Computer experts plan to stockpile food, water and cash before the Y2K bug bites

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http://www.theage.com.au/bus/19991005/A40341-1999Oct4.html

Standby for the Y2K bug debacle By BRIAN HALE NEW YORK, MONDAY Tuesday 5 October 1999

Most of the world's top computer experts plan to stockpile food, water and cash before the Y2K bug bites. But they are putting everyone else off-guard, lulling people into a false sense of security with their complacency and slackness.

Says who? The world's top computer experts, that's who. With less than 90 days to go until the clocks tick over to zeros, their "ill-preparedness, complacency and misplaced trust in suppliers" could be about to plunge business and consumers around the world into serious problems, according to the organisers of a global Y2K experts poll.

Even though 81per cent of the experts admit their organisations still are not ready for the date rollover, 91per cent are still optimistic in their overall assessment of Y2K and, say the poll's organisers, the experts' complacency may be compounding broader complacency. Only executives involved in Y2K preparations took part in the poll and the results left the organisers in an unusual predicament when the outcome was revealed at a New York press conference yesterday. The experts' overall view is extremely optimistic even though their answers to subsidiary questions suggest they should be feeling the opposite because many of their organisations are not ready for Y2K, others are falling behind in readiness efforts, many have not made or tested contingency plans and most have not really checked on their suppliers' Y2K readiness.

The results of the poll, conducted by CIO magazine, the Y2K Centre of Dr Ed Yardeni, Deutsche Bank's chief economist, and the Information Systems Audit and Control Association (ISACA) - a global information technology organisation with more than 20,000 members in 100 countries - almost left its organisers speechless.

Dr Yardeni, one of America's foremost Y2K experts, said he was puzzled that IT professionals were so optimistic about the impact of Y2K on their organisations.

"Many of them are not ready yet. They are clearly expecting a victorious outcome, which may be raising complacency levels so high that people will not prepare for any possible malfunctions and failures," said Dr Yardeni.

Organisers admitted that the poll of 989 organisations around the world (including 26 in Australia and New Zealand) might have been skewed towards optimism because it was skewed to the United States (61per cent of participants) as well as skewed to large organisations with more than 1000 employees (56.5per cent) and the finance sector (23.4per cent).

But despite this, and results that looked promising at first glance because 74per cent said they were between 76per cent and 99per cent ready for Y2K, said Dr Yardeni, ``the real shocker is that many organisations are falling behind schedule''.

``When the first poll was conducted in June, 52per cent expected to be done by now and 16per cent said they would need the fourth-quarter to become compliant.

``Now, 43per cent say they will not be finished until the last three months so they're cutting it very close. It suggests there is significant falling behind and a lot of organisations are playing it very close to the deadline ... yet there is more optimism than there was in June,'' said Dr Yardeni.

``We're also disturbed to see more than one in five are still waiting for mission-critical software that is Y2K compliant and remember, programs still have to be installed and tested as well as delivered.''

That aspect in itself prompts worry, according to ISACA's Mr Michael Cangemi (who also is executive vice-president and chief financial officer of the Etieene Aigner Group).

``The industry knows that 78er cent of the time, software is delivered late,'' said Mr Cangemi, ``so we're pointing out the experts' over-optimism without knowing why it exists.''

He's also really bothered by the poll's findings that one in three either are still formulating a contingency plan or do not have one, and a further 16per cent have not implemented a plan that is ready.

``It's amazing that so few companies have contingency plans at this stage even though all of us share a concern that there will be some surprise problems that pop up at the end for which you cannot prepare contingency plans,'' said Mr Cangemi.

His thoughts are echoed by CIO's editor-in-chief, Ms Abbie Lundberg, who is widely regarded as a leading expert on major technology and business issues and believes that even companies optimistic about their own preparedness should be contingency planning for problems with suppliers.

``Chrysler has 8000 outside suppliers and 2000 are mission-critical,'' said Ms Lundberg. ``General Motors closed 25 of its 29 assembly plants last year because there were strikes at two suppliers. That shows why people should be more involved in planning.

``Companies should be organising SWAT teams running scenarios and drills for contingencies because there's a large number of people who won't be completed by December 31st and our society is so interconnected it's inconceivable that there won't be interruptions to the flow of goods and services.''

Ironically, the polled experts' optimism extends to their vendors and suppliers. The experts believe that only 25per cent of their vendors are not ready for Y2K but they are taking it on trust - 69 per cent of large global companies simply sent questionnaires to suppliers and only 13per cent bothered to conduct on-site inspections.

Michael Cangemi says he is concerned that more companies are not verifying Y2K readiness. ``We (Etienne Aigner) are a vendor supplying approximately 70 major retailers and 1000 small retailers. I can tell you that the majority of our customers sent us questionnaires by mail. Only one major customer called to follow up on the information.''

Meanwhile, despite the optimism, the prospects for problems seem to be growing. A significant 30per cent of companies still have not completed their Y2K projects and are behind schedule, 12per cent now do not expect to finish until after the date change and 27per cent plan to finish their readiness in the next three months.

Ms Lundberg says she is ``alarmed at the number of companies that do not expect to complete their Y2K work before the end of the year. Of those that do expect to finish in time, entirely too many expect to do so at the eleventh hour. Given the business world's abysmal track record for technology project delivery, this does not bode well''.

Moreover, 40per cent of companies believe between one and 10per cent of their mission-critical systems might fail or malfunction as a result of Y2K and a small number think they will face failure of a large number of mission-critical systems.

The bottom line for Dr Yardeni, who has long-worried about a Y2K-induced recession, is that ``I can't moderate my forecast after the latest poll results, though I was hoping to do so but I'm hoping the next and final poll (in November/December) will be supported by a fast dash to the finish line''.

``We're all hoping the experts' optimism is justified but this is a race we all have to win together, not individually.''

The bottom line for the experts might be a little different. The poll results show that their office optimism is mixed with some home realism. Only a small number expect the power to go off and the telephone to be out of order but well over half admit they plan to stockpile extra food and cash at home.

-- Uncle Bob (UNCLB0B@Y2KOK.ORG), October 06, 1999

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