Results from the 3Q1998 Year 2000 Tracking Survey performed for Cap Gemini
America
anyone long in bodyshops like KEA note #5
· The number of companies claiming to have underestimated Year 2000 costs
has dropped from 87% to 85%; the number that believe their estimates are on
target has jumped from 2% to 8%.
· Actual Year 2000 spending is far lower than budget estimates... while
most companies have estimated they would spend between 20% and 30% of their
IT budgets on Year 2000, actual US figures indicate about 8-9% is being
spent. Outside the US the number is closer to 5%.
· The percentage of the IT budget being allocated to Year 2000 appears to
be related to the overall funding level of the IT organizations;
organizations that are generally underfunded are allocated a
disproportionately large share of their budgets to Year 2000.
· The largest growth area of Year 2000 budgets related to application code
remediation is targeted at suite testing activities; the largest growth in
platform activity is in the desktop area.
· The trend to rely on internal staff is on the rise... up from 48% of work
to 56% of work since June.
· Year 2000 compliance is becoming a factor in business to business
relationships -- 60% of those surveyed indicate that it is very likely or
potentially likely that they will not do business with non-compliant
suppliers and partners... this is up from 55% in June.
· The number of companies considering using Year 2000 compliance in their
marketing message has increased from 32% in June to 50%. Business partner
cooperation and vendor compliance still receive poor ratings across the
board.
· All companies surveyed expect to discuss Year 2000 in their annual
reports
· Contingency planning is now occurring in 90% of those surveyed -- up from
72% in June and only 3% in March. In 20% of cases the plans are being
developed by existing business continuity teams; in 35% of cases by the
Year 2000 team; and in 45% of cases by a joint team. 60% of this work
focuses on prevention of disruption while 30% is focused on mitigating
problems once they occur.
· 82% of companies have found that their existing business disruption plans
do not provide adequate coverage for Year 2000.
· 35% of organizations are planning to build Year 2000 specific command
centers while 33% are combine this function with existing business
continuity mechanisms. In 42% of cases, business management will be
running the command centers while 30% will be joint business and IT
management. 85% of companies are willing to participate in industry group
command centers.
· The number of organizations indicating a need to increase staff has
declined from 78% in June to 65%. Testing and project management are the
primary staff need areas.
· Virtually all companies surveyed (98%) have a full fledged program with
detailed plans in operation however only 10% have plans that have weekly
milestones or checkpoints.
· The planned Year 2000 approach has changed in 88% of organizations -- the
biggest shifts have to do with moving work in-house and expansion testing.
· Milestone slippage is increasing in 90% of the organizations. The least
slippage is evident in the following sectors: software, financial services,
manufacturing, telecommunications, distribution; the most: all levels of
government.
· The number of organizations expected to have more than 50% of their
systems tested and compliant by 1/1/1999 has dropped from 81% to 74%. 86%
expect to have 76% to 100% of systems ready by 12/31/1999. End to end
testing is now being planned for more systems.
· 44% of those surveyed have had a Year 2000 related failure (up from 40%
in June). Most of the failures have caused a processing disruption or
financial miscalculation.
· 95% believe that there will be a major increase in failures during 1999.
· Local government projects appear to be at the greatest risk.
· Despite Year 2000 concerns business priorities are highly focused on
revenue, profitability, regulation/deregulation, and the global economy.
Year 2000 issues do not appear in the top 5 for any industry group however
Year 2000 issues rank as the #1 priority in the IT community.
· Top 5 priorities for the next 500 days are: systems installation, the
operating environment, the desktop, vendors, business partners, and the
supply chain.. followed by contingency planning
· Major perceived post 1/1/2000 activities include 1) crisis/event
management 2) conversion of secondary systems 3) deferred platform upgrades
4) the work backlog 5)staff redeployment
· EMU conversion issues are most evident in the following sectors:
financial services, oil & gas, pharmaceuticals, transportation, software,
and manufacturing.
· In general EMU projects are being managed separately from Year 2000
projects and are treated with higher priority.
· Particularly in financial services EMU work is conflicting with Year 2000
progress.
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