Y2K's close; we're still not ready

By WIlliam Ulrich 11/29/99 Industry association and government spokesmen have proclaimed the Y2K problem dead.

People believe this because they ignore published status reports to the contrary, see no personal connection to the problem and listen to pundits while doing little research for themselves.

But when problems emerge, companies and governments will take the brunt of the criticism. Assessing the reality of the situation will allow organizations to respond to the public relations challenges ahead. Reality is different from what the media tell us.

In September, Cap Gemini America, an information technology consulting firm in New York, found that 44% of major companies wouldn't have their mission-critical systems compliant by January. A CIO magazine poll found that 81% of large companies weren't yet finished and that half the companies surveyed had no contingency plans. A National Federation of Independent Business study found that 40% of small businesses had done nothing about Y2K.

Where progress has been made, work completed to date remains in question. According to independent validation and verification (IV&V) studies by SEEC Inc. in Pittsburgh, the average mainframe or midrange system contains 510 date-related errors after remediation. A second study in February by Reasoning Inc. in Mountain View, Calif., found between 100 and 1,000 bugs in similar samplings. An unrelated study by SriSoft Corp. in Diamond Bar, Calif., in October discovered that testing catches 30% of Y2K bugs, while IV&V uncovers another 40% to 45%. This leaves 25% of the remaining bugs in a best-case scenario.

Statistics drawn from government hearings and Web sites paint a more detailed picture. Only 13.5% of small and midsize chemical and petroleum firms have completed Y2K preparations. The Food and Drug Administration said 4,053 high-risk biomedical devices remain noncompliant. More than half of all health care providers won't be ready. And 70% of schools are unprepared.

According to calculations found in a report by researcher Warren Bone at New York-based Westergaard.com Inc.'s Web site (www.wbn.com/y2ktimebomb/), only 75% of federal mission-critical systems will be finished by January, and the status of nonmission-critical systems remains unclear. Other reports found 13 states at risk for failures in federal benefit programs, 25% of U.S. counties with no Y2K plan, 63% of 911 call centers unprepared and Medicare provider payments facing delays.

Even best-case scenarios are imperfect. The Social Security Administration (SSA) began year 2000 efforts in 1989. In July, according to the Information Systems Accounting & Information Management Division, SSA found 1,565 year 2000 errors in mission-critical systems. Only 44% of these had been fixed as of October. SSA is still checking data and finalizing contingency plans.

What does this mean to consumers? In statements made in early November to CBS News, the State Department inspector general said, "80 countries are at moderate to high risk, and there will be failures at every economic level, in every region of the world." Nick Gogerty, an analyst at London-based International Monitoring, predicted in October that Y2K would lead to $1.1 trillion in damages worldwide, not including those from litigation and insurance costs. These costs, along with many inconveniences, will affect us next year.

Why is the government telling us that most industries are 100% Y2K-compliant when bug-free systems are a myth? The answer is that the government and selected industries don't want people to panic. But when things go wrong, people will demand answers.

What can organizations do when problems strike? First, consider that 80% of your customers expect no year 2000 problems at all. Second, don't believe your own industry hype about 100% compliance. Third, be polite and let them know we are all in this together -- for the long haul.

Most important, when future large-scale challenges arise, consider your industry's posture. The unrealistic Y2K performance expectations set by industry associations are unachievable. Finally, see if any of those high-priced public relations directors want to work your customer hot line in January. They may learn something about manipulating perceptions about matters they barely understand.

William M. Ulrich is president of Tactical Strategy Group Inc. and co-founder of Triaxsys Research LLP. Contact him at tsginc@cruzio.com.

-- (roger@netdex.com), November 29, 1999