Small Businesses Claim They are Prepared for Y2K : LUSENET : TimeBomb 2000 (Y2000) : One Thread


IRVINE, Calif. (BUSINESS WIRE) - Small businesses indicate they are prepared for the Y2K bug according to a recent national survey of Information Technology (IT) decision makers conducted by Sage Software Inc. (, a leading provider of business accounting software solutions.

Survey results reveal that 55% of small businesses have already fixed the problem and 38% are currently working on a fix. Staffing and costs are also being contained -- on average each small business will allocate $16,600 toward Y2K mitigation.

The survey results indicate that small business managers do not see the same dire outcome predicted in a recent report by Congress, which estimates that 750,000 small businesses are at risk of temporary shutdown or significant financial loss, and that Y2K could affect as many as 4.75 million small businesses nationwide.

Balancing the Y2K Books

According to the Sage Software Small Business Y2K Survey, the small business IT community, including companies with or without budgets in place, anticipates costs of $16,600 to fix the Y2K bug. This estimate includes the costs of internal and external employees, software and hardware fixes, and overall company support. This group of professionals also said roughly three quarters of that estimate, or $12,400, has already been spent.

Of those companies with a firm budget in place, the cost estimate to battle the Y2K bug jumps to the tune of $35,400. Of that number, those fiscally minded small businesses say $24,400 has already been spent. Brewing with confidence, 90% of small businesses surveyed said they would not exceed their budget, 5% said their budget would be surpassed and the final 5% said they "don't know." These same companies said 10% of their 1999 IT fiscal budget is dedicated to fixing the Y2K bug.

Small businesses lacking a Y2K budget perceive lighter costs for the Y2K bug and expect to spend $11,500 on mitigating the problem. However, results show that they are either on the verge of fixing the problem, or on the brink of being over their loose-cost estimate. On average, roughly $9,100 has been spent -- more than 90% of their entire Y2K cost estimate.

"Our survey results reveal a concerned small business community, which is acting responsibly in its efforts to combat the Y2K problem," said Dave Butler, Sage Software chief operating officer. "It also appears that Y2K repair costs, once expected to cripple the small business market, are being kept in check."

When asked if the costs associated with the Y2K problem are "surprising," only 13% responded affirmatively, while 87% said they were "not surprised at all." Eighty percent of the respondents went on to say that the costs were "expected." Ten percent of those surveyed said costs were "higher than expected" and the final 10% said they were "lower than expected."

Blank Check From Management

Despite their attention to detail on tracking costs, a resounding 79% of small business IT decision makers indicated they do not have a budget in place to fix the Y2K problem. When asked if they would have developed a Y2K budget if they were to do their planning all over again, 79% of the IT decision makers said no.

When pressed about why they do not have a Y2K budget in place, 48% of the Sage Software Small Business Y2K Survey respondents said they either "have an open budget from management" or "do not have an IT budget." Twenty-seven percent said they "already fixed the problem" and 5% said they "haven't got around to it."

Staffing Up

Small businesses appear to have a hold on Y2K staffing. On average, three internal employees are being used to fix the problem. Fifty-two percent of those surveyed said they will use "a combination of internal employees and outside consultants," while 30% of IT decision makers said they would use "only internal employees" and 18% indicated they would use "only outside consultants."

Small Business Universe

"Small business continues to be the backbone of the American economy," said Butler. "Much has been said about large companies in relation to Y2K compliance. However, the frequency of small companies dwarfs that of large companies. Their effort to quash the Y2K problem is critical."

Sage Small Business Y2K Survey

The Sage Small Business Y2K Survey, conducted jointly between Sage Software and Ontario, Calif.-based Fairfax Research Group, is based on responses from 200 small businesses across the nation with between 10 and 500 employees. Respondents included MIS vice presidents, MIS directors, MIS managers, chief information officers, systems managers and analysts, and other positions responsible for IT decision making. Results reflect an accuracy of +/- 6%.

With headquarters in Irvine, Sage Software is a wholly owned subsidiary of the Sage Group plc, the world leaders in PC accounting software. In February 1999, the Sage Group plc acquired Atlanta-based Peachtree Software, now part of Sage Software. The company markets four major accounting software packages.

For larger companies of up to 1,000 employees, the company develops and markets award-winning Acuity Financials, a 32-bit client/server accounting software application optimized for the Microsoft Windows NT/SQL Server platform. Sage's MAS 90 accounting software runs under a number of operating systems and offers a broad range of applications for medium-sized businesses.

BusinessWorks(R) accounting software is for small businesses that have outgrown off-the-shelf accounting packages and require a more powerful yet intuitive small business accounting solution. Peachtree Software has great strength as an off-the-shelf accounting solution for small businesses.

-- Hoffmeister (, May 13, 1999


I can't believe that anyone would publish this. Small businesses may be ready, but no one could possibly know. Assessing small businesses is like herding cats.


-- Z1X4Y7 (, May 13, 1999.

NOT ONE small business that I do business with is even WORKING on Y2K remediation!! A hydraulic Mfr. I serve can't even get ONE of their suppliers to fill out a Y2K questionaire!!

