Happy Hoarder (bright28555@yahoo.com), November 02, 2002.