By Joanne Wallen
UK businesses are still nowhere near being Year 2000 compliant, European businesses are even further behind, Economic & Monetary Union will suffer and senior management is still not treating this as a serious business issue rather than a technology problem, according to UK science and technology minister Ian Taylor. With some 20 months left before the end of 1998, when companies should have their amended systems up and running in order to test a full year’s cycle, the minister said categorically that some people will go out of business as a result of non-compliance. He was commenting on results of a survey carried out for the Department of Trade & Industry’s Taskforce 2000, a body set up last year to raise awareness of the problem that most computer systems geared to using two digit dates will have problems handling dates of 00 (CI No 3,030). The survey was a follow up of one carried out with UK businesses last March by PA Consulting Group, to see how much progress has been made since that time, and the results indicate alarmingly little has changed. The same 535 business and technology directors were questioned this time about the awareness of the problem within their organization and what action they had taken so far. It is generally accepted that fixing the millennium problem involves three phases, the first being to carry out a complete audit of all programs to ascertain the scale of work to be carried out. The second is to carry out work to fix the problems, and the third is to test thoroughly all amended or new programs. In the March survey, only 8% of organizations had completed the initial audit, and this had risen only to 9% this time. Only two thirds of organizations are even in the audit phase and only 42% of companies have a budget to do the audit. The survey also showed that while senior management’s understanding of the problem has increased, only 28% fully understand the implications to their business, against 15% last time. Robin Guenier, executive director of Taskforce 2000, says at this late stage, with the obvious time and resource constraints, we cannot hope to have a total solution. He says the big issue now is for companies to prioritize, to ensure essential programs are made compliant in time, and to shift resources from other projects. The problem here is that only senior managers have the ability to set these sort of priorities, and therefore it is essential that they are fully aware of the problems and fully committed to resolving them in time. Guenier also believes it is the responsibility of the technology industry as a whole to free up resources from other projects so that Year 2000 has top priority. Taylor said industry has to take responsibility. Don’t look to government to bail industry out, he said, the issue must be dealt with by the private sector. The minister says government’s task is to raise awareness and sponsor joint initiatives with industry. It may look to offering training to help firms gain the necessary skills to cope with the problem, but it will not make tax payers money available to bail people out, he said. Taylor says those companies where the chief executive is fully aware of the problem and taking responsibility are also those making good progress. He cites British Telecommunications Plc as an example. The telecommunications giant has apparently threatened to dismiss managers found to be negligent in working towards Year 2000 compliance. To try to bring the message home once and for all, the minister will be writing to 100,000 UK chief executives to impress upon them the urgency and seriousness of the situation. He will set out for them a check-list of seven vital questions they need to know how to answer about their system’s ability to handle the century date change. The questions are these. Do you know: the effect it can have on any computer or equipment control system? The full operational, financial and legal implications of failing to cope? The impact on you of inaction by your suppliers and customers? Have you: appointed a first class project manager reporting to the board? Started a full systems audit, an impact analysis and a priority plan? Decided how to satisfy your customers and shareholders that your systems are reliable? Allocated at least 20% of your computer budget for the next three years to resolving this? Ian Taylor knows himself how difficult it can be to impress the situation upon senior management. He admits that when he first raised it to government 18 months ago, people thought he was loopy. He does not seem to be having much more luck convincing the powers that be in the rest of Europe either who seem to be preoccupied with changing their systems for Economic & Monetary Union, but what Taylor says they do not seem to realise is the impact that non Year 2000 compliance will have. Will a company that has corrected its systems be prepared to do business with one that has not made the effort to comply? he asks. I am sure that they will not. The same applies to the European market, he says, in that countries whose systems are compliant will not want to trade with those whose are not. Guenier says the addition of single currency system changes means that companies are going to have to set even tighter priorities on workloads over the next couple of years. He admits there will be a lot of pain suffered as a result, but says businesses simply do not have a choice. Taylor is looking to professional bodies such as the Institute of Chartered Accountants to impose regulations on companies, such as the need for disclosure to shareholders of whether systems are or will be compliant, and what action needs to be taken. One member of parliament, David Atkinson, is hoping to get a Private Members’ Bill through parliament amending the 1985 Companies Act, to force companies to assess the millennium compliancy of their systems and their directors to propose a plan of action to shareholders. However Taylor said that while he agreed with the bill in principle, and he was pleased it had raised the profile of the issue, he doubted it was practicable in the time-scale, and seemed to suggest it was unlikely to be passed. The UK government itself has its own problems. It has completed its audit and every department is mandated to have the job done by the end of 1998, but the problem will be continued vigilance after that date to ensure that systems are not infected by other noncompliant systems. Taylor threw the sum of 1bn pounds to fix all government department systems into the air to attract attention he said, but he is certain the figure will be high. Management must take responsibility now, he says. Companies will have to redeploy resources from other projects to sort this out, if they want to continue to trade beyond the Year 2000.