InformationWeek
Defining The Business Value Of Technology
July 19, 1999
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With most Y2K work behind them, companies are locking down contingency plans in case problems hit
The need to prepare for the unexpected for this unique technology event is clear. Potential problems range from lost data to full-scale services outages. A new InformationWeek Research survey of 250 IT executives, in which all but 4% say they'll complete their Y2K work before year's end, shows that IT departments plan to be prepared for whatever happens. A full 77% say they've already completed their contingency plans, up from just 26% a year ago. Another 19% are still working on them. Only 4% say they're not making any contingency plans.
There are many approaches to contingency planning, and survey respondents seem to be covering all bases. Three-quarters say they'll resort to manual processes if Y2K problems render their computers useless; 63% will stop running a particular application until its problems are resolved; and more than half plan to complete before year's end some activities that typically would take place during the first quarter of next year. In addition, 43% say they have backup recovery centers available for their data centers should year 2000 problems such as power and telecommunications outages shut down their primary data centers. Stockpiling critical supplies to make sure that production continues and customers' needs are met is under way at 38% of the respondents; 34% will temporarily shut down impacted business processes; and 24% will shift affected operations to a strategic partner.
At the opposite extreme are financial institutions, which must follow detailed instructions and deadlines set by federal regulators. "I would recommend the federal guidance program to anyone," says Richard Lee, director of year 2000 activities at Travelers Life & Annuity, part of Citigroup. "The things they suggest that institutions should undergo are rigorous."
Contingency planning guidelines found at the Web site of the Federal Financial Institutions Examination Council (www.ffiec.gov), an interagency standards body, involve establishing organizational planning guidelines, completing a business impact analysis, developing a business resumption contingency plan, and designing a method of validation so that the business resumption plan can be tested for viability. Financial institutions had to document their plans and make them available to examiners by the end of last month.
That deadline necessitated a fast finish for Travelers Life & Annuity. When its parent company, Travelers Group, merged with Citicorp last October to form Citigroup, the insurance operations were brought under the same deadlines set by federal regulators for banks. That meant Travelers Life & Annuity had to push up its Y2K project by three months, Lee says.
Illustration by Doug Panton
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nly 164 days remain before New Year's Eve, when IT systems around the world will be put to the ultimate year 2000 test. As businesses head into the second half of the year, IT managers continue to express confidence that they've got the date-field issue under control. But what if they're wrong, and glitches hit their companies' systems or those of suppliers? To protect against worst-case scenarios, savvy Y2K project managers are locking down their contingency plans.
How businesses handle contingency planning varies widely. At medical publisher Slack Inc., the effort amounts to IT audits and end-to-end testing to make sure systems are compliant and that the business can continue to operate. "A lot of our contingency planning is thorough testing, so we can be sure we won't have a problem," says Jon Schafer, division manager of Internet and IT at Slack, in Thoroughfare, N.J. The publisher already has data backup and power-outage contingency plans, and even if half of the company's suppliers have problems, "it wouldn't harm our business," Schafer says.
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