Year 2000 Wire/With 500 Days Left Until Year 2000, Software and Financial Services Sectors are Best Prepared for Millennium Computer Challenge

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09:01 a.m. Aug 12, 1998 Eastern

NEW YORK--(BUSINESS WIRE)--Aug. 12, 1998--

Government Lags Far Behind Private Sector in Year 2000 Readiness --

Health, Transportation, and Utilities

Rank Least Prepared Among Corporate Categories

Most Major Firms Say Year 2000 Compliance

Will Build Their Market Share

With the 500-day milestone one week away, the software and financial services sectors lead major industrial categories in addressing the Year 2000 computer challenge, according to a new poll of information technology (IT) managers. The survey -- conducted by Cap Gemini America LLC, a market leader in Year 2000 services -- interviewed IT managers at 116 of the nation's most successful firms and 14 government agencies.

Public sector computer systems are far less prepared for the Year 2000 than those of the private sector, the study found. Among the nation's largest corporations, the health, transportation, and utility categories are furthest behind in dealing with Year 2000 computer issues.

"Public sector respondents appear to be less prepared for the Year 2000 than private industry, and that could potentially affect delivery of government services," said Jim Woodward, senior vice president of Cap Gemini America and heads its TransMillennium(TM) Services group. "With 500 days to go, variations within private industry suggest that several sectors also ought to accelerate the pace of their Year 2000 work."

The survey's ranking system of Year 2000 readiness placed the public sector 16 percent behind the least prepared private industry category. The local, state, and federal government respondents scored a "67" on a 0 to 100 preparedness scale, while private sector scores ranged from "80" (health industry) to "88" (software industry).

The software and financial services sectors lead overall in Year 2000 readiness, based on a combination of actual project progress and success evaluation factors. In descending order of readiness, other sectors evaluated were: computers; manufacturing and telecommunications (tie); aerospace; oil and gas; pharmaceutical; distribution; transportation and utility (tie); health; and government.

Cap Gemini America's tracking poll of IT directors and managers in 12 sectors -- one of the longest-running surveys to systematically monitor Year 2000 readiness -- has been conducted since March 1995. The sample for the current study was expanded to include government IT managers. The poll is conducted for Cap Gemini America by Rubin Systems Inc.

"Progress within individual economic sectors measures only a portion of the overall impact of the Year 2000 challenge," Woodward said. "In our interconnected, global economy, serious risks stand to arise from cross-industry and international computer connections."

The incidence of Year 2000-related system failures is expected to rise significantly next year. While 40 percent last month said they had already experienced such a breakdown, 86 percent of those responding to the current survey "expect an increase in system failures after January 1999."

Two-thirds of the private sector respondents believe that Year 2000 compliance gives them a competitive advantage. Nearly six of ten (57 percent) expect that Year 2000 compliance will increase their market share, and more than a third (35.5 percent) may incorporate their compliance status into marketing messages. Nearly one-sixth (15 percent) say that their Year 2000 compliance status may lead to the acquisition of companies that might fail, and more than half (55 percent) say they would be unlikely to do business with non-Year 2000-compliant suppliers of products and services.

Survey respondents plan to accomplish the bulk of their Year 2000 work during 1999. With 500 days to go, only 15 percent expect that more than three quarters of their "critical systems" will be "completely tested and compliant" by Jan. 1, 1999. But 88 percent expect that at least 76 percent of these systems to be compliant by Jan. 1, 2000.

Respondents report that the top six priorities for the next 500 days are: systems installation, creation of an operating environment, ensuring desktop integrity, assessments and actions regarding vendors and business partners, dealing with the supply chain, and contingency planning.

Cap Gemini America is a member of the Cap Gemini Group, one of the largest computer services and business consultancy companies in the world. In the United States, Cap Gemini America employs approximately 3,500 people.

TransMillennium(TM) Services is Cap Gemini America's Year 2000 group. Cap Gemini America uses a highly automated and factory-based approach to the date change challenge. Cap Gemini America's ARCdrive(SM) toolset has already helped more than 300 businesses worldwide address Year 2000 issues on over 3 billion lines of code. The company's Year 2000 clients represent diverse major industries, including financial services, telecommunications, banking, insurance, manufacturing, utilities, healthcare, and government.

Cap Gemini America's Year 2000 website is http://www.usa.capgemini.com/y2k.