Executive Summary from today's Senate Y2K press conference
senate.gov
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OVERALL OBSERVATIONS - in their own words (no editing)
- Many organizations critical to Americans' safety and well-being are still not fully engaged in finding a solution.
- Most affected industries and organizations started Y2K remediation too late.
- Self-reporting has yielded unreliable assessments for most industry sectors. With few exceptions, disclosure of Y2K compliance is poor.
- Fear of litigation and loss of competitive advantage are the most commonly cited reasons for bare-bones disclosure.
- Nat'l emergency & security planning for Y2K-related systems failures is just beginning.
- Leadership at the highest levels is lacking.
SECTOR ASSESSMENTS
UTILITIES: While some compliance efforts are behind, the utility industry as a whole is configured to handle interruptions, blackouts, and natural disasters. A prologned nationwide blackout is not likely to occur. However, local and regional outages remain a distince possibility depending upon the overal preparedeness of the individual electric utility serving a given area.
HEALTHCARE: The health care industry lags significantly in its Y2K preparations compared to other sectors. Because of limited resources and lack of awareness, rural and inner-city hospitals have particularly high Y2K risk exposure.
TELECOMMUNICATIONS: A massive industry-wide effort is underway to assess the impact of Y2K on telecommunications. The initial interoperability testing indicates that the U.S. communications will transition without signigican problems. Currently, more than 80% of public network systems have been tested and are considered compliant.
TRANSPORTATION: The transportation sector is the linchpin for just-in-time inventory management across most every sector, from health care supplies to food. The Y2K readiness of this sector is critical to our global economy. Planes will not fall out of the sky, but disruption of flights and global trade between some areas and countries may occur.
FINANCE: ATM's are expected to function correctly and banks should have adequate cash to meet consumer demand, based on a Federal Reserve estimate that each American household will withdraw an averag of $500. The securities industry has responded well to it's internal Y2K isues and has undertaken expansive testing. However, fund managers and brokers have only recently started to consider the implication of corporate Y2K vulnerability on investment decisions.
GOVERNMENT: Several state and many local governments lag in Y2K remediation, raising the risk fo service disruption. The federal government will spend in excell of $7.6 billion and will not be able to renovate, test and implement all of its mission critical systems in time. However, wholesale failure of federal government services is not likely to occur.
GENERAL BUSINESS: In general, large companies have dealt well with the Y2K problem, due to greater resources. Very small businesses may survive using manual processes until Y2K problems are remediated. However, many small- and medium-sized businesses are extremely unprepared for Y2K disruptions. One survey shows that more than 40% of 14 million small businesses do not plan to take any action.
LITIGATION: The prospect of litigation arising from Y2k-related failures has shadowed the Committee's work from the very beginning.
INTERNATIONAL: Several U.S. trading partners are severely behind in their Y2K remediation efforts. For example, the Gartner Group estimates that Venezuela and Saudi Arabia (two of the largest U.S. oil importers) are 12 to 18 months behind the U.S. in their Y2K remediation efforts...
The Committee has no data to suggest that the United States will experience nation-wide social ro economic collapse, but the Committee believes that some disruptions will occur, and that in some cases Y2K disruptions may be significant. The international situation may be even more tumultuous ...
Americans should prepare for Y2K based on facts and reasonable predictions about the problem's effects on vital services.
Cheryl
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"However, fund managers and brokers have only recently started to consider the implication of corporate Y2K vulnerability on investment"
U.S. Senate - Executive Summary - March 2, 1999 |
