[QQ]As the recent crash of the Yamaichi Securities bank in Japan shows, a local disaster can send significant ripples across the financial world.[QQ] So what would be the effect if two, three or even more major financial institutions failed, if several corporates fell, or thousands of smaller firms went into bankruptcy? Potentially, in 2000AD we face something much worse, because these individual difficulties could easily combine to bring about a global catastrophe of epic proportions.[QQ] The Year 2000 problem may not cause planes to fall out of the sky, but it will result in a degree of disruption in international trade and that will have a knock-on effect. How great that effect is likely to be is difficult to gauge: some dismiss it as total hype and scaremongering while others, such as the Gartner Group, predict a major crisis taking with it tens of thousands of UK firms. Even if the truth lies somewhere in between, everyone should be concerned with how to minimise the effect and ensure that their business is not disrupted.[QQ] However, before tackling the problem, it must first be fully understood.[QQ] If nothing is done, when 1999 moves into 2000, software across the world may start to relive the 20th Century. This is because dates have been recorded using only the last two digits of the year and the '19' prefix denoting the century has been taken for granted. This is largely due to the fact that, in the early years of computing, memory was at a premium and the two significant figures of a date could be stored in a single byte of memory, or in two bytes as separate digits.[QQ] In the year 2000, any computer system registering a date of 00 will respond in one of two ways: either it will mistakenly assume it to mean 1900; or, because a zero entry has not been catered for, the program may behave unpredictably or even crash altogether.[QQ] Dates can, and have, been stored in many different ways and this is the main problem facing Year 2000 taskforces. Five programs written by different developers could all have different ways of storing dates - and this could be true even within a single application developed over several revisions.[QQ] Companies most at risk are those which rely on bespoke software, but even the PC world should be wary because spreadsheets and databases may still contain double-digit dates. Only a complete assessment of the software inventory will reveal any problems. Ignore the threat at your peril - it won't go away.[QQ] [QQ] CASE STUDY 1:[QQ] Royal Sun Alliance Broker Division[QQ] ACTIVITIES:[QQ] Insurance[QQ] CONSULTANT:[QQ] Cap Gemini[QQ] USES:[QQ] To renovate all code by electronically scanning program libraries[QQ] Even though we are two years away from the year 2000, there is no room for complacency because, for many departments, compliance will have to be reached before that year arrives.[QQ] Dave Lawson, IT Year 2000 manager for the Broker Division of the RSA, explains: 'We are aiming to have our critical systems ready by September because the insurance renewals process will start in November for us.[QQ] If your insurance goes from 1 January 1999, we will issue a renewal notice in November 1998, and the expiry date will be 1 January 2000,' he says.[QQ] 'So, we haven't got the luxury of two years, and people embarking on a renovation process will have to think about issues like this.'[QQ] Lawson was originally employed by the Royal, which evaluated its Year 2000 position in 1993, aiming to begin the project in 1995. Then there was the merger with Sun Alliance, which meant the project had to be modified to account for the rationalised IT structure of the new company. A plan of action was finalised in mid-1996.[QQ] The planning team recognised that it would need some outside help and expertise because the RSA Broker Division has 8,500 applications, of which 7,500 are written in Cobol for the company's IBM mainframe. Each Cobol application had to be tested for date fields.[QQ] The team investigated the possibility of using Indian software houses to carry out this task, but a pilot exercise did not convince them that this was the direction to take. Eventually, Cap Gemini was selected to help with renovating the code because of the successful Year 2000 track record the company had established in the US.[QQ] The first phase of the Cap Gemini approach is an electronic scan and assessment of the program libraries for date fields and calculations.[QQ] This feeds information into the planning stage which brings the two teams together to work out their strategy. Then there's the renovation phase when the conversion work is done.[QQ] Lawson says he can't over-emphasise the importance of the planning phase: 'We spent a few months debating how we were going to fulfil the renovation phase. Nobody's ever done an exercise like this before and there were things that came out of the woodwork that we weren't expecting,' he says.[QQ] However, Lawson feels that, by taking a careful approach to reviewing the strategy, the company is now in a much stronger position and it was time well spent. 'We not only had to consider the renovation of the code, but also how it co-ordinated with our ongoing integration process to avoid duplication of effort and to be aware of the interdependencies of the two projects.'[QQ] Unfortunately, for many companies time is short and meticulous planning may be a luxury. Lawson predicts that most organisations will end up working on a reactive basis by identifying the most business-critical systems and fixing these first - essentially, trying to do as much as they can in the fast-decreasing time left.[QQ] [QQ] CASE STUDY 2:[QQ] Unisys[QQ] ACTIVITIES:[QQ] Information management[QQ] CONSULTANT:[QQ] None[QQ] AIM:[QQ] Rewriting and testing both legacy and third-party applications[QQ] Although Unisys offers other organisations Year 2000 services, it also has its own internal systems to look after and update. Unisys programme director for the Year 2000 project, Paul Gosling, says there were several legacy applications which had to be renovated, but the problem was eased slightly through the introduction of third-party applications, such as Oracle Financials, two years ago.[QQ] Despite this, there were still a number of large systems that could not be replaced in this way and had to be given the Year 2000 treatment.