Racing To 2000

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November 17, 1997

Racing To 2000

he year 2000 conversion problem has been looming over the heads of every IT manager for years. In April, InformationWeek examined ways in which undertaking that conversion is rippling through corporations-occasionally speeding up other IT projects and saving companies money. Companies such as MasterCard International, Bristol-Myers Squibb, and Marriott International have moved up projects ranging from the transition to client-

server topologies from mainframes, to the phasing out of noncompliant systems. "Year 2000 is providing much of the business rationale for [making these changes], and making the conversions happen sooner rather than later," says Rob Reeg, MasterCard's senior VP for systems development.

The incentives, according to many IS managers, include such consequences for inaction as diverted IS funds, a drain on skilled people, and the threat of lawsuits. Since the article ran on April 21, estimates for total year 2000 legal costs have run as high as $1 trillion. The actual is still unkno wn, but legal responsibility has now become the latest concern for some CIOs.

While many companies are benefiting peripherally from making year 2000 fixes, others are being forced to kill vital IT projects in order to focus their resources on the problem. In an InformationWeek survey of 100 IS managers conducted in April, 16% said fixing the year 2000 problem had already delayed IT projects. It's causing companies to delay or cancel "anything that's expendable, such as upgrading to higher software releases," says Joel Goldhammer, a VP at management consulting firm A.T. Kearney in Alexandria, Va.

Where's the money for these projects coming from? A survey of 250 U.S. companies by the Society for Information Management found that nearly 30% of total IT spending over the next three years will be spent on year 2000 conversion. About 40% of respondents said that money will come from existing IS maintenance budgets, while more than a third said it will come from regular IS development budgets.

Story's authors: Bob Violino and Bruce Caldwell

Read it on the Web at: techweb.cmp.com/iw/627/27iuyr2.htm and techweb.cmp.com/iw/627/27iuyr4.htm

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