New Zealand’s IT preparedness for the year 2000 is a mish-mash, but the lack of it is already causing problems.
Of the 110 public and private organisations that responded to Coopers & Lybrand’s 2000 Preparedness Survey, nearly 25% reported problems, up from 11% a year ago. Examples include the local authority that could not issue licences past 1999, a manufacturing company whose asset-lease periods could not go beyond 1999 and a travel company that cannot take bookings for the 99/00 season.
Respondent IT managers say nearly half their systems will experience failures by January 1, 2000, if no remedial action is taken. The survey suggests the average cost of fail-safe remedies will be about $500,000, with individual estimates ranging from $1000 to more than $12 million. Philip Davies, a partner at Coopers & Lybrand, says that not only telecommunications, banking and insurance companies face hefty bills. Retail, health, agriculture, manufacturing and central government organisations are all predicting costs in excess of $1 million. Overall the survey indicates that extra costs to New Zealand business will be at least $250 million, and could be nearly twice that.
Only 75% of respondents could say when they planned to have all corrections installed and tested. Of those who had set a target date, 50% said they would have their systems fixed by July 1998, and most of the rest by March 1999.
A brief sampling by Computerworld showed a more sanguine situation, but still considerable variation in the degree of forward-planning. At the upper end of the scale was Telecom; at the other were NZ Insurance and Cardinal Network, with Fletcher Challenge between.
Telecom, which recently announced it will be spending $58 million on a corporate-wide fix, only started looking at the issue last year, and has just started work. Completion is scheduled for the end of 1998.
NZI identified the issue in 1991, and bundled its fix with a general system upgrade in 1994-95, when its mainframe was changed from a proprietary system to Unix/Oracle. Minor systems and data-suppliers’ systems are still being worked through, but Roger Martin, NZI’s Assistant GM Information Services, says all but some ‘rats and mice’ on the suppliers’ side will be fixed by the year’s end.
But he warns: ‘Don’t be complacent when you are compliant - keep checking that someone hasn’t changed something somewhere.’
Cardinal Network’s systems are written in Unisys LINC, so adding the extra two digits only meant recompilations. Cardinal wrote a tool to identify where changes were needed, and another to test systems.
George MacGibbon, Fletcher Challenge’s corporate IT Manager, does not believe the year 2000 will be a major problem for his company, or that the cost will be high, but did not put a figure on it.
“All operating companies are aware that they have a responsibility to make sure that their operations continue past that date,” he says dryly.
Process-control systems have been given particular attention after Comalco’s potlines shut down on February 29 last year.
“On a scale of 1-10 of preparedness we are about an eight,” MacGibbon says. Colin MacKinnon, a partner with the Deloite Touche Consulting Group, which is working on the year 2000 problem with a number of government departments and big companies, says some companies have not considered the competition for scarce resources. COBOL programmers are already being offered $120 an hour.
He says all companies need to upgrade by the end of 1998 so that at least the end-of-year run is done before the point of no return. For some, the shortage of time means it will be a matter of deciding which systems must be fixed and which can be run with some risk.
“I wouldn’t see any wholesale catastrophe,” he summarises, then adds, “but I see a lot of consultancy work in the last six months [of the 1900s] and in the year 2000.”