All Okay On Y2K? Not Yet White House Urges Small Businesses to Make Needed Repairs -- and Soon

By Stephen Barr Washington Post Staff Writer Monday, September 27, 1999; Page F05

For Tim Sayers, the technology director for a chain of Washington and Baltimore sporting goods stores, Y2K fixes will cost about $30,000.

For Jeff Hawk, who runs a metalsmithing operation in Montana, it meant spending $75,000 on a new computer system.

But both were willing to pay, knowing that the investment in identifying and fixing year 2000 systems glitches now is small, compared with fixing them later.

That's the message that came out of the White House this week. Worried that up to 800,000 small businesses nationwide do not intend to check their computers for potential year 2000 problems, the White House's Y2K trouble-shooter warned Wednesday that small companies adopting a "wait and see" attitude toward Y2K may be putting themselves in economic jeopardy.

Congress approved a special loan program to help small businesses fix and upgrade computer systems, but only 81 companies have applied for the loans since they became available through banks and the Small Business Administration in April, the official said.

"It is not too late to start to get Y2K-ready," said John A. Koskinen, chairman of the President's Council on Year 2000 Conversion. "There is great risk in waiting."

Koskinen said companies that wait to see which systems malfunction because of Y2K may find themselves "at the end of a very long line" as they try to obtain software repairs and upgrades following the calendar change to 2000. Small businesses could wait days or weeks for the computer fixes to be made and, if faced with cash-flow problems, may find themselves forced to close, he said.

A Senate report, issued Wednesday by Sens. Robert F. Bennett (R-Utah) and Christopher J. Dodd (D-Conn.), suggested that the nation will not face widespread Y2K problems. "This is sort of a fender-bender. . . . We don't see any major wrecks," Dodd said.

But Dodd said the health care industry, including nursing homes and doctors offices, health and welfare programs administered by states, and some foreign nations remain at risk for serious Y2K breakdowns. He mentioned China, Italy and Russia as countries "still lagging behind."

The year 2000 problem stems from the use of two-digit date fields in many computer systems, which may cause the systems to interpret "00" as 1900, not 2000, and malfunction or shut down on Jan. 1.

Koskinen's remarks came at a "100 Days to Y2K" event that featured representatives from a small retail business that operates apparel and athletic footwear stores in the District and Baltimore, a small manufacturer in Montana and a small Texas school district.

All endorsed Koskinen's message that small organizations can assess and fix Y2K problems in the time remaining this year. Koskinen said Y2K information could be obtained on the Internet (www.y2k.gov) or by calling 1-888-872-4925.

Sayers, the technology director for Levtran Enterprises' Downtown Locker Room stores, described a seven-step plan developed with the help of the National Retail Federation, which determined that a telephone voice-mail system had to be replaced and that merchandising and point-of-sale software systems needed to be upgraded.

Hawk, president of Big Horn Bolt & Anchor in Billings, Mont., found he needed Y2K-compliant computers to win a contract with a large manufacturer. With the help of the Small Business Administration, he obtained a $75,000 loan and had a new system set up within three weeks.

The Hutto, Tex., school district's superintendent, Ernie Laurence, and district technology coordinator Denise Jackson completed the bulk of their Y2K work in about 50 days. The school district, near Austin, obtained Y2K readiness information from about 1,000 vendors and has drafted school contingency plans for food and transportation in the event of unanticipated Y2K problems.

"One hundred days is plenty of time," Jackson said.

) Copyright 1999 The Washington Post Company

http://www.washingtonpost.com/wp-srv/WPlate/1999-09/27/023l-092799-idx.html

-- Homer Beanfang (Bats@inbellfry.com), September 27, 1999

Answers

"...There is great risk in waiting." ... Koskinen said companies that wait to see which systems malfunction because of Y2K may find themselves "at the end of a very long line" as they try to obtain software repairs and upgrades following the calendar change to 2000. Small businesses could wait days or weeks for the computer fixes to be made and, if faced with cash-flow problems, may find themselves forced to close, he said. ...

Uh... why does this logic not follow for personal preperations?

Shakes head... muttering... "idiot bureaucrats...!"

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), September 27, 1999.

Diane,

Don't you worry your pretty little head about it.

-- Mara Wayne (MaraWayne@aol.com), September 27, 1999.

That reads like staggering condescension, Mara. Diane's comment seemed pretty straight forward to me. You could answer the question. Why is govt-PR urging businesses to prepare acceptable and prudent, while personal preparation is spun as panic? Then too, if in a critcal thinking mood, ponder this: Who might stand to benefit from admonitions against personal preparation?

Ad hominem arguments are easy. You obviously have a good brain. Sad to see it used so much for unproductive sniping.

--She in the sheet, upon the hilltop,...

-- Donna (moment@pacbell.net), September 27, 1999.

No, Donna, believe that was staggering sarcasm and cynicism. Cynicasm.

-- lisa (lisa@work.now), September 27, 1999.

Or as John Koskinen said earlier this year:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000n8Y

[snip]

We are running events in the United States focusing on small businesses, trying to provide them technical information, trying to encourage them to take action in the face of what we find increasingly is a position where many of them are saying they're simply going to wait, see what breaks, and then they will fix it once it's broken. We are trying to tell them that that's a very high risk roll of the dice, because when they go to get the fix, whether it's an upgrade in their software or a replacement for the software or the hardware, it will be obvious what the fix is, everyone will know how to do it, but the risk is, they will be at the end of a very long line of other people who waited to see what broke and then decided to fix it. And the fix will work just fine when it arrives, but it may not arrive until March, April or May of the year 2000, and these companies and governments and those who decided to wait and see may find that they're going to be severely challenged in continuing their operations while they're waiting for that fix to arrive.

