Something to contribute to the board:
Merrill to Spend More Than $200 Mln on Year 2000
bloomberg.com
New York, June 24 (Bloomberg)-- Merrill Lynch & Co. expects
to spend in excess of $200 million to make its computers work in
the year 2000.
Arthur L. Thomas, director of global operations services at
Merrill Lynch, said that sum comprises as much as 40 percent of
the firm's projected budget for information technology through
2000.
A mixture of software upgrades, system overhauls and
extensive testing will enable Merrill Lynch ``to transact our
business on a global basis without disruptions in applications,
either internally or externally'' after Jan. 1, 2000, he said.
Thomas spoke with reporters at the Securities Industry
Association Information Management Conference and Exhibit.
Merrill Lynch has the ability to be fully prepared for the
next millennium by the third quarter of 1998, said Thomas, who
also chairs the SIA's Year 2000 committee.
Securities firms could likely spend $5 billion tackling the
problem, which has been termed by the Information Technology
Association of America as ``arguably the largest and most complex
global information challenge that the world has ever faced.''
That threat stems from the fact many old systems were taught
to read dates in two-digit form, such as '88 or '92. The year
2000, or 00, is understood as 1900.
Billing systems, orders for securities and back-office
compliance systems are some of the areas at risk of shutting
down if the software is not fixed.
Merrill's estimate of the cost for making its systems ready
for the year 2000 rivals the forecast for spending made by Chase
Manhattan Corp. The nation's largest bank pegged the cost for
year 2000 at $200 million to $250 million in the next three years
in its latest annual report.
Securities firms may have a harder time getting ready for
the next century than other business groups because of Wall
Street's penchant for buying unique software, said Charles E.
Phillips, an enterprise software analyst at Morgan Stanley, Dean
Witter, Discover & Co.
While that gave them an edge over competitors, it makes
their systems less likely to respond to standard year-2000 tools.
``That advantage has now turned into a problem,'' he said.
Outside of the securities industry, some companies said they
over-estimated the cost for fixing the year 2000 bug, Phillips
said. ``As more time passes, you get a better handle on it.''
--Roger Madoff and Douglas Steinke in the New York newsroom (212) 318-2300/jp
/ag |