There is complete and willful ignorance on Y2K remediation at the small business level based on my circle of business dealings. Budgets are tight, and people are doing the jobs of two or three.

NASE hasn't even addressed the subject (I'm a member). Survey's mean diddly when it comes to small business. Most of them do not provide accurate and detailed information about themselves, even within trade publications that attempt to collate industry-specific data.

It's more spin.

Trust me I know.

I've conducted a zillion business-oriented surveys and out of the miniscule percentage of responses that ever came back, upon further research it's easy to discover that the majority of the information is bogus.

200 responses from over 2.5 million small businesses that exist in this nation with extrapolated data to achieve a conclusion, and declaring that conclusion accurate is ridiculous.

-- INVAR (, May 13, 1999.

And do tell, what do YOU think of this astounding report, Herr Hoffmeister? Or are you "dumbing down" to the level of the NORM machine? (NORM = Non-thinking Output Response Machine)

-- King of Spain (, May 13, 1999.

Boy, I feel better. A week ago, everyone I talked to said "K2what?"

-- Doug (, May 13, 1999.

"It's more spin.

Trust me I know. " all the work I have done fixing my small business was a figment of my imagination? Yes, everyone listen to INVAR...HE KNOWS!

-- Owner Of A Business (, May 13, 1999.


I work closely with a county-level Chamber of Commerce. We can't even get most of the local Chamber members interested in Y2K. They're more interested in meeting payroll next week.

So much for someone's bullshirt survey.

-- Dan Webster (, May 13, 1999.


Expecting the percent of budget spent theory to be meaningful for Small Business is pretty risky.

For a pharmacy industry peek I refer you once again to to see that less than 25% of the some 200 claims processors ( mostly small & medium companies ) have even submitted data to be checked. They're just a little known link in the chain that cures or treats you at a resonable cost. Even if all else goes well John Q. had better have deep pockets indeed if these processors go down.

-- Carlos (, May 13, 1999.

95% of the business we do originates with the state Medicaid office. Do you really think that Medicaid (not to mention Medicare) will truly be compliant?? If that link fails, I'm totally out of matter what I do or how much I spend. There are 57 providers in this state that are in the same boat. There are at least 6 vendors for each provider that will also be severly injured financially. That's over 340 businesses right there...and it doesn't matter if they are compliant or not. Hoff, how can you post such inane nonsense. Right. They surveyed 200 small businesses....out of 2.5 million. And that's supposed to be indicative of the way the work is going???

Somebody has been taking a page out of Billy J.'s book. "The polls say...."

Somebody send those people a ticket to the real world.

Angry enough to break my chain. Lobo

-- Lobo (, May 14, 1999.

Interesting. A conversation in the back of my car this evening actually is pertinent.
XYZ employee "My strength for this team ius that I can look at the asssembly or the bill of materials and tell you how much it costs very closely"
MMK Consultant "that's what we need. BUt you have to remember that the average small shop guy tosses up a building, gets used machines and has no overhead. They don't even do real accounting, They just figure out what they need to pay the bills this month and that's what they charge for the items. It's strictly cash accounting. If we ask what their inventory turnover is or their depreciation is they just look at us in silence. They don't know the answer, and sometimes don't even know what we're talking about."

"Y2K WHAZAT, a new lathe chuck?"


-- chuck, a Night Driver (, May 14, 1999.

Do I think this survey means there will be no problems with small businesses? Hardly.

But, it is another source of information, that suggests that maybe, just maybe, small businesses aren't in quite the dire straits regarding Y2k as some seem to suggest.

I find it interesting that no one questioned the Senate Report conclusions regarding small businesses, yet it relied primarily on a survey conducted by the NFIB. This was a phone survey, consisting of 500 entries. And it was done in October-November 1998. Strange how these objections to "surveys" weren't raised then. Probably missed them.

-- Hoffmeister (, May 14, 1999.

The pessimists are quick to believe an article that says "in a survey of 200 companies, 90% are not planning for contingencies" can extrapolate (straight line) to the remaining businesses around the globe. Yet, somehow this article can't make that same extrapolation.

I can believe that most small businesses will not need much to become compliant. My doctor's office is currently mostly paper, little computer dependencies directly. But of course this article, even though it reports from a reputable company, can not be trusted to bring sound data. Take it for what it's worth, that is, of the sample, things look good.

-- Maria (, May 14, 1999.

i hate to say it, i wish it weren't true, but dan webster and INVAR are absolutely right. the small business situation is not good in MY neck of the woods. also, my husband and i visited Comdex a couple weeks ago in chicago. the y2k pavilion was as quiet as the grave, the GSA officials there had lots of freebie info but no customers, while the Microsoft windows 2000 and office 2000 areas were standing room only.

-- jocelyne slough (, May 14, 1999.

I fully believe you that Windows and Office 2000 were jammed, but did you ever think that the Y2K area was empty because of:

A)The folks might be well into their work already?

B)Might already be finished?

Just a thought. You were at Comdex...I would be more worried if the Y2K pavillion had been jammed at this late date.

-- leaving for work (, May 14, 1999.

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