*OT* Y2K - To those interested, here is C. Schwab's reply to my inquiry regarding the Y2K issue. It's long but interesting...
Next, we want to assure you that Schwab is committed to maintaining and enhancing our levels of customer service through the Year 2000, and we have dedicated substantial time, energy and resources to bring our systems into Year 2000 compliance.
Remediation Plans
Schwab has a comprehensive plan in place so that our systems will perform without material disruption as we move into the Year 2000. Our remediation plan involves every area of business within the company. An experienced team of approximately 225 professional managers, programmers and consultants is working on the Y2K challenge. This team is responsible for analyzing and remediating Schwab's technology (mainframes and distributed applications), networks (voice and data), business systems and facilities.
An inventory of our technology systems was completed in October 1997. We are now in the process of modifying our computer systems to be able to process data and transactions incorporating Y2K dates without material errors or interruptions. Efforts include either the remediation or replacement of existing computer programs, as well as the development of new computer programs. The total lines of code that are date impacted for Schwab's mainframe applications is estimated to be 230,000 (out of roughly eight million) across approximately 61 systems, 25 of which are mission-critical.
Our current plan is to have all of our "mission-critical" trading systems remediated by the end of June 1998. Mission-critical for purposes of our Year 2000 project means functions essential to our core business whose failure would cause significant trading, regulatory or customer impact. All remaining critical systems are scheduled to be remediated by the end of 1998. For example, systems that support your ability to place a trade order will be remediated by mid-1998, and systems that support trading confirmations should also be compliant by mid-1998.
Detailed guidelines for Schwab programmers were implemented in July 1997 which require that all new code is written in Y2K compliant format.
We currently estimate that it will cost approximately $35 million to $45 million to modify our core brokerage computer systems to be Y2K compliant. We expect to fund all Year 2000 related costs through operating cash flows, and these costs are not expected to result in increased information technology expenditures because they will be funded through reallocation of overall development spending.
Testing
Schwab has developed testing strategies for both internal systems and external third-party interfaces and components. Internal testing began in 1997 as the first remediated code was installed into production systems.
In December 1997, Schwab began participating in industry testing with the American Stock Exchange, the New York Stock Exchange and the National Securities Clearing Corporation. As you may know, the Securities and Exchange Commission requires that brokerage firms be prepared for "streetside" testing by April 1999. Streetside testing is industry-wide testing among exchanges, clearing agents and other market participants to assess Y2K compliance. Schwab will participate in streetside testing and actively engage in industry-wide testing with our business alliances. We will be testing the data we receive from third parties on a separate testing system to ensure that the data is Y2K compliant, in order to diminish the risk of introducing non-compliant data into our systems.
Testing will continue throughout 1998 and 1999.
Business Partners
One of the most significant issues for any Y2K effort is determining whether third-party vendors and business alliances will achieve satisfactory Y2K compliance in a timely manner. The success of Schwab's plan depends in part on parallel efforts being undertaken by other entities with which our systems interact. Our Y2K team is working with our business alliances to enable us to continue our business without material errors or interruptions through the Year 2000.
We are taking steps to determine the status of these other entities' Y2K compliance plans. For instance, we are conducting an extensive survey of all significant vendors with whom we interact, asking that they report their respective level of Y2K compliance. We are exploring ways of monitoring the progress of those "business-critical vendors" who are still working towards achieving compliance.
We hope this information has answered your questions about Schwab's efforts to achieve Y2K compliance. If you have any additional questions, please contact our Year 2000 Project Office at (415) 636-8854 or send e-mail to www.2000.customer@schwab.com.
Thank you for your patience and continued business. We look forward to hearing from you and meeting your investment needs.
If you have any further questions or concerns, please do not hesitate to contact us. Thank you for using Schwab's Electronic Brokerage Services.
Sincerely,
Ginger Angell
Schwab Electronic Brokerage Services
........"They're working on it...." hmmmmm
Adios,
JH
p.s. Oh yeah, GO DELL! |
