Endlessly discussed, relentlessly hyped and moving ever closer, Y2K
is nearly upon us. While no one can be sure how the
much-anticipated Y2K computer malfunctions will affect individuals,
businesses or society as a whole, two things are certain: The Y2K
problem is real, and it will impact your small business to some
degree.
If you're looking for a reason to take this problem seriously,
consider this: With less than a year to go before the day of
reckoning, Y2K-related malfunctions have already begun to occur.
Aside from the expected problems caused by credit cards with
"00" expiration dates, last year the com-puterized
material management system of the U.S. De-fense Lo-gistics Agency
dropped 90,000 items from its inventory because of a date
calculation error. Per-ishable items that were supposed to expire
in two years (2000) were seen by the computer as having expired 98
years ago because it assumed that "00" meant 1900. This
seemingly simple miscalcu-lation took nearly 400 hours to correct.
What's worse, according to a Cap Gemini Millennium Index
survey, the percentage of com-panies experiencing Y2K-related
business problems, such as processing disruptions and financial
miscalculations, is increasing every month, from 7 percent in
De-cember 1997 to 44 percent in Octo-ber 1998.
Although the typical small business doesn't have as much
inventory or as many computers as the U.S. military, Y2K consultant
Larry Goldfarb contends small businesses will suffer from
Y2K-related mal-functions to a greater extent than larger
organizations will. "Not only do small businesses lack the
budget to make the necessary changes to their computer systems, but
small-business owners are also in a hype-induced state of denial
about the problem," says Goldfarb. "They truly don't
believe this is a [real] problem."
A recent study on small-business attitudes toward Y2K-related
problems sponsored by Wells Fargo Bank and performed by the Gallup
Organization supports Goldfarb's views. While more than 80
percent of small businesses are at risk for Y2K-related problems
caused by malfunctioning computers, cash registers and other
equipment, only 6 percent of the respondents considered the Y2K
problem to be "very serious."
This lackadaisical response is disturbing when you consider the
tremendous effort that has already been expended by government
agencies and big business to battle the Y2K bug. The Securities and
Exchange Commission, for example, has ordered all publicly traded
corporations to disclose Y2K readiness and project information in
their annual reports, including a "worst-case scenario."
And both the House and Senate have introduced a wide range of
Y2K-related measures, including the Small Business Year 2000
Readiness Act, which partially guarantees bank loans of up to
$50,000 for small businesses seeking to replace or repair
Y2K-vulnerable equipment, and an amendment to the IRS Code, which
allows businesses to write off up to $20,000 in Y2K-related
expenses on their tax returns.
Big business is also scrambling to make its computers
Y2K-com-pliant. According to Cap Gem-ini Millennium Index
estimates, U.S. businesses will have spent more than $500 billion
by 2000 to solve Y2K-related problems, including inadequate
software and hardware, lost produc-tivity and the resulting
litiga-tion. For many of these companies, achieving Y2K compliance
also means in-vesting in additional IT staff or authorizing the
thousands of overtime hours required to audit every line of
software used by the business. Big companies like General Motors
and Amoco Corp. have each already spent more than $100 million on
their Y2K compliance projects.
Seeds of Destruction
The origin of the Y2K bug is no mystery. In the Information
Age's infancy, when large corporations and government agencies
began using mainframe computers to automate tasks, the memory used
to store programming instructions was scarce and expensive.
Programmers writing the code for business applications were
encouraged to conserve space whenever they could; one way was to
use abbreviated date codes, with only two digits to indicate the
year. Assuming their programs would no longer be in use by the turn
of the century, programmers ignored the fact that come 2000, these
computers would interpret the date codes with a two-digit year
field of "00" as being 1900, and then incorporate this
corrupt data into a wide range of date-dependent
calculations.
Forty years later, this mistaken assumption is coming back to haunt
a world far more dependent on computers than these early
programmers could have imagined. And far from being corrected, the
problem has been compounded by the millions of lines of code
(studded with the problematic two-digit date fields) that were
added to the original pro-gramming over the years, making the
correction process tedious, time consuming and very costly.
Embedded chips, tiny micro-processors that control everything from
VCRs to computerized switching units at nuclear power plants, may
also be infected with the Y2K bug-but their programming is
hardwired into the chip and cannot be audited or corrected.
Instead, each and every embedded chip that is suspected to be
non-Y2K-compliant must be inspected and, if necessary,
replaced.
