Defusing the year 2000 bomb

Tick, tick, tick.
That’s the sound of the doomsday clock counting down to the turn of the century. Fewer than 640 days remain until every machine with a computer chip inside it rolls over to the Year 2000.
Doomsday prophets predict nuclear Armageddon – the end of the world as we know it.
Apocalyptic predictions aside, what’s looming is catastrophe that will most certainly happen. And it could spell the end of your business as you know it, unless you are taking steps right now to defuse the year 2000 computer bug, say Milwaukee-area computer consultants.
Simply put, the Y2K bug arises from the fact that most existing computer code was written in six digits instead of eight, meaning that date fields which end in “00” are read by most computer systems as the year 1900. That causes computer systems to spit out erroneous data or shut down entirely.
Already, problems are cropping up. Holders of credit cards which expire in the year 2000 are seeing their transactions declined, as routine processing reads the card as expired. Two years ago, 200 customers of a Midwestern Fortune 500 financial services company received bills showing 96 years worth of interest after the company’s consumer loan system encountered the 00 date. As far back as five years ago, a 104-year-old Winona, Minn., woman received a notice telling her it was time to enroll in kindergarten when a computer misread her birthdate which ended in 88.
“Anyone who works with computers should assume they have a problem,” warns Jeff Ray, vice president of emerging technologies for Detroit-based Compuware.
If you accept the premise that rewriting a line of code costs between 80 cents to $1.50 per line, it’s a foregone conclusion that fixing the Y2K bug is going to take a bite out of profits. All told, the Y2K bug is expected to deliver as much as a $1.5 trillion hit to the world economy, according to Peter de Jager, an independent analyst and commentator who is considered a leading authority on the subject.
The price for delaying a Y2K fix is steep. Consider the case of a small Georgia bank which had done nothing to de-bug its system: The Georgia state banking commission revoked the bank’s charter, putting it out of business.
Then there’s the Federal Aviation Administration and its outdated air traffic control system, which contains more than 23 million lines of code written in 50 different languages.
Officials from the General Accounting Office warn that only 30% of the FAA’s critical 430 computer systems have been fully de-bugged. And only a small number of specialists are equipped to decipher the code. The potential impact is interruption of air travel for the first days, weeks and months of the Year 2000. Compuware’s Ray unequivocally states that he is not flying several days before the turn of the century or for several weeks thereafter.
If it weren’t for bad news
The Y2K bug lives everywhere, not just in your computer system. Virtually anything which contains a computer chip needs to be checked out, says Tony Ollman, an information systems consultant with Virchow, Krause & Co. in Madison. That includes machines on the shop floor system, the elevator and HVAC systems in your building – not to mention your telephone and security systems. These so-called embedded systems are just as likely to fail unless you take steps now to ensure that they are Y2K compliant.
“We’re quite sure that business is behind,” says Ollmann, whose firm conducted a statewide poll on Y2K readiness. “In the companies we’ve talked to, there’s a very high recognition of the impact on computer systems. But there appear to be a significant number who are overlooking embedded systems.”
The statewide survey of 200 manufacturing and distribution companies with revenues over $5 million revealed that approximately 49% had not considered their shop floor systems as vulnerable to the bug, even though 95% of respondents said they felt they were on top of the problem.
When it comes to embedded systems, ask yourself what you need to replace versus repair, Ollman says. What you decide to do will depend on your company’s overall structure.
Computers and embedded systems aren’t the only places you need to look for the Y2K bug. You also need to look beyond your own four walls at your customers and your suppliers to determine if they are Y2K compliant.
“Take the manufacturing process,” Ollman says. “You could have all of your own internal systems working fine, but if you don’t have the raw materials to produce your product, you go out of business.”
Or say your small business supplies a critical part to a much larger manufacturing concern. If you have a contract which requires you to supply a certain product or service to a company over a period of time, and the Y2K bug shuts you down, that could potentially slam the brakes on your larger customer’s manufacturing process. If you have a requirements contract with that manufacturer, you could be staring down
“Businesses need to realize that it’s just not a matter of losing customers or convenience…. People might sue.”
