http://www.amcity.com/memphis/stories/1999/12/27/focus1.html

Now, we wait; Y2K preparation has businesses ready for multiple disasters

Theresa Bechard

With about a week to go before the much-dreaded Y2K bug makes its debut, most industry watchers agree there's not much left that businesses can do to prepare.

But on the whole, Memphis companies seem to have dutifully taken the necessary steps to thwart computer glitches that might arise from the date change.

The problem stems from the old practice of using two digits to represent a year in computer programs. The fear is that computers and other equipment that depend on microprocessors will misread as 1900 the "00" that will pop up to represent the year 2000, leading to system malfunctions.

SCB Computer Technology has helped several local businesses prepare for Y2K and company officials say they don't expect much of a negative situation locally.

"The preparation throughout the business community here in Memphis is good," says Cabell Whittum, SCB's director of projects and services. "There's been a tremendous amount of money spent on the problem. I'm very proud of the effort I've seen, as should everyone involved in this Y2K solution."

Optimism about effective efforts to stave off any computer problems is prevalent not only throughout the business community but is also expressed by those most in the know about the status of businesses' readiness for Y2K -- the programmers in charge of rectifying any non-compliant computers.

In fact, 39% of technology experts responding to a recent national poll believe Y2K is a non-event but still plan to have some extra food and cash at home for the New Year's weekend. An additional 36% agreed Y2K amounts to a non-event and do not plan on stockpiling supplies.

The poll showed most technology experts were Y2K optimists, as respondents expect that about 2% of the critical computer systems in their organizations may malfunction or fail because of Y2K glitches.

The survey, based on 1,212 computer experts who work for the financial industry, large corporations and governments, was conducted by CIO magazine, the information systems Audit and Control Association and economist Ed Yardeni's Y2K Center.

Such rosy predictions on Y2K are echoed within the Memphis business community, which appears to be prepared to make a seamless shift to the 21st century.

Drexel Chemical Co., which manufactures, formulates and markets agricultural chemicals, has spent about $100,000 to change software packages and update computers, says Leigh Shockey, Drexel's president and CEO.

"We've covered everything and are ready," she says. "Fortunately, we didn't wait until the last minute. It forced us to go ahead and make changes and updates, but we've made changes that will make us more efficient anyway."

All of Drexel's machinery has backup generators in the event of a power outage on Jan. 1, Shockey says.

Any computer glitches that Drexel's critical vendors may have will not cause many setbacks to the company, she says.

"Given that most of our customers are distributors and farmers, computer problems might slow us down, not shut us down," Shockey says.

But unlike Drexel Chemical, ResortQuest International's preparedness for Y2K was essential, since the company's Web site is an integral part of the business.

About five months after ResortQuest went public in May 1998, the company began addressing Y2K issues and has spent about $600,000 to date for upgrades and equipment replacement.

As a vacation property management company, ResortQuest assigned a Y2K coordinator at each of its 32 resort destinations.

"Our situation is unique for a couple reasons," says Fred Farmer, ResortQuest's chief information officer. "We have all the traditional Y2K issues to address, with PCs and software, and that was compounded by the fact that it was geographically dispersed from Hawaii to Nantucket."

ResortQuest also underwent a certification phase to document that a formal Y2K remediation and testing phase had been completed to protect against litigation, he says.

"Most companies don't have the certification phase," Farmer says. "We did it because we're entrusted for managing properties for other owners and we also have guests who are staying at our properties."

While businesses may have ensured their systems are Y2K ready, systems or vendors upon which they rely are still a major concern, says Jeff Crenshaw, president of Continuum.

Continuum, which conducts business continuation planning, has been much busier because of Y2K, he says.

"The biggest concerns with businesses are problems they can't control themselves," he says. "Most of them have mitigated the potential loss with buying something to back up failed systems or with work-around procedures. Even if nothing happens Jan. 1, most of these businesses are better prepared for a business interruption of any type, whether it's Y2K or an earthquake."

One of Continuum's local clients has even hired the firm to be on-site on Jan. 1, equipped with satellite and cell phones and a few consultants to implement a contingency plan.

But smaller companies that don't have the money to invest in on-site consultants and extensive computer upgrades are the most vulnerable to possible Y2K ills, according to a recent study by the National Federation of Independent Business Education Foundation.

The study found that about half, or 1.5 million, of the nation's small businesses are unprepared for Y2K.

Small businesses throughout the world have shown to be at risk for disruptions from Y2K, and Memphis is no exception, Whittum says.

"With small businesses, the cost is a deterrent across the board," he says. "Your exposure to risk is measured by the amount of funds you allocate to mitigate those risks, and a lot of companies have exhausted their budgets."

CONTACT THERESA BECHARD at 259-1729 or by e-mail at tbechard@amcity.com

-- Uncle Bob (UNCLB0B@AOL.COM), December 27, 1999