Year 2000: Conference : systems compliance must not be left to IT staff

Achieving Year 2000 systems compliance is the responsiblity of business managers, not IT staff, according to speakers at a New York millennium conference last week.

Speakers at the Software Productivity Group?s Year 2000 Conference and Expo emphasised that unless general business managers are charged with leading systems conversions programmes, their efforts at compliance will be seriously undermined and may ultimately fail.

?IT people cannot be expected to make strategic business decisions. There are a million and one solutions for the Year 2000 problem, but only a few that are appropriate for the business,? warned Willaim Ulrich,president of consultancy Tactical Strategy Group. ?Companies must get their business people involved at the upfront planning level. Being overly technical is what got us into this mess in the first place. A simple technical problem, had it been addressed years ago, had evolved into a business problem of major proportions.?

It was a point that was reiterated by Thomas Klein, vice president at investment bank JP Morgan in charge of Year 2000 programmes, who urged: ?The solution to this problem needs a partnership of business and IT to prioritise what?s needed to become compliant.?

Klein said that identifying key business processes was a vital first step in achieving an effective assessment of which systems need fixing and in what order work should take place. Every organisation must identify all date-related code in all systems, regardless of age and including systems with interfaces to elevators,telephones and fire alarms.

One of the major issues with the Year 2000 problem, according to Klein, is that systems can go wrong without appearing to do so. ?This is not a crash and burn situation in every case,? he warned, highlighting desktop software such as spreadsheets as an example. ?Failure does not mean shutdown.?

Such applications have been downloading data from central systems for years and will continue to do so even if that data becomes corrupt. ?They will continue to do their calculations, but they will be doing the numbers wrongly,? he said.

To avoid such problems, all internal interfaces must be examined and prioritised for their impact on the main business processes. ?The Year 2000 is a business problem, the resolution of which will enable our businesses to continue to function,? commented Klein.

But with time running out to convert every system in an organisation, Ulrich advised that all management teams must develop fallback positions and contingency plans to ensure that the business can continue to operate with some degree of normality. ?Contingency planning shifts the decision as to how to handle the Year 20000 problem from the IT department to business executives,? he said.

Creating such a contingency plan means putting together an inventory of all systems and carrying out a risk assessment of them to identify the legal, financial and regulatory risks that will be involved with their failure.

According to Ulrich, this risk assessment process has to be carried out by non-technical management, which has the added benefit of solifying sponsorship and funding for Year 2000 projects at senior executive level by exposing them to the risks of systems failure in business terms they can understand.

During the process of establishing an effective contingency plan, the basic business model by which a company has been run may need to be altered in order to reduce a business areas dependency on particular systems. This is not a bad thing, said Ulrich, who predicted that Year 2000 projects will result in a lot of redundant applications being exposed within organisations. ?A lot of things in a business are done just because that?s the way they have always been done,? he said.

Involvement of businsess people will open up new possibilities for achieving effective millennium compliance other than the basic technical fix. Ulrich cited the example of an unnamed bank which could not justify the cost of fixing the Assembler-based systems in its only marginally profitable leasing division.

The technology solution was simple,.but time consuming. But the business solution was to redefine leasing as a non-strategic proposition and to sell the unit to another company which already had Year 2000 compliant leasing systems to which the bank?s data could be transfered.

?The bank profited from the sale and avoided a multi-million dollar system upgrade,? concluded Ulrich. ?It was a business decision by business people. The Assembler system problem just went away.?

Third party interfaces have to be examined, particularly with external suppliers. Ulrich cited Boeing to illustrate his point, noting that a 747 plane has one million separate parts from different sources. If one of those suppliers has non-compliant systems, the knock-on effect will undermine your business. Make your suppliers demonstrate their ability to fix their own systems, he urged, and if they cannot do so, then find another source of supply.

But time is running out to set up such contingency schemes, he concluded. Such planning demands major upfront work by business analysts to ensure that every mission critical system has a fallback option, so plans need to be created this year, warned Ulrich.

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