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To: Bucky Katt who wrote (2843)	9/1/1998 9:19:00 AM
From: TokyoMex	Respond to of 119973

PUBLIC FORUM Squashing the millennium bug By Tony C. Clawson & William a. Zucker, 09/01/98 By now most of us have heard about the potential impacts of the year 2000, or Y2K, problem. The so-called millennium bug - caused by designating years with two digits instead of four in computer programs - has been called the greatest crisis our computerized society has ever faced. Estimates within the United States alone approach $300 billion for the fix and an equal amount for litigation. Last month, President Clinton called for government agencies, public and private institutions, and businesses to work together to solve the Y2K problem. As a component of this, he has proposed ''Good Samaritan'' legislation that will ''guarantee that businesses which share information about [fixing the problem] ... cannot be held liable for the exchange of that information if it turns out to be inaccurate.'' Whether this legislation will be enacted is unclear. Neverthelesss, the president's remarks on the Y2K problem should prove beneficial on several levels. First, it should serve as a wakeup call to businesses that haven't dealt with the impending crisis. Second, and perhaps even more significant, it should prompt businesses that have a Y2K compliance program in place to reconsider how just how prepared they are. To date, almost all of the attention surrounding Y2K has been focused on the technological aspects of the problem. More recently, this focus has expanded to include the so-called embedded systems, date-sensitive chips whose potential malfunctions could impact everything from elevators to security systems. However, Clinton's call for better communication between organizations touches on a crucial and often overlooked facet of the Y2K problem. That is, in today's technologically advanced society, no business or organization operates in a vacuum. The failure of one business to respond to the Y2K problem could have serious consequences for those businesses with which it deals. It is estimated that a typical business controls about 25 percent of its critical resources. Such a figure is not surprising when one considers modern trends such as outsourcing and strategic partnering. But what is surprising is that a disruption of 5 percent of supply can cripple a business and trigger a chain reaction. Merrill Lynch recently published a survey of thousands of companies worldwide, who say they are reasonably confident of their own Y2K preparations, but are uncertain about their suppliers and customers. That statement ignores the interdependence that companies have on suppliers and customers. If a firm is damaged by supply-chain disruption because a supplier didn't deal with the Y2K problem, investors and creditors may sue management for breach of fiduciary obligations. Blind faith in the Y2K efforts of third parties will not be enough to demonstrate management's due diligence. One of the effects of downsizing is that businesses have few extra personnel to devote to managing third-party relationships. The result is that these tasks are either given to personnel who were never trained to manage business risks or are swept under the rug. To avoid these pitfalls, management must institute a process with third parties that is prioritized by risk, uses practical and legal carrots and sticks, and plans for contingencies. With the potential to cripple everything from computers to lights on Jan. 1, 2000, the millennium bug may make many businesses feel like they are entering the 20th century, rather than leaving it. Tony C. Clawson and William A. Zucker are with G&H Solutions LLC, a Boston-based consulting firm focusing on the business aspects of year 2000. Zucker also heads the litigation practice group at Gadsby & Hannah LLP. This story ran on page D D4 04 of the Boston Globe on 09/01/98. c Copyright 1998 Globe Newspaper Company.