Shell warned the UK government this week that skills shortage and lack of vendor support are threatening its attempt to be millennium compliant.
Giving evidence to the science and technology select committee inquiry into the Year 2000 and computer compliance, the petrochemical giant said that these factors, and widespread ignorance of the issue, are not only jeopardising Shell?s chances of achieving compliance, but are even more serious for smaller companies.
Malcolm Brinded, oil and technical service director of Shell and chief witness at the inquiry, said that the rising cost of internal and external staff, together with an increasing scarcity of appropriate skills, means some smaller organisations may face severe problems in achieving compliance.
Pointing to the huge effort involved in making the systems architecture underlying applications compliant, Brinded said that significant dialogue with hardware and software manufacturers is needed to establish the compliance status of their products. This, he said, is happening with a ?mixed degree of success?.
?It is clear that some companies are more advanced in their ability to commit to a compliance strategy and deliver the corresponding upgrades. The failure of computer software and hardware manufacturers to deliver a clear statement of intent will compromise the ability of organisations to deliver fully compliant systems,? he said.
Outlining Shell?s own plan, 'Year 2000 Survival Action Guide' - which is expected to cost #30-#40 million - Brinded said that the main impact will be on its embedded systems, where around 50 per cent of chips are business critical. He said that it was impossible to eradicate all associated problems, but the aim was to reduce them to manageable levels. The plan has a high profile within Shell and has genuine board interest, he added.
Despite the size of the bill, Brinded stressed that the costs should be seen in context of the magnitude of the problem. ?If a single offshore platform were to fail, deferred production could run to #1 million a day. If the St Fergus gas plant were to fail, a large part of the North Sea would be instantly inoperative,? he said.
While acknowledging that the effects of the millennium problem on business computing applications are still important, Brinded claimed that ?this is unfortunately believed by many to constitute the whole problem?. Shell?s expenditure on business computing compliance is expected to be around #5.5 million - only about 15 per cent of the total.
Shell is also heavily reliant on operations that are contracted out, and so is vulnerable to third parties? Year 2000 problems. The company is seeking assurance that both suppliers and customers have viable Year 2000 plans.
Shell is the first big industrial player to give evidence to the committee, which was set up in October last year to assess the nature and extent of the problem. Further contributions from IBM, the Federation of Small Businesses and the British Bankers Association will be given in the coming weeks.
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