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Year 2000 Wire/
Fewer Than Half of Major Firms Anticipate Full Year 2000
Compliance in Critical Systems by Year's End
07:37 a.m. Aug 10, 1999 Eastern
NEW YORK--(BUSINESS WIRE)--Aug. 10, 1999--
Three-Quarters Have Experienced a Year 2000-Related Failure
Firming Their Grip on Year 2000 Problem Solving, More Top
Managers Plan to Run Millennium Crisis Centers
Fewer than half of America's largest companies (48 percent) expect all of their
critical systems to be prepared for the Year 2000, according to a new survey by
Cap Gemini America, Inc., an information technology and management consulting
leader.
One in five companies (18 percent) expect that 75 percent or less of their
critical systems will be "completely tested and compliant" by December 31,
1999. Thirty-six percent expect between 76 and 99 percent of their applications
to be ready for Year 2000, and two percent anticipate completing work on 50
percent or less of their systems.
Three-quarters (75 percent) of respondents have experienced a "Year
2000-related failure," up slightly from 72 percent last quarter. Fifty-five
percent reported such errors last December. The most frequent failures involved
"financial miscalculation or loss" (92 percent), followed by "processing
disruptions" (84 percent), "customer service problems" (38 percent) and
"logistics/supply chain problems" (34 percent). Two percent reported Year
2000-related "business disruptions." Virtually every respondent (99 percent)
anticipates "an increase in systems failures into the remainder of 1999 and
beyond."
The Cap Gemini America survey also finds corporate management strengthening its
hand on a number of fronts to protect business from Year 2000-related damage.
"With full readiness beyond the reach of many leading firms, responsibility for
Year 2000 management has passed from the hands of the CIO into the hands of the
CEO," said Jim Woodward, senior vice president of Cap Gemini America and head
of its TransMillennium(TM) Services group. "The time has finally arrived when
top management views the Year 2000 challenge as a business problem and not
merely a technology problem."
According to the Cap Gemini America report, the percentage of top managers
planning to take charge of Year 2000 "crisis management centers" rose from 62
percent in May to 84 percent - an increase of 35 percent. Such centers -
dedicated to addressing potential problems relating to the millennium date
change - are now planned by 96 percent of respondents, up from 85 percent last
quarter. All respondents report an increased focus on business continuity
efforts over the last quarter.
Business management is bolstering its Year 2000 role in other ways besides
taking charge of crisis command posts. The percentage of major corporations now
"potentially likely" or "very likely" to sever ties with non-Year
2000-compliant suppliers of services and products rose from 87 percent to 92
percent over the past quarter. Firms "very likely" to stop doing business with
non-compliant partners leaped from 21 percent to 36 percent since May -- a 41
percent increase. The proportion of top managers content to delegate Year 2000
contingency planning to information technology (IT) departments has shrunk from
35 percent last October to 12 percent -- a 64 percent decline. And large firms
are now universally willing to participate in joint Year 2000 command centers
within their industry, in command posts crossing industry lines, and in global,
cross-industry, crisis centers.
Independent verification and validation (IV&V) - the process used to check the
quality of renovated code - has emerged as standard industry practice, the Cap
Gemini America survey shows. Nearly nine of ten major firms (89 percent) rank
their need for IV&V services as "high," a 71 percent rate of increase from 52
percent last December.
"Many firms handled much of their Year 2000 work in-house, and now recognize
that their results need outside verification," said Woodward. "IT executives
want to show top management that the job was done right."
The survey, one of the longest-running corporate polls to systematically
monitor Year 2000 preparedness, includes responses from information technology
directors and managers of 144 major U.S. corporations across all major
industrial sectors and 17 federal, state, and local government agencies. It is
carried out by Rubin Systems, Inc. for Cap Gemini America.
In spite of the persistent incidence of Year 2000 failures, IT managers of the
nation's largest corporations report improved performance in meeting Year 2000
deadlines. While 92 had reported increases in "milestone slippage" both in
December and May, only 81 percent are now experiencing an accelerated incidence
of missed deadlines.
A growing proportion of corporate America views Year 2000 readiness as a
competitive advantage. The percentage of firms likely to incorporate Year 2000
compliance into their marketing messages has increased since December from 65
percent to 89 percent.
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(R) toolset has already helped
more than 400 businesses worldwide address Year 2000 issues on more than 4
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, Inc. is an information technology (IT) and management
consulting services leader with 4,500 employees at 35 locations in the United
States and 1998 revenues of $623 million. Cap Gemini America offers full
life-cycle services based on industry-specific expertise in the areas of
applications management, enterprise resource planning, Enterprise
EffectivenessSM, customer relationship management, Year 2000, and management
consulting through its Gemini Consulting division. It is part of the $4.4
billion Cap Gemini Group -- Europe's largest IT services and business
consulting organization that was recently named "European Company of the Year"
by the European Business Press Federation. Cap Gemini's 40,000 employees in 20
countries design and deliver strategic change through ideas, people, and
technology. Visit Cap Gemini America on the Internet at www.usa.capgemini.com.
_________________________
"We found that the earlier a company started its remediation work, the less
optimistic they were of completing it on time." - Cap Gemini, fall 1998 |
