This document discusses the Year 2000 problem and its potential impacts. It provides the following key points:
- There are only 654 days left until January 1, 2000, when many computer systems may malfunction by treating 00 as 1900 instead of 2000. This could disrupt power grids, air traffic control, and other critical systems.
- Fixing the problem is estimated to cost $300-600 billion worldwide and leave over 50% of problems unsolved. Potential issues include disrupted financial accounting, payroll, stock trades, and more.
- Common myths are that it is just a mainframe or software problem, or that systems will not be affected if compliant. All systems using dates are at risk.
- Organ
4. Experiences -Experiences - Real lifeReal life
10,000 medical bills (1972)
Invitation to school (1988)
Swedish food wholesaler
Golf
Yours?
5. Experiences -Experiences - ExpectedExpected
“BGE has conceded that it can not solve all
its Year 2000 problems before the end of
1999.”
Airline industry - many will not fly the
evening of December 31, 1999
Banks want to shut down on Friday
6. Experiences -Experiences - PotentialPotential
Power grids
Air traffic control
systems
Other embedded
systems
Payroll systems
Financial accounting
systems
Social security
Mortgage amortization
Stock trades
Bank vault
Elevators
ATMs
EDI
7. CostCost
According to some studies, the cost could
run $300 to $600 billion worldwide by the
end of 1999 and solve less than 50% of all
problems!
9. What is at risk?What is at risk?
Hardware and the microchip
(embedded systems)
– April 1996!
Software
– Quicken
Networking
– Network operating systems
10. The myths - Part IThe myths - Part I
A silver bullet exists
It’s just a mainframe problem
It’s just a software application problem
It’s just a COBOL problem
If your application is compliant - no need to
worry
A fixed system will not have problems
No need to worry about customers and suppliers
11. The myths - Part IIThe myths - Part II
No one outside cares
No need to discuss this issue with an
attorney
It’s not your responsibility - it’s your
business advisor’s
There’s plenty of time
January 1, 2000 (or 3) will be an ordinary
day
The problem will not begin until 1/1/00
13. What you must doWhat you must do
Plan and analyze your risk
Test all your systems - Do they work?
Upgrade off-the-shelf where appropriate
Replace where appropriate
Hire programmers where appropriate
Consistently evaluate progress
Mitigate your risk relating to suppliers and service
providers
Consider business interruption insurance
Exclusions in policies effective April 1
14. What is going on? - DisclosureWhat is going on? - Disclosure
AICPA recommendations for disclosure
Year 2000 and Congress for public
companies
SEC requirements for disclosure for public
companies
Banks
15. What is going on? - OtherWhat is going on? - Other
Being forced by the consultant - liability insurance
underwriting
Raising the cost of good programmers
Not enough people
Whole industry of topical magazines and Web sites
Mutual fund that invests primarily in Y2K companies
Year 2000 warranties
Accounting for costs in fixing the problem - expensed
International fixes - E.U. and Third World concerns
17. Basis for litigationBasis for litigation
Business interruption
Software licensing disputes
Negligence
Lloyd’s of London estimates a $1 trillion
litigation potential!
18. LitigationLitigation
Who gets sued?
Produce Palace International v. TecAmerica
Corp. (POS) - product defect
– VISA determined that 99.7% of 14 million
merchants were compliant
Atlaz International v. SBT (accounting sw)
- breach of warranty
19. Year 2000 statistics -Year 2000 statistics - OverallOverall
Loss of economic output (1998-2001): $119 billion
Cost of repair in the U.S.: $500 billion
Cost per line of code in the U.S.: $2.57
U.S. economic growth rate decrease in 1999: 0.3%
Number of person years to fix and test: 700,000
Number of PCs unable to handle: 80%
Number of vacancies for computer scientists and
programmers: 350,000
20. Year 2000 statistics -Year 2000 statistics -
Government & Corp.Government & Corp.
Cost to fix the IRS’ problem: $1 billion
Number of lines of code in IRS’ systems:
60 million
Earliest year for readiness by the Dept. of
Defense’s critical systems: 2012
Of America’s largest companies:
– <33% considered impact
– 20% done anything
– 7% have problems now
21. Top 10 reasons to do nothingTop 10 reasons to do nothing
You’re planning to retire next year.
You want to surprise the stockholders.
January 1, 2000 falls on a Saturday - you’ll have lots of time over the
weekend.
Government will pass legislation to roll back the clock to 1900.
You don’t have a budget.
You believe in the Tooth Fairy.
Bill Gates will solve it.
Nostradamus never mentioned this problem.
Your multimillion-dollar company doesn’t rely on computers.
You’re already in Chapter 11.
