8 of 10 U.S. Companies Expect No Major Y2K Woes

With a hundred days to go, 80% of American companies say they are ready for the Y2K rollover, and the Y2K checking has had the beneficial effect of helping corporate America to see the importance of IT to their businesses

U.S. corporations are ready for the year 2000 date rollover, and more than ready to move on to other projects, according to findings from the latest Y2K survey, "100 Days to Go," from New York-based Cap Gemini America Inc. and Rubin Systems Inc.

And thanks to the all that work they had to do, corporate America now sees the importance of information technology, the companies concluded.

Eight out of 10 large corporations anticipate "no significant business risk" after their systems switch over to Jan. 1, 2000. However, 82 percent of these firms have already experienced Y2K-related failures, up from 75 percent in August, Cap Gemini said. Fifty-six percent of the failures were caused by systems that hadn't be upgraded or replaced, followed by 44 percent that already were Y2K-fixed.

IT directors and managers from 156 companies from financial services, manufacturing and insurance participated in the study.

The most common failures involved financial miscalculations, followed by processing disruptions, logistics/supply chain problems and customer service problems, said Jim Woodward, Cap Gemini's senior vice president.

While one "can't say everything is fine and rosy," many companies are preparing for potential Y2K glitches, designing crisis centers and planning contingency strategies, he said.

According to research and consulting firm Cap Gemini, companies also plan to put a freeze on implementing new hardware and software until the rollover.

Other findings from "100 Days to Go" include:

* 56 percent of IT directors and managers expect their critical systems to be 100 percent Y2K-compliant by the end of 1999, up from 48 percent in August. Thirty-eight percent expect 76 percent to 99 percent of their systems will be Y2K-ready, while the remaining 6 percent of companies will wrap up testing on half to three-quarters of their systems by year's end.

* 82 percent don't anticipate noncompliant systems to cause a "significant business risk," while 12 percent believe noncompliant systems will cause a significant risk. Six percent weren't sure.

Meanwhile, top corporate executives are now seeing the importance in IT. Howard Rubin, chief executive officer of Rubin Systems, an IT consulting firm based in Pound Ridge, New York, said business managers are becoming more involved with IT projects and IT in general, taking control of operations and budgets. One dollar out of every four in corporate budgets is now being set aside for IT projects, Rubin said.

In addition, more business managers expect to be involved with their companies' Y2K crisis management centers. The survey said 88 percent of corporate managers will oversee these centers, up from 62 percent in May. Cap Gemini said 98 percent of large U.S. corporations have Y2K crisis centers.

Many major firms are looking to put the Y2K rollover change behind them, moving their resources to strategic, IT-based business initiatives, the survey found. Customer relationship management was cited as the most important focus for firms, followed by e-business, sales-force automation, enterprise resource planning and applications management.

According to the survey, Y2K work "inhibited progress" in many "IT initiative areas." Eighty-two percent of the firms said they deferred ERP projects for Y2K, followed by 78 percent who postponed applications management projects.

Other postponed IT programs include customer relationship management (25 percent), sales-force automation (22 percent), business-to-business e-commerce (18 percent) and business-to-consumer e-commerce (15 percent).

Companies surveyed said building an infrastructure to support e-business is their top priority for next year, followed by ERP (enterprise resource planning) software implementation, sales force automation, customer relationship management and applications management.

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