Small and medium sized businesses in the UK have a complacent attitude towards the millennium bug because of the barriers they face in resolving the problem, a government committee has been told. Giving evidence to the Science and Technology Select Committee investigating the millennium problem this week, the Federation of Small Businesses (FSB) stated that many SME?s face an uphill struggle in planning and undertaking a millennium action plan because of the constraints of being relatively small. This, they say, is the reason why many SME?s have a complacent attitude towards compliance and can possibly explain the luke-warm response to initiatives from bodies such as Action 2000. Whilst accepting that ultimate responsibility lies with the individual company, the FSB have called for direct government intervention, through tax concessions and legislation to ensure all goods potentially vulnerable to date change problems are compliant, in order to overcome these barriers. Barry Hickey of the FSB business development committee explained that the first problem encountered when tailoring an initiative for the smaller company is the actual term ?SME?. ?There are over 1.5 million SME?s in the UK. The term is too wide a bracket?, comments Taskforce 2000 boss Robin Guenier, ?The problems I might face running a one man business with a couple of PC?s are nothing compared to a company with fifty employees and a complex pay-roll or stock ordering system.? In this respect, the FSB is working to sectorise its 100,000 members and ranking them according to their millennium exposure. This, says Hickley, will enable them to isolate where the problems are and establish what needs to be done. The FSB also claim that SME?s face huge time and cost constraints because of their relatively small stature. ?SME?s are increasingly becoming dependent on IT to maintain their competitiveness,? says Hickey. ?Unfortunately the day to day running of the company is often a full time job in itself. Directors can?t afford to take time out to do a risk analysis of the company?s IT systems.? Some suggest that the soaring cost of skills associated with the Year 2000 is also pricing SME?s out of the market. ?Some smaller organisations may face severe problems in achieving compliance if they are unable to meet manpower costs,? said Malcolm Brinded, oil and technical services director at Shell UK. Hickey suggests that the skills shortage is perceived to be worse than it is, and could be resolved by better organisation of the resources available. ?There are many resources throughout Britain, which could be used effectively from home by use of the Internet and the communication links which are already in existence,? he said. Stewart Halliday, also of the FSB development committee, said that many small firms have been playing a waiting game to see what millennium strategy larger companies adopt so that efforts are more co-ordinated, and this can account for the somewhat delayed response of SME?s to the problem. ?However, many small firms simply have not bothered, claiming that its too late to do anything about it anyway. Sometimes it is like banging your head against a brick wall,? he added. Despite the efforts of Action 2000, Taskforce 2000 and other bodies, there is strong evidence that an alarming number of SME?s have a complacent attitude to the Year 2000. Of the 6000 small or medium clients on IBM?s books in the UK, around 50 per cent are ?unprepared? for the millennium, that is, they currently have no project that will establish whether their supply chain or information system is exposed to date change problems. This is not to say that there is a problem with awareness, rather that there is a lack of understanding of the problem. ?All our surveys show that awareness on a superficial business level is very high, but actual understanding of the problem, especially at a high company level, is poor,? says Guenier. ?The bottom line is that SME?s feel they don?t have much of a problem,? said Cliff Smith, vice president of compliance solutions company Millennia III. ?They think that because the size of their IT systems are not on the scale of large companies, any project to resolve the problem won?t take as long. We are not seeing the implementation of strategies and policies, and given that testing can be 50-60 per cent of the problem, many are leaving it too late.? Many of the efforts to date to encourage SME?s to develop Year 2000 programs have concentrated on pooling resources to raise awareness. The CBI for example, has just issued its ?Millennium Brief? of key considerations and steps to achieving compliance for the SME, which include a range of case studies from blue chip companies. IBM is pursuing a proactive ?best practice? approach to provide advice and guidance for small firms. ?It is certainly not the case that suppliers are waiting for clients to come to them,? said Chris Moore, Year 2000 manager at IBM. And Shell UK is going a step further by working with 5 SME?s in the IT sector in Aberdeen as part of their own ?Year 2000 Survival Action Guide?. Action 2000 has responded to criticism that it needs to be ?doing? rather than ?talking?, with the launch of a range of self help initiatives for the SME, including a national hotline, guidebook and web site. Guenier described the initiative as ?extremely valuable?. For companies that require more of a guiding hand, initiatives such as the National Computer Centre?s DTI-backed Business Assurance Scheme (BAS) provide practical consultant advice to assess the extent of millennium exposure, which can then be converted to a plan of action. ?My advice to any SME that has not yet begun a Year 2000 program, is to get in contact with their local business link They will certainly be able to help,? said Tate. ?If a company thinks that it might be affected by the millennium bug, then it is initially up to them to do something about it. They can come to a body such as the CBI who act as a signpost to point them in the right direction,? said Sarah Bales, senior policy advisor at the technology group at the CBI. Whatever the success of the FSB in lobbying the government to intervene directly into the millennium problem, the underlying message from all concerned organisations is that while there is plenty of help available, the initiative rests firmly with the individual company.
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