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Winter Journal

Volume 31, Issue 4

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What is the Problem?
Basically the problem is very simple to understand. In the 1960s and 1970s when computers were first emerging on the business scene, computer programmers had very limited system memory and capacity available to them. This necessitated using a form of short-hand wherever possible to reduce the size of the computer program being written.

One of the most logical and easiest forms of short-hand that everyone was already familiar with was to drop the "19" from "1967" and just enter "67". In these early days, computers were used for information tracking and large calculations. The data would be manipulated in a variety of ways, and then printed out in large reports that would be interpreted by company staff. The thought that the day would come when computers would be intelligent enough to do data analysis was not yet imagined.

In addition, the notion that programs built in the 1960's and 1970's would still be running almost 30 years later was inconceivable. Thus there was no need to be concerned about only using 2 digits to capture the date. All of these systems would be replaced long before it became an issue.

The Year 2000 problem is not just restricted to technology. It is present anywhere the year is captured in the form of 2 digits instead of 4. (i.e.: your cheque book or preprinted invoices!) Using only two digits to represent the year has been programmed into all of us. Spend the next 30 days trying to automatically write the date beside your signature as dd/mm/yyyy and see just how deeply embedded it is for you. Typically you will find it takes a conscious effort to articulate the year as 4 digits not 2. (we go through this every January when just the last digit changes, imagine how tough it will be to change all 4 digits in 2000!)
How Big Is The Risk?

Millions of people around the world are working furiously to fix the problem in time. Unfortunately some of the hard business decisions they must make (repair, replace, or retire systems you depend on) may have tremendous impact on your business.

For ease of understanding, think of every computer system as being comprised of three layers of technology that produce the functionality you see on the computer screen.

1. The hardware layer. Hardware is comprised of the actual physical box and all of the computer chips that are inside it.

2. The operating system layer. This is the software that makes the hardware work. For our purposes some common operating systems could be UNIX, Novell, Windows, NT, MVS, OS/390 etc.

3. The business software layer. For example, LOTUS 1-2-3, MS Office, Finance and Accounting software, automated manufacturing software, payroll systems, custom developed applications etc.

Only the third layer (your business software) is within your control. Computers typically come preloaded with operating system software. While you can of course, choose the operating system software you would like, it is most often dictated by your existing systems, and whether your third layer business software will still work if you change to a new second layer operating system. Suffice to say that all three of these layers must be able to work together smoothly.

While the hardware layer may indeed be "fine today", the massive changes to operating system and business software layers that will occur over the next few years means in late 1999 you may find your Year 2000 compliant computer is unable to run the new compliant version of your operating system or business layer software.

Be very careful when buying new systems as tremendous bargains on non-compliant hardware and software will become the norm as vendors try to clear their shelves before the end of 1999.

Manufacturers are being very careful about which products they will provide support for through the millenium change. At this time, if you ask for a written free replacement guarantee you will typically find the manufacturer unwilling to comply. If you do get a written guarantee, remember, a guarantee is only good as long as the company is alive and willing to stand behind it. Beware of unscrupulous vendors cashing in on the Year 2000 frenzy.

In our opinion the risk that you will have some form of Year 2000 problem is 100 percent, because no matter how hard you try, or how good you are, you are going to miss something!

Your Company Could Fail if:

1. You need to spend massive amounts of capital $ to replace aging equipment that will not survive the millenium change, and you cannot get financing for the upgrades required;

2. A parts supplier or other business partner you are reliant on does not fix their Year 2000 problem in time;

3. The business software you use is not compliant, and the software vendor has decided to retire the product rather than fix it;

4. You need to replace your business software necessitating extensive workflow process changes and staff retraining;

5. Damage suits are filed by partner companies reliant on your reaching Year 2000 readiness in time for them to implement and test changes, not just by December 1999;

6. You thought your "all risk" insurance coverage meant Year 2000 problems were covered, and found out too late that Year 2000 problems are typically not insurable;

7. The company owner or Board of Directors feel either the risk is too high, or market share cannot be maintained and decide to close shop or radically change company direction before 2000;

8. A salesman was wrong when they "guaranteed" that their product would either solve your problems or be ready in time;

9. Your Information Technology manager was wrong when they assured you everything was under control;

10. Your salary costs increase dramatically as key staff are offered incredible salaries by competing companies;

11. You are forced to offer "Golden Handcuffs" to key staff in order to ensure they remain in your employ through the crisis period;

12. You are forced to entice previously retired staff back to help with Year 2000 fixes at unbelievable salaries;

13. Your major client is unsuccessful in his Year 2000 efforts and goes bankrupt resulting in a significant loss in sales.

14. Lack of appropriate action violates Corporate "Duty of Care ".

There's More?

Even if you are successful in navigating Jan. 1, 2000 there may be some surprises waiting for you on the other side:

1. After a few years of receiving abnormally high salaries due to the artificial Year 2000 supply vs demand problem, employee and union problems will likely occur when you try to bring salaries back to normal levels (often 25 percent to 50 percent lower);

2. Other workers will be extremely disgruntled by the apparent rewarding of technical staff with higher salaries as a result of what appears to be a stupid oversight on their part.

3. Both legitimate and frivolous damage suits by other companies;

4. Unexpected extremely high costs for representation by, or just "advice" from lawyers, insurance adjusters, accountants, architects, not to mention Year 2000, tax and technology experts;

5. Corporate impacts resulting from a major downturn in the global economy;

6. Lack of adequate insurance coverage you were sure you had.

Plan for the worst...
Pray it never happens.

The number one mistake in almost all Year 2000 efforts is to rely too heavily on success and therefore not spend time developing contingency plans for essential business functions.

The first step is to answer the following key questions.

1. What business functions do I have, which ones are critical to corporate survival, and what information systems are necessary to each business function?

2. Can I clearly map the information systems to the business functions they support, or are there hidden interdependencies that I am unaware of?

3. Using a 5 year timeline, what are the future plans for each business function and system?

4. What equipment or software must be replaced, how much will it cost and how long will it take?

5. Which other companies or individuals are reliant on me?

6. Where will I get the money to address this problem?

7. If my efforts to fix the problem fail, how can I prepare to survive a minimum of 3 to 6 months?

The Bottom Line

Contingency Planning for Year 2000 is entirely different than normal Business Continuity Planning. Be sure to obtain Year 2000 specific contingency training & get started immediately!

The Year 2000 problem may also appear in any piece of equipment with embedded computer chips. For example,

  • Intelligent buildings & security systems
  • Maintenance over-ride systems
  • Hydro-electric power plants
  • Most credit card terminals
  • 911 emergency services
  • Automated manufacturing & inventory systems
  • Transportation & communication systems.


Betsy Sayers, CBCP, has over 17 years experience in Information Technology procurement, Data Centre performance analysis, Business Continuity and Informatics Disaster Recovery. She is the founding President of the Sayers Recovery Group Inc. She can be reached at (613) 834-4797 or at sayers.recovery @sympatico.ca .