– Derek Stettner, Godfrey & Kahn
the barrel of a lawsuit, says Derek Stettner, an intellectual property lawyer with Godfrey & Kahn.
“Businesses need to realize that it’s not just a matter of losing customers or convenience,” Stettner says. “They could be held liable by other parties such as customers, shareholders or other vendors. People might sue.”
Stettner cautions that the amount of time and money spent defending a lawsuit is potentially devastating to a small business. In other words, on top of lost production and profits, the Y2K bug could deliver a knockout blow to a business that is not prepared.
Already, legal pundits are predicting that Y2K-related litigation will far surpass anything that has come before it.
And it only gets worse.
According to virtually anyone familiar with the subject, if you haven’t already taken steps to get your Y2K bug problem straightened out, you’re in trouble – big trouble.
Carl Gerlach, president of Apex Information Systems in Cudahy, says businesses which have done nothing to date about Y2K can expect to pay 25% more for every quarter they put off the problem.
“What we are seeing is that people are looking for an easy way out,” Gerlach says. “It’s not going to add any value to your business, other than to keep it going.”
Not only is time running out to get the problem identified and fixed, but qualified computer programmers available to fix the problem are in short supply. Unless you’re well on your way to a Y2K fix or are a major player, you are not going to get the attention that you deserve, adds Kelly Hansen, a principal with Sun Tzu Security, Ltd. in Milwaukee.
“Right now, there is a huge shortage of talented programmers who are capable of going through and doing the necessary code changes,” Hansen says. “So people are dealing with the leftovers. They are getting the engineers who weren’t picked up – the second and third-stringers, the benchwarmers. Small companies who are coming late to the party, who are just getting started now, this is who they’re left to deal with.”
The consensus among local computer consultants is that most large firms seem to have a handle on the problem, and expect to make their systems free of the Y2K bug well in advance of the deadline. However, the outlook for small business is not nearly as encouraging.
“When you get to the small to medium-sized companies, somewhere between 20 to 30 percent have some kind of a plan in place,” estimates Robert Krouze, a programmer for Entré PC Solutions, Inc., in Brookfield. “The rest are in denial or disbelief.”
Krouze says he is aware of several marginal businesses which plan to close up shop rather than deal with Y2K.
Most small businesses are reliant on pre-packaged software to run their accounting, inventory and data processing functions. So it is incumbent on businesses to ask if their software is Y2K compliant. Even then, there’s an element of uncertainty, acknowledges Dave Herrmann, manager of information technology for Grande Cheese Co. in Lomira.
“We’re relying, to a great extent, on the assurance of our software vendor,” Herrmann says. “So, you’re relying on people outside the company to make sure that your business is going to continue functioning, and that’s a difficult thing.”
Time to get going
If you haven’t already done so, now is the time to address your Y2K problem. The only way to make sure it gets addressed is if the directive comes from the highest level within the organization, Ollman says.
“This has to be the person that runs the company, and who can keep the project manager’s feet to the fire,” Ollman says. “There needs to be a recognition that this is a companywide project, and not just another information technology event.”
Determine the extent of your information technology problem by contacting your information technology manager (if you have one). If not, contact whoever is responsible for managing and maintaining your computer software. Your specialist needs to develop a plan of action which involves pinpointing the problem, advises Compuware’s Ray.
Write a letter to your software or outside services provider asking for certification that the software they are providing will work beyond the Year 2000, Ray says. Get them to sign on the dotted line.
“We pretty much know what small businesses are going through,” says Mary Bennett, an operations officer for Park Bank, a Milwaukee-based bank holding company with $400 million in assets. “Without a major corporation to take care of you, you really have to rise up and get this done on your own.
“It’s not a good thing to wait until 1999 to try to do this.”
April 1998 Small Business Times, Milwaukee