[QQ] Gosling points out that having expertise in Year 2000 conversions does not mean a company has the local manpower to spare for the project and Unisys has adopted an off-shore approach. 'What we've done is to use our own team which is based in a skill centre that we run in Sofia, Bulgaria,' he explains. 'It was responsible for the assessment and renovation phases, and this is now complete. We are currently testing these systems and this is being done locally by the application owners themselves.'[QQ] In some cases, it was apparent that rewriting would be the only solution.[QQ] 'These decisions were made 18 months ago,' Gosling says, 'and the applications will come on-stream in three or four months' time. It's a time-consuming, but necessary, operation and the problem for companies that are just setting out now is that this option may no longer be viable.'[QQ] This underlines the fact that, as time passes, the options available are gradually being eroded and this could have wide-ranging effects. Gosling says there are a number of large institutions which have still to begin their projects and he believes they are going to have to make some tough decisions about resource allocation. No matter how straightforward the job may seem at the outset, the reality is always more complicated.[QQ] Of his own project, he says, 'The salutary fact is that the project turned out to be bigger than we thought in terms of effort and, that said, we have been lucky with events - which play a big part. It's twice as big as we thought when we originally mapped it out round the table.'[QQ] Much is being made of the role of diagnostic tools, but Gosling thinks these can form a trap for the unwary who may spend more time worrying about which tools are best than they do fixing the problems. 'What is important is the right structure, the right methodology, the right process - securing a business-based prioritisation to the systems that IT work on,' Gosling concludes.[QQ] [QQ] CASE STUDY 3:[QQ] Barclays Bank[QQ] ACTIVITIES[QQ] Banking and financial services[QQ] CONSULTANT[QQ] Cap Gemini[QQ] USES[QQ] Using lessons learnt from Y2K to prepare for introduction of EMU[QQ] As one of the country's major banks, Barclays can't afford to adopt a last-minute approach to the Year 2000 problem. The company has a wide range of mainframe, mid-range and PC systems administered by more than 3,000 IT personnel, which must all be taken into consideration.[QQ] The bank has been addressing its Year 2000 situation since early 1996 through its own resources, but has also enlisted the management expertise of Cap Gemini to help direct the project. If necessary, Barclays can also call upon IBM and DMR Amdahl, the consulting arm of Amdahl, for assistance.[QQ] David Scott, Barclays corporate communications manager of operations and technology, underlines how seriously the company views the group-wide project: 'The importance attached to it is mirrored by the fact that both the chairman and the chief executive are taking a keen interest in ensuring that the problem is dealt with efficiently and effectively. It is probably the number one task in the group right now,' he says.[QQ] 'The model we have follows best practice which says you should aim to be testing all systems by the end of 1998, so we're basically going to allow ourselves a full year of live testing.'[QQ] The involvement of top management is important. First, it gives the project a high profile and binds management and IT staff together in the work, ensuring that it progresses in harmony with the needs of the business.[QQ] Second, it signals to partners and customers that the project is being treated as a priority. People need this reassurance. As Scott points out: 'We get letters from customers asking what we're doing about the Year 2000 issue and you have to respond - you can't just say you've never heard of it. It's growing in importance thanks to increasing publicity: a few months ago people were reluctant to talk about it because either they didn't understand it or they didn't appreciate the scale of the problem, but this is changing now.'[QQ] One thing that seems to be gripping the popular imagination are the tales of impending doom. It has been said that as many as 40,000 businesses could disappear in the UK alone, but Scott thinks such predictions are premature: 'You'll get a better idea of how bad the problem is going to be towards the end of next year when companies move towards the testing stage. This is when deadlines could start slipping.'[QQ] Barclays is well on schedule but, after the Year 2000 projects have been launched, IT systems will once again be disrupted by the need to cater for European monetary union (EMU). Scott believes this will reveal the positive side of the current project: 'We are looking at how we can address EMU right now and where some of the processes and fixes in the Year 2000 project can be applied to EMU as well. I'm not saying the two are going to run absolutely in tandem, but there are areas where you can apply experiences of one to the other.'[QQ] [QQ] ON PREPARING FOR 2000[QQ] - The assessment phase is vital. Involve management to help work out a balanced approach rather than a purely business-biased or IT-biased solution.[QQ] - Recognise that IT staff numbers are calculated to cope with the normal running of your department, and that a Year 2000 project can be time-consuming. Consider external agencies because they have the relevant tools and experience.[QQ] - There may no longer be time to complete all systems. Work out a schedule which tackles applications in order of their importance to the business.[QQ] - Make sure that all applications which access a particular resource can handle the data formats. Don't just expand the database and hope for the best.[QQ] - Replace bespoke software with shrink-wrapped where possible, but remember training costs and business needs.[QQ] - Where necessary, ensure that your suppliers and customers certify that they are Y2K compliant - it may be useful in court later.[QQ] - Make contingency plans for problems that may suddenly appear on 1 January 2000.[QQ] - Be prepared to set up a separate testing area for the modified software and don't put 'live' company data at risk.[QQ] - Start now. The Year 2000 is not necessarily the deadline - some systems may need to be compliant sooner.[QQ] - Cap Gemini: 0171 434 2171.
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