What's really going to happen?
The providers of these pages cannot accept
any responsibility for any dcisions taken on the basis of information given
here, although it is provided in good faith
If in doubt, consult a qualified professional
This part of the Pocket Guide isn't looking at software.
Instead, it tries to suggest what may happen if we look beyond the relatively
straightforward IT problem to the consequences for business and for society
as a whole.
No-one knows what will actually happen as an increasing number of computer
systems pass their date horizons. Some commentators suggest that the whole
problem has been grossly exaggerated in order to create lucrative work
for expensive consultants. Others prophesy doom, and are stocking up with
food, turning their financial resources into gold, and heading for their
mountain retreats. We provide a few links on personal preparedness, but
don't cover this in any detail.
Relatively little has been written about this; an exception is a number
of papers by Capers
Jones and others, which are available through, and listed on, the website
of the Project Management Institute.
A report from IDC Research assesses
The Worldwide Financial
Impact of the Y2K Problem. and estimates spending at US$122bn in 1995
through 2001 in the US itself, or 2.6% of total IT spending; $297bn worldwide
is 2.9% of total spend. Clearly, much of this money (a) has been removed
from other sectors of the economy and(b) will be recovered, eventually,
through prices of end products.
There do seem to be some common themes emerging.
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In the developed world, a significant proportion of Year 2000 problems
will be fixed, tested and in production. Some links to individual companies
are provided on our page of implementation news and
Large commercial enterprises
Many large enterprises are targeting the end of 1998 for this phase, leaving
the whole of 1999 for production testing -- and to begin to find remaining
problems in the many systems which may look forward one year in the business
Whether these targets will be achieved is doubtful, but well-resourced
enterprises seem likely to get pretty close. However, few large commercial
enterprises are willing to release more than the legally required minimum
of information. So it's difficult to be sure.
Financial commitments operate over long timescales, such as 25 years for
a mortgage and 40 years for a pension. The financial sector has been aware
of the Year 2000 problem and working on it longer than most
However, it is also in the finance sector that public millennium failures
have first occurred, as credit cards expiring in 2000 have been issued
and brought into use
The Global 2000 Groupents an attempt by the FIrst World's finance industry
to extend assistance to less developed economies
Pharmaceutical and healthcare
This sector is well advanced, but has some specific challenges as it is
a heavily regulated industry worldwide. Regulatory approval as well as
technical sign-off therefore has to be obtained for a lot of Year 2000
Government departments are almost universally a source of concern. With
tight controls on public spending, and a reluctance to be the bearer of
bad news, much of the public sector has been late starting and horrifically
under-resourced. For example, the UK Government minister now responsible
admitted as much in the House of Commons in October 1998.
In the public sector, the US probably leads the way both in the level
of disclosure and in remediation. Many developed nations in Europe are
well behind, partly because of focus on Economic and Monetary Union (which
is politically, not technically, driven)
Utilites (energy, water)
There is considerable attention being paid now to the utility companies,
and particularly electricity supply. In the developed economies, much of
the problem relates to embedded systems used in process control, and these
have their own uncertainties. In the USA, the Electric
Power Research Institute has a significant programme in place.
In early 1998 the New Zealand city of Auckland experienced a major
power supply failure - not due to a Century Challenge issue - which
blacked out the Central Business District for about six weeks. This major,
but relatively localised, power failure in Auckland illustrates how dependent
society is on electricity.
Major cascade power failures in recent years in other areas, such as the
US Eastern Seaboard, show that the power supply system is not as robust
as its degree of redundancy perhaps ought to imply.
The ITU took some time to appreciate the
reality of the Century Challenge and in some areas of the world work is
more advanced than in others.
Telecommunications in the northeastern United States has experienced a
large scale cascaded outage due to a relatively simple software problem
In the UK, an institution was embarrassed when an incompletely tested switch
was deployed in its internal telephone system as a Year 2000 remediation
and itself failed (not for Y2K reasons)
Small and medium enterprises
SMEs have been the target of Government awareness campaigns, for example
in the US and the UK.
Nevertheless, it's likely that many SMEs in developed economies are still
not aware of the issues and, if they are, don't have either the will or
the resources to fix it.
Less developed countries
Less developed countries are perhaps less dependent on IT systems but likely
much less aware of the problem and less well resourced to fix it.
These are also in many cases countries with unstable social/political systems.
Civil unrest prevents Year 2000 remediation work going ahead alongside
its many other, more serious and more immediate, consequences.
Global companies are pushing compliance not just in their developed markets
but worldwide. This generates a certain amount of pull to the locally based
However, large corporations will rapidly withdraw key staff from unstable
regions, for their own safety, and this holds up progress.
Some economic sectors, particularly the financial
sector, are taking serious action to assist less developed economies
The global economy
In a worldwide supply chain, the failure of a small part can break the
whole. Thus many major corporations are turning their attention, either
privately or publicly, to assisting their key smaller suppliers and customers
Some corporations are publicly asserting compliance requirements as the
case for continuing to do business with them
Some companies have decided to deliberately cease trading rather than invest
Large global corporations are in general well prepared worldwide and will
In the developed world, small/medium enterprises and the public sector
are most likely to experience failures
Large enterprises will then be affected through failures in their supply
chain. They will have contingency plans, and will be prepared to summarily
abandon parts of their business in the extreme.
It is possible to imagine a failure affecting a significant proportion
of the population. For example, if social welfare payments could not be
made then some recipients may be placed in serious financial difficulty,
lose their homes, suffer mental illness or commit suicide.
Recent months have seen financial problems in Russia and some Asian economies.
Year 2000 failures in these regions could precipitate similar problems
and there must be a serious possibility of civil unrest. In a more extreme
scenario, ethnic violence could erupt and could lead to wars.
Many people will wish to stock in a few extra painkillers or stomach cures,
even if it's only to cope with the extra hangover
The global pharmaceutical industry is well prepared. However we expect
that many people on crucial medication will ask their doctor for an extra
There's no reason to suppose that supermarkets and other large stores will
have technical problems. I personally suspect, though, that there may be
substantial planned or unplanned staff absence. So they may not open after
A couple of useful sites, as a gateway to the discussion of these issues,
are Ready for Y2K (we like it,
because it links back here!) and the Cassandra
Project (4 May 99)
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Copyright © Tony Law/Parkside Information Management 1998