From the February 1999 issue of Startups

The collapse of the economy. The end of democracy. Complete anarchy. Is this what we have to look forward to at the turn of the century? That's what some experts say. A computer glitch known as Y2K, or the millennium bug, could cause worldwide upheaval because governments, banks and businesses big and small aren't prepared for the moment the zeros roll over.

While the reality may not be that extreme, plenty of agencies and companies will suffer delays, if not losses, of vital information--losses that threaten your business's very survival.


Tina Gasperson (tinadee@netzero.net) writes about current events, technology and business. She's currently stocking up on M&Ms, just in case the chocolate industry is wiped out by the Y2K bug.

What is the Y2K bug, anyway?

Back in the dark ages of computer technology, memory was very expensive. To save space, PC programmers coded computer hardware and software to accept input of the last two digits of a year; the system would then automatically place a `19' in front of the digits.

Next year, when the PC (or its mainframe, or microchip) starts getting input that reads `00', it will interpret the data to mean the year 1900. Surprise! Suddenly, you haven't been born yet. Worse, your bank account hasn't been born yet, and the IRS is calling because you haven't paid taxes in 50 years.

Any business that relies on computers (with the exception of all you Mac users out there!) could go haywire if its hardware and software can't process millennium data correctly.

How can I prevent problems?

Several simple steps will make sure all systems are go. First, check your hardware using one of several free software programs downloadable from the Internet. Many of these quickies can fix the problem in a keystroke. (See "Cyber Solutions")

After making sure your hardware is Y2K-compliant, check your software. If you use prepackaged programs, back up all your data and test post-millennial operation. Enter imaginary figures into the programs, using dates in the year 2000, to see how the software reacts to processing millennium data. If your software passes this test, try a second check: Set the computer clock to one minute before midnight, December 31, 1999. Then use the software as you normally would. If any program malfunctions as the clock passes 12:00 a.m., stop and contact the manufacturer's technical support department.

If your company uses customized software, ask the vendor if it's Y2K-compliant. If it's not, have them test it and make any necessary repairs. Be sure to ask for a warranty that covers you if the program goes belly-up. If the vendor balks, it's time to consider another software manufacturer. Sure, changing your software is a major hassle--but better to deal with it now than see your business slam to a halt after the millennium.

Once you're in the clear, take steps to stay that way. Before you upgrade your hardware or buy new software, make sure the product is guaranteed to be bug-free after the millennium. Don't assume a product is Y2K-compliant just because it's new.

No sweat, right?

Well, sort of. Even if all your bases are covered, it may be the other guy you have to worry about. If your bank account disappears, your suppliers can't ship to you, and your customers can't pay, it won't matter if your computers are up and running.

First things first: Call your bank, and ask what kind of progress they're making to become Y2K-compliant. Most larger banks are on track for compliance, but for the sake of your business and your money, don't take chances. If you don't feel comfortable, now's the time to change banks.

What about suppliers? "Work with reputable vendors," says Bob Janacek, vice president of Safetynet Inc., a Springfield, New Jersey, software company that produces a Y2K "fix" for individual PCs. "Ask to see their Year 2000 compliance statement"--a written account of steps the company has taken to remediate software code, plus contingency plans for any problems that crop up after the millennium.

If your business depends on one or two key customers, beware. "If those customers are unable to pay or buy [because of Y2K problems], it could put a start-up out of business," says Rick Harris, a Hartford, Connecticut, attorney who consults with businesses about the risks of Y2K. To help your customers, point them to the Internet--the best place to get reports on compliance issues and forecasts on damage control, plus resources for dealing with Y2K (see "Cyber Solutions").

What else do I need to know?

Once you've tested your computers and talked to vendors and customers, what's left to do? According to Charlie Richardson, a member of the Year 2000 team at the Indianapolis law firm of Baker & Daniels, there's no substitute for going through a detailed self-analysis.

