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To: Brewmeister who wrote (20932)	7/22/1998 9:02:00 AM
From: baggo	Respond to of 31646

More Tidbits: Year 2000 budgets shouldn't end in 2000 William Ulrich I had a chance, while on the speaking circuit this spring, to query more than 1,000 IT and business professionals on how far into the future their year 2000 budgets extend. About 5% said their year 2000 budgets extend beyond the end of the century. And well over 90% said their year 2000 budgets will dry up when the clock strikes midnight on Dec. 31, 1999. That revelation underscores one of the greatest myths surrounding the year 2000 problem -- that the work ends when the new millennium arrives. Nothing is further from the truth. Why will companies need to ensure that money is available for the year 2000 problem beyond 1999? One reason is that much of the work will remain unfinished at that point. The largest and supposedly best-prepared corporations in America won't come close to achieving year 2000 compliance by December 1999. As of January 1998, the Fortune 250 had, on average, spent 21% of their year 2000 budgets. Four months later, that group had spent 25%. That means year 2000 work within the Fortune 250 is progressing at a rate of 1% per month. Those companies will have spent less than half their year 2000 budgets when New Year's Day 2000 arrives. Much work will be left undone as we enter the new millennium. Project teams will continue to apply year 2000 fixes to systems that weren't corrected because trying to correct year 2000 bugs in a production environment will translate into major productivity losses for end users. Companies also will need to finish certification testing because latent bugs will likely show up for decades to come. But the ongoing process of fixing and testing systems is only part of post-1999 year 2000 budget requirements. In 2000, executives will need to deploy crisis management teams to address emergency system fixes, supply-chain failures and data corruption recovery efforts. Crisis management teams will prioritize problems that require business-oriented solutions (such as shutting down failed business units) even as they manage the invocation of contingency plans, provide litigation support and manage internal and external communication. Those teams, which must cross a variety of functional and business areas, will need to stay intact for several months if not years. Special situations directly related to the year 2000 problem will also generate budget requirements. For example, if companies around the world all decide to replace noncompliant PC hardware and software in 1999 -- which is unfortunately a direction that the industry is heading -- it's unlikely that enough hardware will be available to satisfy the demand. Hardware expenditures are therefore likely to spill over into 2000. A second hangover effect involves the year 2000 cleanup process. Undoing contingency plans, poor coding decisions, object code patches and a host of other temporary solutions will generate additional budgetary requirements. The biggest and most far-reaching expenditure, according to attorneys knowledgeable in these matters, will be litigation costs -- projected to exceed $1 trillion. Not allocating a year 2000 budget beyond 1999 is symptomatic of a larger problem. Many executives believe that year 2000 work will end at midnight on Dec. 31, 1999. For many companies, the real work may just be starting. Ulrich is president of Tactical Strategy Group, Inc. and executive vice president of Triaxsys Research LLP. He is co-author of The Year 2000 Software Crisis: Challenge of the Century and The Year 2000 Software Crisis: The Continuing Challenge. His Internet address is tsginc@cruzio.com.