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  1. Technology
August 25, 1998


By CBR Staff Writer

About a year from now, maybe even a little earlier if you’re pessimistic, might be a good time to liquidate some of your assets, stocking up on a few bars of gold and plenty of greenbacks, quid or whatever your local currency. And if you are a board level business manager, now might be a good time to get a Y2K lawyer. According to a new survey of 15,000 businesses and government organizations around the world, the transition to the new century is going to be a bumpy one. A baffling 23% of the organizations surveyed by Gartner Group, the first consultancy to make hay from the Y2K crisis, and the one that got the attention of the US Congress with its $600bn price tag to fix the world’s millennium bugs, still haven’t started their Y2K efforts. More than 80% of the companies that are dragging their heels are small companies with fewer than 2000 employees. By July 1998, when the Gartner survey was completed, only 15% of the organizations surveyed said that they had made sufficient application modifications to sustain their businesses. (That’s not the same thing as fixing all applications, but rather fixing critical applications.) Gartner expects that 50% of the businesses and organizations the world over will reach this level of Y2K sustainability, although these organizations will be heavily concentrated in the United States, Canada, and in several European countries (the United Kingdom, Sweden and Holland are furthest ahead on their Y2K efforts). In general, the banking and insurance industries have made the most progress, followed by high tech manufacturing and wholesale/retail distribution. Government, education, legal and medical institutions are woefully behind. The progress that companies have made, and the progress that they will try to make in the next year, is coming at a cost. According to Gartner, over 93% of the organizations surveyed had flat or reduced IT budgets this year. Rather than increasing their budgets to cover Y2K conversion costs, IT managers are apparently re-routing budget money from other projects. Gartner says that about 5% of the world’s aggregate IT budget was spent on Y2K projects last year. During 1998, that figure is expected to rise to 30%, and in 1999, it will rise as high as 44%. Most of that will cover escalating personnel costs and outside consulting fees, not new computers. This obviously doesn’t bode well for the world’s hardware and software vendors, who may be making hay with Y2K today, but who will have to live off it in the final months of 1999 as business all by dries up. But that’s not the worst of it. The real frightening statistic is that half of the companies surveyed, well aware that they have already run out of time to do the job right, are frankly admitting that they are not going to test any of their code, but take it straight into production as changes are made because time and budget constraints make it the only practical alternative to closing down.

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