If you own a mail order company, for instance, you'd want to make a step-by-step list of every function, from the incoming order all the way to delivery of that order to the consumer. At every step along the way, look for areas vulnerable to Y2K problems. Phone systems, order processing software programs, purchasing procedures, inventory calculations and shipper availability are all examples of potential risks. Examine each step of the process, contacting equipment suppliers and software vendors, applying "fixes" where possible, and writing contingency plans just in case something does go wrong when the new year hits.

If the numbers turn over on January 1, 2000, and you still haven't noticed anything unusual, don't kick back and watch football just yet. You still need to scrutinize all your transactions carefully in order to catch any unusual data that may show up on invoices, purchase orders, inventories and the like. Be on the lookout for abnormally high or low figures caused by Y2K glitches.

Preparing for Y2K takes time and energy, but for the sake of your business (not to mention your sanity), it's worth it. Your investigation may reveal you have less to worry about than you thought . . . or that you have your work cut out for you. Either way, you'll be ahead of the game because you're prepared.

All Systems Go

Keith Kraemer takes Y2K seriously. "Because we're an Internet company, if something malfunctions--either hardware or software--it could interrupt cash flow while we're waiting for repairs," notes Kraemer, 31, who started Wish-List.com in 1997 with his wife, Gina, 30. The Manhattan Beach, California, company allows Internet users to register for gifts from a variety of retailers online; friends and relatives can access the site to see what's on a person's wish list.

With a business so reliant on technology, it's no wonder Kraemer wasted no time getting ready for the Y2K transition. He contacted his hardware and software manufacturers to ensure their products were Y2K-compliant. To keep things simple, he's continued to use the same manufacturers whenever the company adds new hardware or software.

"Outline the scope of [your Y2K-compliance] project to make it consistent with the risks," Kraemer advises other entrepreneurs. "It's a balance--overkill versus complacency."

Team Effort

"[All entrepreneurs] should take the time to educate themselves and their employees about the [Y2K] problem," says Kyla Tilton, 26. The owner of Atlanta marketing, public relations and event management firm KT Enterprises practices what she preaches: Tilton and her staff hold regular meetings to discuss Y2K issues and bring up ideas for preventing potential problems.

"Luckily, we've been able to test a lot of things ourselves," says Tilton, who found test software on the Internet and entered several different test dates to see how her software reacted. "We'll probably test [the computers] again in another three months just to be doubly sure we're OK."

Better safe than sorry is the motto for Tilton, who offers three succinct tips for other business owners: "Don't panic. Be practical. Think ahead."

Cyber Solutions

Prevent millennium bug problems with these online resources:

Free hardware analyzers:
The 19TO Solution (http://www.19t0.com)
The Holmes Fix (http://www.wsnet.com/~designer/holmesfx)
Test2000.exe (http://www.rightime.com)
Bios Patch (http://www.cix.co.uk/~harlend/y2k-3.html)

Free software analyzer:
Year 2000+ (http://www.bozemanlegg.com/y2kanalyzer.html)

News about Y2K:
Y2K News Magazine (http://y2knews.com)
IBM (http://www.ibm.com/ibm/year2000)
The Year 2000 Information Center (http://www.year2000.com)

Government Y2K sites:
SBA: Help For The Year 2000 (http://www.sba.gov/y2k)
President's Council: Year 2000 Conversion (http://www.y2k.gov/java/index.htm)

Internet broadcast updates:
Y2K: The Coming Computer Crisis (http://204.181.104.167/whY-2K.html)

Books:
Y2K Bookstore (http://www.year2000.com/products/NFcowles.htmlM)

Contact Sources

Baker & Daniels, (317) 237-0300, ctrichar@bakerd.com

Rick Harris, (860) 275-0100, http://www.dbh.com

KT Enterprises, (770) 529-9151, http://www.kt-enterprises.com

Safetynet Inc., (800) 672-7233, http://www.safetynet.com

Wish-List.com, (310) 372-8692, http://www.wish-list.com