Subject: Survey
Date: Fri, Dec 19, 1997 1:40 PM
From: SMKCPA
Message-id: <19971219134001.IAA03261@ladder02.news.aol.com>
ONLY ONE IN FIVE MAJOR EMPLOYERS HAS LAUNCHED FULL-FLEDGED STRATEGY TO FIX "MILLENNIUM BUG"
Two Out of Three Lack a Detailed Plan
Seven Percent Have Already Experienced a Year 2000 Computer Failure; 82 Percent Have Underestimated Cost of the Fix
New York, NY, December 17, 1997--/Y2K WIRE/--With 1998 just days away, a new poll of information technology (IT) officers representing America's largest employers reveals that only one in five of the corporations surveyed - 20 percent - has begun implementing a full-fledged strategy to achieve Year 2000 compliance, and that only one in three - 33 percent - has a detailed plan in place.
Yet America's largest corporations agree that 1998 represents the final chance to solve most of their millennial computer problems, with nearly nine out of ten - 87 percent - expecting more than half of their systems to be Year 2000-compliant by the close of next year.
"Corporate America is disturbingly behind schedule in dealing with the Year 2000," said Jim Woodward, senior vice president of Cap Gemini America's TransMillennium (tm) Services. "After nearly three years of tracking corporate response to the Year 2000 problem, we would have expected to see significantly more firms with detailed plans in place by now."
The tracking poll of 108 IT directors and managers in 14 sectors - conducted regularly since March 1995 - is one of the longest-running surveys to systematically monitor corporate America's readiness for the Year 2000. Respondents to this month's poll comprise approximately one seventh of the United States' gross domestic product. The poll is conducted by Rubin Systems Inc. for Cap Gemini, a market leader in Year 2000 services.
"The Year 2000 problem needs to be taken more seriously because 1998 is the last chance to solve it," said Mr. Woodward. "Not only is upgrading and testing computer systems a massive, complex task, but some major systems are certain to fail in January 1999 because they contain one-year date projections into the Year 2000."
Since the Year 2000 issue has become a top priority for information technology executives for the nation's largest employers, spending on the problem is making it increasingly difficult to achieve other important corporate objectives. The percentage of companies deferring new development work over the past eight months has increased from 11 percent to 18 percent, and the percentage choosing to defer enhancements to existing systems rose from 22
percent to 30 percent over the same period.
"The most important Year 2000 corporate survival strategy for 1998 is to banish complacency, because delay makes the job more costly and complex," said Mr. Woodward. "Business partners should be surveyed to see whether they are Year 2000-compliant, and testing should be an essential part of the program."
While all surveyed companies plan partial tests of the renovated systems, only 60 percent plan "end-to-end" testing, which measures the integrity of upgraded systems through both pre-2000 and post-2000 date scenarios.
"For consumers, 1998 isn't too early to create a survival strategy," said Mr. Woodward. "Start keeping hard copies of financial records and test personal computers to make sure they'll handle the Year 2000 date correctly. And review investments to see what companies are doing to address the problem."
Corporations, however, are reticent about public disclosure of Year 2000 information. Only 12 percent plan to discuss the issue in annual reports or shareholders statements, and 8 percent expect to discuss it in Securities and Exchange Commission filings. Cap Gemini officials predict that access to information will rise as new SEC disclosure requirements make their impact felt.
Total goods and services produced by employers surveyed by Cap Gemini account for roughly 14 percent of the nation's gross domestic product. Surveyed employers represent financial services, telecommunications, manufacturing, software, pharmaceutical, energy supply, health care, distribution, and six other sectors.
Cap Gemini America is a member of the Cap Gemini Group, the third-largest computer services and business consultancy company in the world with annual revenues of $3.4 billion. Founded 30 years ago, the company employs approximately 27,000 people in the United States,15 European countries, and the Far East. Offering a broad range of information technology and business consulting services, Cap Gemini helps clients to run their businesses better by
developing and implementing strategic operational management and information technology solutions that enable people in their organizations to address critical business issues. In the United States, Cap Gemini employs approximately 3,200 people with 1996 revenues of $320 million. Cap Gemini America's Year 2000 web site is usa.capgemini.com.
TransMillennium (tm) Services is Cap Gemini's transnational Year 2000 group, with more than 500 completed and active engagements for more than 250 Year 2000 clients in diverse major industries, including financial services, telecommunications, banking, insurance, manufacturing, and healthcare. Cap Gemini uses a highly automated and factory-based approach to the date change problem. The company was the first international Year 2000 provider to gain
ITAA-2000 certification by the Information Technology Association of America.
The tracking poll was conducted for Cap Gemini by Dr. Howard Rubin, CEO of Rubin Systems, Inc. of New York. Dr. Rubin is widely recognized within the computer science field as an author, researcher and consultant in the areas of global software economics and the Year 2000 problem.
KEY FINDINGS
CAP GEMINI SURVEY OF MAJOR EMPLOYERS' PREPAREDNESS FOR THE YEAR 2000 - DECEMBER 1997
_One in five of the employers surveyed - 20 percent - has begun implementing a full-fledged strategy to achieve Year 2000 compliance
_One in three companies - 33 percent - has a detailed Year 2000 compliance plan in place
_Respondents "strongly agree" that Year 2000 is a high priority in their information technology organizations and that "conversions must begin now"
_Nearly nine out of ten employers - 87 percent - expect more than half of their systems to be Year 2000-compliant by the end of next year
_More than three quarters of the companies surveyed - 77 percent - have changed their approach to the problem since they started
_Four out of five employers - 82 percent - report having underestimated their Year 2000 costs
_The number of companies perceiving a need to increase staff grew by 60 percent since April - from 45 percent to 72 percent - and 95 percent report that finding new staff will be either difficult or impossible
_Seven percent of the surveyed firms have already experienced a Year 2000-related failure
_The percentage of employers deferring new development work over the past eight months has increased from 11 percent to 18 percent, and the percentage choosing to defer enhancements to existing systems rose from 22 percent to 30 percent over the same period
_Top management involvement in solving the Year 2000 problem has increased over the past eight months from 70 percent to 100 percent
_All surveyed employers plan partial tests of their newly renovated systems. 60 percent intend to perform complete, "end-to-end" testing, i.e., a protocol that tests the integrity of upgraded systems through both pre-2000 and post-2000 date scenarios
_Three fifths of those planning end-to-end testing intend to perform it on no more than a quarter of all their systems
_12 percent are now preparing to discuss the Year 2000 in annual reports or statements to shareholders, and 8 percent expect to discuss it in filings with the Securities and Exchange Commission
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