Storm clouds bring bug fever

By GARTH MONTGOMERY

28jul98

 

A TWO-hour lecture billed as "Y2K Storm Clouds Over Australia" left a Sydney audience of senior executives with millennium fever, as the latest data revealed the persistence of serious problems.

 

Visiting META Group enterprise strategy service vice-president Carl Greiner presented damning research on the lack of Y2K preparedness globally, and in Australia, all along the business and manufacturing supply chain.

 

Less than 15 per cent of the world's largest commercial enterprises, the Global 2000, were at the stage of integrating and testing aged data – the most critical and resource intensive part of Y2K projects, he said.

 

"Most large Australian organisations have yet to begin the real challenge of robust integration testing with aged data.

 

"Testing data now accounts for 80 per cent of the work, compared with 20 per cent for defining a fix, because new remediation tools have helped speed up diagnostics.

 

"Companies need to be well into data integration and testing by the end of 1998 to allow adequate time to react to problems."

 

The weakest links in Y2K efforts related to contingency planning and risk management.

 

More than 90 per cent of the Global 2000 had not developed a thorough, enterprise-wide contingency plan.

 

"A clear business process evaluation needs to be done that outlines what has the most value to customers as well as safety issues relating to fire protection systems, elevators and anything with embedded chips," he said.

 

Mr Greiner said large, decentralised organisations were most exposed to Y2K issues because their business models were so complex.

 

"Business units within organisations have been encouraged to be independent and even competitive with each other," he said.

 

"This has led to a culture of ill communication, and the problem is that these groups need a high degree of co-ordination to work out Y2K problems.

 

"Large global organisations are generally in decent shape, but their challenge is to get their supply chain people organised."

 

Metadata research forecasts that more than 10 per cent of Global 2000 companies will experience signific-ant Y2K-related failures due to random issues. "Currently, 75 per cent are missing critical target dates for Y2K programs," he said.

 

Mr Greiner said the low level of reporting for the recent ASX deadline highlighted how much work lies ahead for Australian businesses.

 

"Australia wasn't alone in the world with inadequate reporting. A big problem is not being able to compare one country with another, or even one company with another, because there is no global consistency on how reporting should be gauged," he said.

 

"The Australian Stock Exchange asked some decent first-round questions, but there will need to be further reporting as it becomes clearer to businesses and government how each level of Y2K reporting needs to be addressed," he said.

 

Mr Greiner praised the ASX and the Australian government for bringing Y2K into clear focus as being more than an IT problem.

 

"The biggest story in Y2K is that it is beyond fixing computer code. IT does the infrastructure pieces, but the business processes are beyond their duty and this is where most of the work needs to be done," he said.

 

"The problem is getting business-line managers to get involved in fixing the supplier and manufacturing processes.

 

"This is happening slowly by forcing chief financial officers to sign legally liable documents for stock exchanges as well as external accountants wanting to see the potential viability of a company."

 

The fact that large corporations are so far ahead in Y2K programs compared with SMEs will upturn the supply chain market leaving only a few companies to dominate, he said.