The Options Clearing Corp.:
Embedded system land mines
Having invested more than a decade of time in remediation efforts to counteract the millennium bug, Len Neuzil is one of the few IT executives who should feel confident that all systems are go for the year 2000.
But he's not, mostly because there are so many things that are out of his control: specifically, the embedded chips that reside within mainframes, servers, power grids and telephone circuit switches, to name a few.
These embedded microprocessors, Neuzil would argue, are the real ticking time bombs, not the software programs. "The embedded chips are made from different manufacturers around the world," says Neuzil, senior vice president of the Production Systems Division at The Options Clearing Corp., in Chicago. "We don't know where they are coming from, and we can't look at the code on the chip."
As a result, the first shot of even knowing where these microchip land mines lie in an organization will come on Jan. 1, 2000. Therefore, OCC has lined up two disaster recovery sites, the company is accepting power feeds from two separate grids, and it is buying digital cell phones that double as walkie-talkies.
Neuzil is also talking to the building management where his office resides to inquire about the readiness of elevators and escalators. After all, Neuzil's office is on the 24th floor.
Y2K stats: The Options Clearing Corp.
Staff dedicated to Y2K: 15 programmers
Lines of code to be translated: 2.1 million
Deadline for completion: The Options Clearing Corp. started the conversion process in 1985, and, as of 1996, the company has been Y2K-compliant. Despite the fact the company has invested more than a decade on conversions, the Y2K team will continue testing well into the year 2000.
Special issues: As the clearinghouse for the American Stock Exchange, the Chicago Board Option Exchange, the Pacific Stock Exchange and the Philadelphia Stock Exchange, OCC has a daily liability of $30 billion. Therefore, it can allow no downtime whatsoever. As a result, OCC is looking beyond the issue of Y2K software compliance to focus Y2K efforts on the embedded chips residing in the company's servers and mainframes. In addition, OCC has contacted the power company, the telephone company and the building management of its Chicago office to make sure communication is not cut off, electricity is on and elevators are operating after the date roll.
These initiatives may seem extreme, but OCC has about 150 customers in the form of clearing member companies and stockbrokers that rely on the company's ability to conduct daily trades. OCC is a clearinghouse for the American Stock Exchange, the Pacific Stock Exchange, the Philadelphia Stock Exchange and the Chicago Board Option Exchange. One day down would be a $30 billion liability for OCC, Neuzil says.
Obviously, the stakes are high, and Neuzil is not taking any chances. If the OCC data center were to lose power, the company's mainframe and its Sun Microsystems Inc. Solaris servers can draw power from a second power feed that could in fact originate in a different state. If that power supply were to fail, operations could switch over to the disaster recovery site in North Bergin, N.J., which is run by Comdisco Inc.
The Comdisco site is a replica of the Chicago data center, running operations in parallel. In addition, OCC has contracted four diesel generators from Comdisco to power the data center in case there is no electricity in New Jersey. To triple his efforts, Neuzil has had Comdisco build a second site in Wood Dale, Ill.
At this point, the plan seems solid. But there is also the issue of communication. If the phone lines go down because the telephone company experiences a Y2K glitch, there is a good possibility that the leased lines and cellular phones will be out of commission as well, Neuzil says. Therefore, he has purchased a few dozen phones from Nextel Communications Inc. that are cellular but double as walkie-talkies, allowing communication within a 31-mile radius.
Neuzil is passionate about protecting OCC and the financial community as a whole. Therefore, OCC representatives sit on five subcommittees formed by the Securities Industry Association, which this month will conduct an industry Y2K beta test with 18 participating companies. Next March, the entire securities industry will be included in the tests.
Despite Neuzil's efforts and the industrywide testing, it still may not be enough to protect the financial community from a sudden Y2K explosion of some sort. "Even if we are ready and we do everything perfectly, if one major exchange or big clearing member [has a problem], it will affect us all," Neuzil says. "And even if that works, but something happens in the Pacific Rim or the [United Kingdom], it could affect our market."
Neuzil is realistic: "No matter how good a job all of us do," he says, "we won't catch it all."
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