July 19, 1999

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Homestretch

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sidebar: Chase Manhattan Is Ready For Anything Severed Chains Closing Time Securities Group Advises On Y2K Contingency Plans Aetna Prepares For Partners' Y2K Problems

Financial institutions aren't the only companies required to document contingency plans. Almost all publicly held companies must disclose details of their Y2K projects, including contingency plans, in their financial reports filed with the Securities and Exchange Commission. In fact, contingency planning isn't a new idea for most companies, says Al Berman, senior manager of business continuity planning at PricewaterhouseCoopers. "We've encouraged companies to use their ordinary crisis-management process models with slight modifications for year 2000 problem identification," says Berman.

Budget Rent A Car Corp. will identify risks to the business and plans to run some operations manually and stock up on inventory in case of failures in the supply chain, says Mary Weddig, year 2000 manager. Budget expects to have a Y2K command-and-control center in place by December, she adds. But Budget's Y2K project hasn't always gone smoothly. The company's award of a five-year, $200 million outsourcing contract to Computer Sciences Corp. in March put its project two months behind schedule. "The deal took a lot of energy and delayed a lot of projects, but CSC has really stepped up to the plate for us with contingency planning and best-in-class practices," Weddig says. Budget still has some year 2000 mop-up work left, but the company is on track to complete work in time for the new year, she says.

To help with their contingency plans, some organizations are using new automated tools designed just for that purpose. The U.S. Coast Guard, for example, is implementing Y2K Command Center from Essential Technologies Inc. The software is a stripped-down version of Essential Technologies' contingency-management software used by government agencies, chemical companies, railroads, and others to respond to emergency situations. The software has monitor and alert functions, workflow management, and verification and documentation features.

The Coast Guard is using Y2K Command Center to survey ships and the U.S. port facilities the ships will use during three critical time frames: around Sept. 9, when the date (9/9/99) might be confused by computer systems to mean that the end of a file has been reached or that an operation should be terminated; around New Year's Day; and around the leap year, Feb. 29, 2000.

The surveys will be used in risk assessments. If Y2K issues make it risky for a ship to enter a port at night, the Coast Guard might require the ship to enter during daylight, when navigation is easier. Other responses include tug escorts, extra crew members, or ordering a ship to anchor at sea until the critical time period has passed or other actions have been taken.

As things stand now, says John Hannon, Y2K project manager for the Coast Guard, "we have no specific information on the Y2K issues of any individual vessel, and I don't have any information that any fleets have been completely remediated." That will change once the surveys are completed. Because the Coast Guard's resources are limited, the focus of follow-up efforts will be on ships carrying hazardous material, he says.

While the Coast Guard is focused on three potential Y2K-problem trigger dates, businesses are anticipating the need to stay on alert for a much longer span. "Your discovery process begins in earnest when the clock turns, and it will go on for a couple of business cycles," says John McKinley, chief technology officer at Merrill Lynch & Co. "It's not a one-time effort."

Merrill Lynch, which finished its remediation efforts last month, has already begun implementing contingency plans. For example, when IT vendors showed signs of not being year 2000 compliant in time to meet the brokerage's deadlines, they were replaced.

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Illustration by Doug Panton

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