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Wednesday, August 12, 1998

Cap Gemini Study: Aggressive Ramp Up Needed To Meet Y2K Deadlines

ith just over 500 days left before the new millennium, only 15% of companies and government agencies expect to have their critical systems more than three-quarters tested and compliant for year 2000 by Jan. 1, 1999, according to a study released today by IT services firm Cap Gemini America.

The survey of IT managers from 116 commercial companies and 14 government agencies also indicates that 88% expect to have about 76% of their systems compliant by Jan. 1, 2000. But to meet that ambitious compliance improvement, companies will have to aggressively ramp up year 2000 work over the next 16 months or so.

"As it is, even companies that started their year 2000 work early have slippage, or are missing deadlines. The work takes longer than people think it will," says Howard Rubin, CEO of consulting firm Rubin Systems Inc., who assisted in the survey. Rubin is also a research fellow for Meta Group and chairman of the computer sciences department at Hunter College of the City University of New York. "Everyone is behind," he says. The average slippage is about 12% among companies, meaning they are 12% behind in hitting key milestones with their year 2000 work.

The biggest laggards are in the government, health care, utilities, and transportation sectors, according to the survey, while the winners so far in the year 2000 preparedness race are software developers, financial services firms, computer makers, manufacturers, and telecommunications companies. Ranking in the middle are aerospace, oil and gas, pharmaceutical, and distribution companies. In general, small and medium-sized companies are furthest behind in their compliance work, Rubin says. However, the work that these companies need to do in general is not as complex as the projects in larger firms.

Because IT organizations are running out of time to fix year 2000 bugs, they need to reexamine priorities of compliance work, Rubin says. Among the top six priorities listed by survey respondents were conversion and testing of mission-critical systems; creating an operational environment; ensuring network and desktop integrity; assessing the year 2000 status of vendors and business partners; assessing and acting on supply-chain issues; and developing contingency plans.

Although contingency planning is on the list of top priorities at most companies, very few have actually developed those plans, Rubin says.

As for their relationships with supply-chain and other partners, 55% of the survey respondents say they may discontinue business with "suppliers of products and services" who are not compliant by key deadlines.

"Anyone who can't be compliant by the first quarter of 1999 puts us at risk," says Charles Wiberley, manager of IS at the PMA Group, a Blue Bell, Pa., insurance company that participated in the survey.

--Marianne Kolbasuk McGee