[snip]

-- Linkmeister (link@librarian.edu), September 27, 1999.

Another new article about Y2K and small businesses:

http://www.techweb.com/se/directlink.cgi?VAR19990927S0023

[Fair Use: For Educational/Research Purposes Only]

September 27, 1999, Issue: 1524

Section: Feature

Y2K Looms Over Small Business -- Deadline 2000: You have 95 days to get clients ready for the change of the century

David Myron

How's this for irony: The fastest-growing market segment-the small- business arena-is also the slowest to adopt Y2K remediation plans. According to published reports, 14.5 million American small-business owners employ more than 50 percent of the private workforce, generate more than half of the nation's gross domestic product and are the principal source of new jobs in the U.S. economy. With growth like that, you'd think that these entrepreneurs would be attuned to the need to prepare for the turn of the century. But that's not so.

"Most people really don't believe there's a problem," says Jerry Duffy, owner of Abel Computer Repair, a San Carlos, Calif.-based reseller. "They think it's sort of a scam." Bill Salagovic, president of Dimensional Data Co. in Pueblo, Colo., agrees: "I see a lot of small businesses taking a wait-and-see attitude. Many are saying, 'I'll just pull out the plug' or, 'It's not going to be as bad as everybody says.'"

Those businesses are not isolated. A recent study by the National Federation of Independent Business reports that 40 percent of small businesses in the United States are not prepared for Y2K. The study also indicates that one-third of all U.S. small businesses plan to do nothing to prepare for the Y2K computer glitch. This is not solely an American attitude. More than a quarter of Europe's 1.1 million small businesses are not ready for potential Y2K computer problems, according to a study by research firm Banner Corp. In the survey of information technology managers at 1,035 companies, 26 percent said they were not ready for Y2K. The survey, involving employers from eight countries of companies with 10 to 99 employees, found that 72 percent believe the millennium bug will only cause minor disruption.

Duffy is all too familiar with the denial stage of the potential impact of the millennium malfunction. While he advertises that he is a Y2K consultant, only 20 percent of his clients have secured that part of his expertise. As for the remaining 80 percent, he says they aren't even making an effort to fix the problem. "What you're watching is a train wreck in slow motion," Duffy says.

Small Business Lags Behind

Outside the small-business market things might not be quite that bad, says Dale Vecchio, research director covering Y2K at the Gartner Group Inc., Cambridge, Mass. Vecchio remains optimistic: "We look at 87 different countries and 27 different industry sectors. The U.S. is farther along than any country, but it is the most technologically dependent of any geography." He says he doesn't expect any long-term power outages, although there may be some spotty electricity for three to five days. "Gartner Group remains optimistic across all indices and geographies," he says, but adds, "The majority of small businesses haven't finished the correction phase. It is the farthest behind of all that we track."

"In this country, we're going to have disruptions; however, they're going to be small-scaled and localized," says Don Wynegar, director of the Y2K outreach program at the U.S. Department of Commerce. His biggest concern is paranoia. "If individuals take all their money out of the stock market or their banks, it may cause financial harm on the economy. People need to take prudent and logical steps and not overreact."

Small to midsize government entities are most likely to suffer from the Y2K computer glitch, according to Dan'l Leviton, software architect at Symantec Corp.'s securities and assistance unit. "Many local and some state level government entities are way behind. They are chronically under budget, and they don't have the luxury of thinking ahead very far," he says.

Perhaps small to midsize government entities can take advantage of the Cupertino, Calif.-based software company's Y2K software tool, Norton 2000 Version 2.0, which identifies Y2K threats to small business' critical systems. Information about the tool can be found at the company's Web site (see graph, left).

Not Just a Technology Problem

It's common sense that the best defense against any potential problem is preparedness. But with so many businesses taking a laissez-faire attitude toward Y2K, when and if a real problem does occur, many observers fear small and midsize business (SMB) owners' reactions will be worse than the problem itself. For example, if small businesses don't notify their banks of their Y2K remediation plans, they may be denied bank loans for three to six months. That could be more damaging than the actual computer glitch. Vecchio claims one quarter of U.S. small-business loans have already been denied this year, because small businesses have not presented Y2K plans. SMBs also need to remember to share their plans once they are completed. That will help build relationships and put customers, partners and suppliers at ease.

Dimensional Data's Salagovic took it a step further. He posted his company's Y2K preparedness plan on the company's Web site, sent out letters to customers and conducted seminars to inform partners and customers of the plan.

VARs should look at the SMB segment as a potential paycheck, but they must be careful to protect themselves as well. Salagovic suggests carefully wording Y2K documentation to SMB customers. One example: "The equipment is compliant with a specific vendor's standards and specifications for software." There is no guarantee, implicit or explicit, from his company.

What do we have to thank for the lagging Y2K preparedness among small businesses? Some pundits suggest greed, as vendors with Y2K solutions didn't have enough time to address all markets, so they went where the money is-to large corporations. Vecchio, however, blames it on laziness. "Procrastination is one of the cornerstones of the human spirit," he says.

[snip]

----------------------------------------------------------------------

-- Linkmeister (link@librarian.edu), September 27, 1999.