Increasingly Underestimate Costs, Miss Deadlines, and Experience
Breakdowns
Of 12 Sectors Assessed, Survey Ranks Utilities, Health, and
Transportation As Least Prepared;
NEW YORK--(BUSINESS WIRE)--July 20, 1998-- Contingency Planning Jumps
From Three Percent to 72 Percent in Three Months
America's largest corporations are confronting significant obstacles as
they accelerate efforts to address the Year 2000 computer challenge,
according to a new poll of information technology (IT) managers. The
survey interviewed IT managers at 128 of the nation's most successful
firms.
Six of seven Fortune 500 firms have now launched a ''full-fledged
strategy'' to deal with Year 2000 issues, a percentage that has
increased from 20 percent to 86 percent in seven months. The same
proportion - 86 percent - has detailed Year 2000 plans in place, up from
33 percent in December 1997.
Amid this burst of activity, however, growing numbers of major
corporations are underestimating costs, falling behind schedule, and
experiencing Year 2000-related breakdowns.
''Corporate America is finally dealing head-on with the Year 2000
challenge,'' said Jim Woodward, senior vice president of Cap Gemini
America and head of its TransMillennium(TM) Services group. ''But while
major firms are taking the job seriously, they're running into
difficulties and delays.''
The number of companies focusing on contingency planning surged to 72
percent from only 3 percent in April, reflecting the unexpected problems
encountered in Year 2000 work. Eighty-four percent have changed their
overall approach since starting their initiatives.
The tracking poll of IT directors and managers in 12 sectors -- one of
the longest-running surveys to systematically monitor Year 2000
readiness -- has been conducted since March 1995 by Cap Gemini America,
a market leader in Year 2000 services. The poll is conducted for Cap
Gemini America by Rubin Systems Inc.
The survey shows corporations are finding Year 2000 work unexpectedly
expensive and difficult. The percentage of firms underestimating Year
2000 costs increased from 82 percent to 87 percent since December, with
only two percent describing their cost estimates as ''on target.''
Sixty-nine percent are unable assess whether they will be able to adhere
to 1999 spending projections.
More firms are falling behind schedule. The percentage expecting to have
more than half of their systems compliant by the end of 1998 declined
from 85 percent in April to 81 percent. The percentage of firms missing
Year 2000 plan ''milestones'' rose from 78 percent to 84 percent over
the same period.
The incidence of Year 2000-related failures increased from seven percent
in December, to 37 percent in April, to 40 percent this month. Types of
failures included processing disruptions (87 percent of respondents
reporting failures), financial miscalculation or loss (62 percent),
logistics/supply chain problems (44 percent), and customer service
problems (38 percent).
''Virtually all respondents have Year 2000 testing guidelines and are
making progress in testing converted code,'' Woodward said. ''The
problems revealed in this survey, however, underscore the need for
testing work to be fast, accurate, and comprehensive.''
For the first time, the tracking survey asked a series of ''success
evaluation'' questions designed to predict each economic sector's risk
of Year 2000 project failure. Based on a combination of project progress
and risk failure factors, the poll found the utility, transportation,
and health sectors in greatest danger of Year 2000 failure. Sectors
best-positioned for Year 2000 success were software, financial services,
and computers. Other sectors profiled -- in descending order of
preparedness -- included manufacturing, telecommunications, oil and gas,
aerospace, pharmaceutical, and distribution.
Of ten ''business impact'' areas, Year 2000 issues were reported to have
the greatest impact on product delivery, followed by customer
satisfaction and new product development.
Cap Gemini America is a member of the Cap Gemini Group, one of the
world's largest computer services and business consultancy companies in
the world. In the United States, Cap Gemini America employs
approximately 3,400 people.
TransMillennium(TM) Services is Cap Gemini America's Year 2000 group.
Cap Gemini America uses a highly automated and factory-based approach to
the date change challenge. Cap Gemini America's ARCdrive(SM) toolset has
already helped more than 300 businesses worldwide address Year 2000
issues on over 3 billion lines of code. The company's Year 2000 clients
represent diverse major industries, including financial services,
telecommunications, banking, insurance, manufacturing, utilities,
healthcare, and government.
Cap Gemini America's Year 2000 web site is
usa.capgemini.com. |
