MUST-READ ON EUROPE! ROLE OF EUROPEAN BANKS IN CREATING Y2K AWARENESS AT SME'S.
REPORT Workshop on the Business Impact of the Year 2000 Computer Problem
SEE BOTTOM OF THIS LONG POST:
COMMENT JM: IMHO, EUROPEAN BANKS WANT TO ENHANCE WORLD-WIDE MARKET POSITION BY PUSHING THE EURO. BECAUSE OF THIS SELF-INTEREST, THEY ARE NOT PUSHING THE Y2K ISSUE AT SME'S AS HARD AS THE BRITISH AND U.S. BANKS.
Go to:
Report of the Workshop on business impact of the Year 2000 computer problem,
cordis.lu
Brussels, 22 October 1997
Chairman: Andrea Di Maio (European Commission, DGIII-Industry)
Rapporteur: Brian L. Rosser (BLR Consultancy Ltd)
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Some pieces:
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Despite the many initiatives evident across the Member States and business sectors, awareness is still patchy and preparedness even more so. There is therefore a need for action at all levels, including the European level. The meeting generated many suggestions which deserve further consideration, as well as a number of concrete proposals which could be implemented in the short term. These include:
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2. Welcome
The meeting was opened by Mr Paul Verhoef of the Cabinet of Mr Bangemann. He concisely set out the Commission's great concern about the Year 2000 issue while pointing out the need for realism in the face of the increasing frequency of media scare stories. Although the Commission cannot solve the problem itself, it has a role in helping to mobilise industry to solve it, especially in view of the parallel introduction of the common currency (the Euro) and of the potential impact of both issues on consumers. The Commission, with Mr Bangemann closely following progress, is very keen to identify and fulfil its role and to work with the Chambers of Commerce and other associations to create a multiplier effect.
3. Scope and Objectives
The chairman, Andrea Di Maio, presented a summary of the Commission's current view of the Year 2000 situation in Europe, and outlined its current lines of activity. Looking at the two factors of awareness of the problem and action to solve it, he noted (drawing on a recent survey of over 1,000 enterprises in Europe) that the former is growing, but at too low a rate, and is in any case not sufficiently matched by the latter. SMEs (Small to Medium Enterprises) in particular, are both less aware of the problem than large companies and, when they are aware, less advanced in their Year 2000 strategies and projects. Many companies also appear to underestimate the possible consequences to them, being more aware of the cost of Year 2000 compliance than of the impact of non compliance on their businesses.
The situation is complicated by the overlap with the introduction of the Euro. Although these are very different issues, both imply massive changes to IT assets within the enterprise. Year 2000 is an IT problem with impact on the business, while the Euro is a business issue with IT impact. For many organisations, there are clear potential synergies between some phases of the two projects. However, running them together to realise economies must be handled very carefully to avoid increasing risks.
At the national level, some Year 2000 initiatives can be cited which are already underway: Taskforce 2000 leading to Action 2000 in the UK, the Millennium Platform in the Netherlands, and Denmark's Year 2000 Action Plan being the most evident. In Austria a similar initiative is addressing the specific situation of SMEs. In addition, several Member States have issued guidelines for enterprises and administrations (Italy, Sweden, the UK, and Ireland), and these (especially Ireland's) were drawn upon in the preparation of the background document for this workshop.
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4. Year 2000 - The Impact on Business
Mr Jeremy Jennings of Arthur Andersen presented an overview of the Year 2000 issue from the point of view of the business enterprise and the auditor. He began by citing some data from recent reports (including "Year 2000 software time bomb", Arthur Andersen, July 1997) with the aim of putting the Year 2000 problem into perspective. Although surveys vary widely in their estimates, some sample figures give an indication of the scale of the problem. The inadequacy of industry's response to the problem is shown by the estimate (extrapolating from current data) that only 1% of companies will be fully compliant by the end of 1997, and only 50% by the year 2000. Awareness is weakest amongst SMEs, of whom only 5% consider that the problem applies to them - despite the fact that 95% of software currently in use is non compliant.
5.2. Raising awareness of the problem
The earlier observations that awareness of the Year 2000 problem is still too low - especially amongst SMEs - were confirmed by delegates representing chambers of commerce and other organisations. For many, Year 2000 is overshadowed by the parallel issue of the Euro, but even here preparedness is poor.
Experiences with various attempts at stimulating awareness amongst SMEs were reported. The main difficulty is in engaging the attention of management in the first place. The obvious method of mailshots backed up by seminars has proved unsuccessful. In Austria, for example, 20,000 mailings (under the Ministry for Economic Affairs' Committee 2000 initiative) resulted in only 60 responses and even fewer attendees at the seminars. Brochures and Newsletters from trade organisations tended to be better received, perhaps because managers habitually read this kind of literature and rely on it to keep informed. Websites have had mixed success: relatively few SMEs have access to the Internet.
8. The Banking and Investors' Perspective
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8.2. Financial industry
Clearing banks, merchant banks, dealers in stocks and shares, etc., have a clear business interests in both addressing their own Year 2000 problems and those of their clients. In relation to the latter, the greater source of risk is seen as lying with SME clients, since these are less aware and less prepared. In the US, banks in particular are taking action to spur their SME customers to action. In fact, the banks may be the main vehicle for this, in view of the close ties and dependencies they have with small businesses.
In Europe, however, there is little evidence that the banks have accepted that responsibility. At least, two UK banks, Barclays and NatWest, are addressing the issue: NatWest has issued a useful advisory booklet to its business customers. In the rest of Europe, the banks are publicising and supporting the introduction of the Euro, but appear to have done little or nothing about Year 2000 for their clients.
COMMENT JM: IMHO, EUROPEAN BANKS WANT TO ENHANCE WORLD-WIDE MARKET POSITION BY PUSHING THE EURO. BECAUSE OF THIS SELF-INTEREST, THEY SEEM NOT TO BE PUSHING THE Y2K ISSUE AT SME'S AS HARD AS THE BRITISH AND US BANKS. |