This faulty programming has also made its way into PC hardware and
software, says John Grover, president and CEO of Duluth, Georgia,
MillenniumPlus Consulting and author of Your Company's PCs and
the Year 2000 (self-published). "A lot of people don't
realize how vulnerable PC-based systems are to the bug," says
Grover, "especially PCs built before late 1996. If you're
running applications that rely on DOS for the correct date, you may
have some problems with those applications after the year
2000."
In a small business equipped with a handful of desktop PCs,
repairing or replacing non-Y2K-compliant equipment is relatively
simple. The real source of most post-millennial business
interruptions will come from outside your business, as a re-sult of
the Y2K bug's potential effects on infrastructure: power,
telephone communications and other services.
When a special panel under the Senate Banking Subcommitte on
Financial Services and Technology convened recently to check the
utility companies' progress on the Y2K problem, industry
experts called the chances of Y2K-related outages "extremely
low, but conceivable." But when subcommittee chair Bob Bennett
(R-UT) polled 10 power utilities and asked how many of their most
important computers had been fixed, he was given answers ranging
from 5 to 54 percent.
Blessed with big budgets for modernizing and enlarging their
computerized switching systems, telecommunications giants AT&T,
MCI and Sprint have tackled the Y2K problem head-on; each will
spend more than $200 million this year on their respective
Y2K-compliance projects. Smaller regional telecom providers,
however, don't have the same resources to battle the problem,
and no one is quite sure what collective impact this may have on
telecommunications as a whole.
Surviving the Bug
With so much riding on it, how can small-business owners minimize
the impact of the Y2K bug on their enterprise? Triage-determining
which systems are the most important to the health of the business
and attending to those first-is a good way to start, says
Gold-farb. If your business relies on desktop PCs, there's a
simple test you can perform to check the Y2K compliance of your
systems. First, back up all your files on disk or tape. Then
manually reset each PC's clock to 11:59 on December 31, 1999.
If, after a minute has passed, the clock reads anything other than
12:00 a.m. on January 1, 2000, your PC is vulnerable to the Y2K
bug. If it passes the test, try again-but this time shut off the
power after manually resetting the time. Wait a minute, reboot, and
then check the time and date again. If there are errors in the time
and date display, the PC's BIOS (basic input/output system)
needs to be replaced or fixed with a software patch.
Software installed on your machines can also cause major problems,
says Ed Yourdon, co-author of Time Bomb 2000 (Prentice Hall
Computer Books), particularly if they are "orphan"
applications. "The biggest risk for PCs is that they may be
using home-grown software or some proprietary billing package that
was developed five years ago by someone who has since
disappeared," says Yourdon. "You could very well have Y2K
problems with that application."
If you use many different types of software, it may be difficult to
keep track of compliance issues. Grover suggests performing an
inventory of your software and then going down the list and
contacting vendors to see if their products require upgrades or
patches of some type to be Y2K-com-pliant. Most software vendors
post this in-form-ation on their Web sites. Software produced by
vendors who can't or won't offer you a reasonable solution
should be replaced immediately.
Shared Misery
Just because you've made your own business Y2K-ready
doesn't mean your customers and suppli-ers have done the same,
warns Gro-ver. "Early on, everyone was wor-ried about fixing
their own prob---lems," he says. "Eventually, they
realized their biggest problems could come from suppliers or
customers who go out of business because of Y2K."
Asking a business partner if they've addressed the Y2K problem
isn't sufficient, according to Grover. "It's not
enough to solve your problem and know your partner has solved his.
You have to know how the problem was solved and test it out
beforehand," he says. "For example, if you're trading
data with your partner electronically, and to fix the Y2K problem,
you expanded your date fields to four digits, but your partner is
using a windowing process [programming a computer to interpret
two-digit numbers within a certain range as four-digit numbers] and
still keeps two-digit date fields, you won't be able to handle
each other's records." A good way to ensure that both
businesses are on the same page is to use Electronic Data
Interchange (EDI) standards like ANSI 12, an internationally
recognized data format that allows businesses to exchange common
documents without having to customize their hardware or software
for each organization they do business with.
Shoring up your supply line is also necessary to prevent business
interruptions. "Surviving Y2K means contingency
planning," says Grover. "I'm advising my clients to
develop lines of communication with trading partners. If you have a
key supplier who believes [Y2K isn't going to be a] problem,
you have to find another supplier."
