More tidbits....
In Year 2000 Computer Fix, Major
Corporations Increasingly Underestimate Costs, Miss Deadlines, and Experience Breakdowns
NEW YORK--(BUSINESS WIRE)--July 20, 1998--
Of 12 Sectors Assessed, Survey Ranks Utilities, Health, and
Transportation As Least Prepared;
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.
CONTACT:
M. Booth & Associates
Steve Vitoff, 212/481-7000 ext.137
stevev@mbooth.com
Seth Werlinsky, 212/481-7000 ext.126
sethw@mbooth.com
Cap Gemini Web Site:
www.usa.capgemini.com/y2k
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