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January 8, 2000

Experts Puzzled by Scarcity of Y2K Failures

By BARNABY J. FEDER

Whether it is with scorn, anger or resignation, most computer experts and Year 2000 program managers brush off suggestions that they overreacted to the Y2K threat, taken in by computer companies and consultants positioned to profit from fear.

Still, like the skeptics, many wonder: How did countries that started so late -- and appeared to do so little -- manage to enter 2000 as smoothly as nations like the United States and Britain that got an early jump?

"That question is plaguing all of us, although some people won't admit it," said Maggie Parent, Morgan Stanley Dean Witter's representative to Global 2000, an international banking group formed to coordinate and stimulate Year 2000 work. "We expected there to be some significant blowouts."

A World Bank survey published last January concluded that just 54 of 139 developing countries had national Year 2000 programs outlined and only 21 were actually taking concrete steps to prepare.

Japan, China, Italy and Venezuela showed up as high-profile question marks in various studies. Paraguay's Year 2000 coordinator was quoted last summer saying the country would experience so many disruptions its government would have to impose martial law. Russia, Ukraine, Belarus and Moldova were seen as so risky that the State Department issued travel advisories in November and called nonessential personnel home over New Year's.

So what accounts for the surprisingly quiet rollover? Computer experts cite several factors. Even they may have underestimated how hard many countries worked in the last few months, when the problems were better understood, and how much help came from others that started early. And in many cases, assessments of overseas readiness were based on scarce or vague data.

But the simplest if most embarrassing explanation is that the some public and private analysts who testified before Congress and were widely quoted overestimated the world's dependence on computer technology. Most countries had much less to do to prepare because they are far less computerized than the United States. The computers they do have are much less likely to be tied together in complex systems and are often so old that they run much simpler software, according to Louis Marcoccio, Year 2000 research director for the Gartner Group, a technology consulting firm.

At a briefing last week on why Pentagon analysts overestimated the risks in many countries, Deputy Defense Secretary John Hamre said, "If we had a failing, it may be that we extrapolated to the rest of the world the kind of business practices that we have developed here."

Once adjustments are made for technology dependence, some analysts say, the investment of the United States and other pacesetters in Year 2000 preparations was not that far out of line with those that started late. But the figures from many countries are so unreliable that it is hard to be sure. Russia, for example, is estimated to have spent anywhere from $200 million to $1 billion.

Mr. Marcoccio suspects the lower figures are closest to the truth but he adds that based on the government's estimate that the United States spent $100 billion, "If Russia spent $400 million, they spent proportionally more than the United States, because the United States is 300 times more reliant on computers."

Such assessments lead down a pathway that only a statistician could love. Use Gartner's estimate that the United States spent $150 billion to $225 billion, and the comparable Russia investment jumps to a minimum of $500 million. Tamper with Gartner's guess that the United States is 300 times as computer-dependent, and figures dance another direction.

But nearly everyone agrees that the figures for the United States include substantial sums toward preparations abroad by American multinationals. Motorola said its $225 million Year 2000 budget included not just repairs at its overseas factories but, for example, helping its Asian suppliers pinpoint potential Year 2000 flaws. It also paid overtime for support that helped paging and radio networks in Italy function flawlessly over New Year's.

The federal government picked up part of the tab for foreign nations. To jump-start lagging nations, the government paid for many of them to send representatives to the first United Nations meeting on Year 2000 in late 1998. It distributed hundreds of thousands of CD's in 10 languages providing background and suggestions for how to organize Year 2000 projects. More recently, the Defense Department provided $8 million to set up a joint observation post in Colorado as insurance against miscommunication that could lead to missiles' being launched.

"We got a lot of free consulting from the United States and agencies like the Inter-American Development Bank," said Rodrigo Martin, a Chilean who headed a regional Year 2000 committee in South America.

Such aid played a bigger role in helping late starters to catch up than most people realize, some computer experts say. As John Koskinen, chairman of the President's Council on Year 2000 Conversion, sees it, hype about the magnitude of the problem misled fewer people than hype about the impossibility of getting it fixed.

"This was a process that could move faster than the preparedness surveys," Mr. Koskinen said, noting that alarming press releases and testimony frequently relied on research that was obsolete within weeks.

Del Clark, who led the Year 2000 program at Phillips Petroleum, concurred, saying: "China was the big question mark for us. Part of what happened was that they were working hard late in 1999 and the status information was out of date."

It helped that repair efforts became less expensive toward the end because of the experience gained by those who did the work early and the tools developed for them, according to Brian Robbins, senior vice president in charge of the Year 2000 project at Chase. In addition, Mr. Robbins said, it turned out that some countries like Italy had done more work than reported.

By 1998, the pacesetters were far enough along for a sense to develop that others were lagging, and fears about the consequences began building. There were extenuating circumstances in some cases, like the economic slump in Asia, and many realized the problems would not be as daunting as in the United States. But with time short, industry groups like Global 2000 and a few countries began trying a variety of tactics to accelerate Year 2000 preparations.

"People outside of information technology don't realize how incredibly mobilized the world became," Ms. Parent said.

Still, many of those most familiar with the relative preparedness and spending levels in many foreign countries wonder whether it will be possible to figure out why things ended up going so smoothly.

Information was always hard to come by and hard to compare since sources varied so widely in what costs they attributed to Year 2000 work. In general, foreign countries have not included labor costs in their Year 2000 figures while the United States and Britain have, but practices have varied widely.

Now that Year 2000 has arrived, the pressure to sort out such data is disappearing rapidly.

Still, questions about the transition will not go away. What actually happened might figure in insurance lawsuits because if courts were to decide insurers were liable for the money companies spent to avoid problems, the insurers would undoubtedly cite the success of laggards and low spenders as a sign that budgets for American companies were needlessly bloated.

More broadly though, comparing preparations and the results achieved may shed valuable light on cultural differences in how technology is set up and managed, according to Edward Tenner, author of "Why Things Bite Back." That in turn could help society deal with problems like global warming and the proper use of biotechnology. "We really need to look at the sociology of computing in detail," he said.

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-- Linkmeister (link@librarian.edu), January 10, 2000.

I just wonder - How much of the world is running in manual mode today?

And when does the fatigue factor set in?

IF (big if) there is a fair number of embedded processes running in manual control mode than any failure could be construed as human error or operator error and not Y2K computer error.

-- Bill P (porterwn@one.net), January 10, 2000.

Just what is manual mode with some of these systems? Frankly, all I can recall from the pre-rollover "analysis" we witnessed hereabouts, was that there was no way to run a refinery manually; or a sewage treatment plant (like Van Nuys'); or an electrical substation. I still pass by installations like this, and see no sign of anything happening "manually"?

Can someone int he field give me examples?????

Playing the "constructive crtic" this morning.

-- (squirrel@huntr.com), January 10, 2000.

Take the article at face value, like much of the establishment does 'cause it is the New York Times.

Question...how does this impact the cases where a company (like GTE )sues its Insurance Carrier for the cost of remediation under the "Sue and Labor Clause??" Was the repair REALLY necessary? Did it have to cost so much? Where is the evidence that but for the repairs, the company would be "Sunk??"

-- K. Stevens (kstevens@ It ALL went away ten days ago .com), January 10, 2000.