Grover believes that legal actions stemming from broken contracts,
unfulfilled orders or other Y2K-related business interruptions
shouldn't be an overriding concern to small-business owners.
"The saving grace is that there will be so many lawsuits,
there won't be docket time for all of them," he says.
"The safe thing to do is document everything, but lawsuits are
the least of your worries. Business survival is your number-one
priority. If you communicate with your customers and suppliers,
that will help. The fewer surprises there are in the relationship,
the less possi-bility there is that a lawsuit will
arise."
The days after January 1, 2000, may be a time of crisis for some
businesses, but this period may also present some unprecedented
opportunities for those who are prepared to take advantage of the
situation. "The whole world is about to have some serious
computer problems. The situation may not last long, but if
you're there at the right moment, that might serve you very
well," says Leon Kappelman, chair of the Software Productivity
Group Conference and co-chair of the Society for Information
Management's Year 2000 Working Group, a nonprofit advisory
team. "If competitors are in trouble, that may open up
territory for your business in both local and international
markets. How companies react to Y2K will determine who customers
choose to do business with in the long run, because if their
computers work and they're reliable and can deliver the goods,
they'll be perceived as competent in other areas as well.
Anyone who can afford to might consider stocking up on inventory so
they can serve customers when other companies may no longer be able
to. There is risk here, but there is also the possibility of great
reward for the diligent."
Y2K Survival Kit
Web Sites
- http://www.score.org , the
home page of the Service Corps of Retired Executives, provides
articles, resources and links on Y2K for small businesses.
- http://www.microsoft.com/year2000
rates the Y2K compliance of Microsoft products and offers an
extensive list of tools and resources.
- http://www.IBM.com/IBM/Year2000
, IBM's Y2K home page, offers information on its major
platforms as well as a testing matrix to help you conduct Y2K tests
on your systems.
- http://www.year2000.com
is a clearinghouse of Y2K information, including a list of vendors,
articles on the subject and e-mail updates.
Software
YMARK2000 from the National Software Testing Laboratory tests your PC for Y2K compliance. Download the software from http://www.nstl.com/html/y2klogo.html
Book
Time Bomb 2000 (Prentice Hall Computer Books), by father-and-daughter team Ed and Jennifer Yourdon, explains the Y2K crisis in clear, concise terms, presenting various scenarios to illustrate how Y2K could impact industry, infrastructure and society.
Consultant
MillenniumPlus Consulting (http://www.millenniumplus.com , 770-521-9959) works with small businesses to determine susceptibility to the Y2K bug and provides services to ensure compliance.
Talk The Talk
Now that you're a Y2K expert, you should leaarn to sound like
one. Here are some buzzwords culled from the voluminous writings on
the impending crises:
Doomsdate(s): Calendar dates that may cause computers to
malfunction, such as 1/1/00 (Y2K), 9/9/99 (four nines are used as a
"stop" code in some programs) and 2/29/00 (the extra day
in a turn-of-the-century leap year).
Triage: Prioritizing mission-critical systems to determine
where to focus your Y2K-compliance efforts. ("We must triage
our mission critical systems before preparing them for the
doomsdate.")
Going Dark: To have computer systems, electric power grids
or even whole business operations fail as a result of the Y2K bug.
("If the electric power utility companies don't finish up
their compliance efforts in time, our company can plan on going
dark for a while.")
Workaround: A contingency plan designed to keep a business
open despite Y2K-related failures of vital systems. ("When the
cash registers go dark, we can always use battery-powered
calculators as a workaround.")
Domino Effect: The failure of a non-Y2K-compliant system
causing the failure of a Y2K-compliant system. ("Our
workaround didn't take the domino effect into account, causing
our whole operation to go dark.")
Bug Out: Once used by the military to describe a hurried
evacuation effort, it now means to leave the city for a remote
rural area to avoid social upheaval caused by Y2K-related failures
of essential services. ("After the food trucks stopped coming
and our supermarket went dark, we decided to bug out.")
TEOTWAWKI: Y2K survivalist shorthand for "The End Of
The World As We Know It."
Contact Sources
Larry Goldfarb, fargoprov@aol.com
Ed Yourdon, ed@yourdon.com, http://www.yourdon.com
Thanks to Wired magazine, Westergaard Year 2000
(http://www.y2ktimebomb.com) and
author Ed Yourdon.
