millennium bug

Getting Ready for Y2K

by Fred E. Foldvary, Senior Editor

Friday, October 1, will start fiscal year 2000 for the federal government. The global economy will be in its last quarter of the year, and the world will be marching inexorably to Y2K, year 2000. Households, businesses, and governments have spent billions of dollars to fix the computer problem of a two-digit year.

We are getting statements that the financial system and utilities will be ready, although qualified that there are no guarantees. But many of these reports are just "boilerplate," standardized and pre-packaged generalities, and some are misleading or premature. For example, the US Social Security system was declared ready, but it turns out that the SS Administration is still correcting errors.

The American Bankers Association has even written a Y2k sermon for churches to use saying that the banking system is safe. While it's good to avoid panic, the fact that bankers are using religion to help calm the public may itself raise questions about how ready they are. Have you ever heard a sermon telling us not to worry about natural disasters such as hurricanes and earthquakes?

A recent survey of large US companies and government agencies found that many of the respondents are expecting a negative economic impact from Y2K. They are even more pessimistic than they were 18 months ago.

Even if a large firm is Y2K-ready, if its suppliers are not, then its operations will suffer. And surveys have found that many small companies are not sufficiently testing and fixing their computer systems. Many enterprises and governments in Asia, Latin America, and Eastern Europe are also in danger of not being Y2K-compliant.

Many organizations which are busy fixing their computer systems are facing delays in their schedules. As any computer programmer knows, when a large system has to be changed, often they do not meet the deadline because of unforeseen problems or unrealistic time estimates. And when changes are made to large computer systems, often new bugs, errors, are introduced. Moreover, the real test is in the actual operation, since planned tests of large complex systems cannot anticipate all possible inputs.

Many organizations are now making plans for alternative operations in case their computer systems are faulty or their supplies are blocked. Many organizations have already found computer failures when their new Y2K systems were installed. In some cases, they just went back to using the old system. But that will no longer work in January 2000. More and more, organizations are making contingency plans, but these alternatives will tend to be much less efficient than computerized operations, and some processes have no realistic manual alternatives.

The US Navy conducted a study on how its bases would be affected by possible disruptions of local services. They sent questions to the local utilities, and compiled the results into a database. The spreadsheet is available at http://www.nfesc.navy.mil/y2k, where you may click on the utility master list. The database shows that some cities might have problems with electricity, gas, water and sewerage. And there are many towns and cities not listed because there is no nearby naval facility.

Just think what would happen if the sewage system is down and folks can't use the toilet. People won't go to work if the potties are not flushing. The city's production will be in the toilet until the sewers get fixed.

Then there was a report from the United Nations International Y2K Cooperation Center. It asked 195 countries to report on their Y2K preparations. Most countries, including Germany and Japan, chose not to reply to the request. If they had good news, would you not think they would be glad to report it?

I have a suggestion to ministers, rabbis, priests, and other preacher men. Don't give the banker Y2K sermon. What if the Banker Association is wrong, and there are major problems in January? Then the preacher would look bad, and he would be an accomplice to the public's lack of preparation. What you should tell your congregation instead is, "Think for yourself!"

Prudent supplies of water, food, and medicine are a good insurance against disruptions, such as caused by natural disasters, even without Y2K. Keeping some savings in safe vehicles such as US treasury bill funds may also be prudent. Such low-cost preparation seems to be the golden mean between the extremes of just ignoring the problem and going berserk with costly stockpiles.

-- Fred Foldvary      

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Copyright 1999 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.