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New York, August 10, 1999-/y2kwire/--Fewer than half of America's largest companies (48 percent) expect all of their critical systems to be prepared for the year 2000, according to a new survey by Cap Gemini America, Inc., an information technology and management consulting leader.

-- internet cruiser (internetcruiser@internetcruiserrr.com), August 11, 1999

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Fewer Than Half of Major Firms Anticipate Full Year 2000 Compliance in Critical Systems by Year's End

Business/Technology Editors

NEW YORK, Aug. 10, 1999--/Y2K WIRE/-- Three-Quarters Have Experienced a Year 2000-Related Failure Firming Their Grip on Year 2000 Problem Solving, More Top Managers Plan to Run Millennium Crisis Centers Fewer than half of America's largest companies (48 percent) expect all of their critical systems to be prepared for the Year 2000, according to a new survey by Cap Gemini America, Inc., an information technology and management consulting leader.

One in five companies (18 percent) expect that 75 percent or less of their critical systems will be "completely tested and compliant" by December 31, 1999. Thirty-six percent expect between 76 and 99 percent of their applications to be ready for Year 2000, and two percent anticipate completing work on 50 percent or less of their systems.

Three-quarters (75 percent) of respondents have experienced a "Year 2000-related failure," up slightly from 72 percent last quarter. Fifty-five percent reported such errors last December. The most frequent failures involved "financial miscalculation or loss" (92 percent), followed by "processing disruptions" (84 percent), "customer service problems" (38 percent) and "logistics/supply chain problems" (34 percent). Two percent reported Year 2000-related "business disruptions." Virtually every respondent (99 percent) anticipates "an increase in systems failures into the remainder of 1999 and beyond."

The Cap Gemini America survey also finds corporate management strengthening its hand on a number of fronts to protect business from Year 2000-related damage.

"With full readiness beyond the reach of many leading firms, responsibility for Year 2000 management has passed from the hands of the CIO into the hands of the CEO," said Jim Woodward, senior vice president of Cap Gemini America and head of its TransMillennium^TM Services group. "The time has finally arrived when top management views the Year 2000 challenge as a business problem and not merely a technology problem."

According to the Cap Gemini America report, the percentage of top managers planning to take charge of Year 2000 "crisis management centers" rose from 62 percent in May to 84 percent - an increase of 35 percent. Such centers - dedicated to addressing potential problems relating to the millennium date change - are now planned by 96 percent of respondents, up from 85 percent last quarter. All respondents report an increased focus on business continuity efforts over the last quarter.

Business management is bolstering its Year 2000 role in other ways besides taking charge of crisis command posts. The percentage of major corporations now "potentially likely" or "very likely" to sever ties with non-Year 2000-compliant suppliers of services and products rose from 87 percent to 92 percent over the past quarter. Firms "very likely" to stop doing business with non-compliant partners leaped from 21 percent to 36 percent since May -- a 41 percent increase. The proportion of top managers content to delegate Year 2000 contingency planning to information technology (IT) departments has shrunk from 35 percent last October to 12 percent -- a 64 percent decline. And large firms are now universally willing to participate in joint Year 2000 command centers within their industry, in command posts crossing industry lines, and in global, cross-industry, crisis centers.

Independent verification and validation (IV&V) - the process used to check the quality of renovated code - has emerged as standard industry practice, the Cap Gemini America survey shows. Nearly nine of ten major firms (89 percent) rank their need for IV&V services as "high," a 71 percent rate of increase from 52 percent last December. "Many firms handled much of their Year 2000 work in-house, and now recognize that their results need outside verification," said Woodward. "IT executives want to show top management that the job was done right."

The survey, one of the longest-running corporate polls to systematically monitor Year 2000 preparedness, includes responses from information technology directors and managers of 144 major U.S. corporations across all major industrial sectors and 17 federal, state, and local government agencies. It is carried out by Rubin Systems, Inc. for Cap Gemini America.

In spite of the persistent incidence of Year 2000 failures, IT managers of the nation's largest corporations report improved performance in meeting Year 2000 deadlines. While 92 had reported increases in "milestone slippage" both in December and May, only 81 percent are now experiencing an accelerated incidence of missed deadlines.

A growing proportion of corporate America views Year 2000 readiness as a competitive advantage. The percentage of firms likely to incorporate Year 2000 compliance into their marketing messages has increased since December from 65 percent to 89 percent.

TransMillennium^TM Services is Cap Gemini America's Year 2000 group. Cap Gemini America uses a highly automated and factory-based approach to the date change challenge. Cap Gemini America's ARCdrive® toolset has already helped more than 400 businesses worldwide address Year 2000 issues on more than 4 billion lines of code. The company's Year 2000 clients represent diverse major industries, including: financial services, telecommunications, banking, insurance, manufacturing, utilities, healthcare, and government.

Cap Gemini America, Inc. is an information technology (IT) and management consulting services leader with 4,500 employees at 35 locations in the United States and 1998 revenues of $623 million. Cap Gemini America offers full life-cycle services based on industry-specific expertise in the areas of applications management, enterprise resource planning, Enterprise EffectivenessSM, customer relationship management, Year 2000, and management consulting through its Gemini Consulting division. It is part of the $4.4 billion Cap Gemini Group -- Europe's largest IT services and business consulting organization that was recently named "European Company of the Year" by the European Business Press Federation. Cap Gemini's 40,000 employees in 20 countries design and deliver strategic change through ideas, people, and technology. Visit Cap Gemini America on the Internet at http://www.usa.capgemini.com/ .

-- Uh-Oh (full@story.com), August 11, 1999.

See earlier thread on this story

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

-- Oops (did it @again.com), August 11, 1999.

Question...if less than HALF will get it done, how will 89% use their "COMPLIANCE in marketing???

Will they openly commit a "DECEPTIVE PRACTICE??

Something doesn't add up!

-- K. Stevens (kstevens@It's ALL going away in January.com), August 11, 1999.

K. Stevens, you are on to something here. When the last survey's results were released, and the percentage expecting not to be complete with critical systems was a "mere" twenty-two percent, I asked how many of them were issuing press releases to that effect. :- )

One of the reasons so many people are inordinately optimistic about Y2K is that the good news is "released" but the bad news is kept under wraps. So, all most people get is the good news.

-- Lane Core Jr. (elcore@sgi.net), August 11, 1999.

This can't be true. Y2kPro (or Y2kpro wannabe) thinks everything is fine. :)

-- snickering at y2kpro (y2kpro_is_a_@moron.com), August 11, 1999.

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-- link (link@link.link), August 11, 1999.