|
|
|
|
|
|
|
Cost. A midsized company has tens of millions of LOC in inventory. Pilot projects show a cost of $1.10 per executable LOC to fix this bug. Multiplying the estimated number of commercial LOCs by the per-line cost, and adding the costs of data expansion and governmental software conversion produces estimates in the range of 300 to 600 billion dollars. No one is seriously questioning these figures. In fact, more recent estimates (circa mid-1997) are moving the cost toward the one trillion dollar mark. The early estimates of $0.30 to $0.40 per LOC are giving way to estimates in the range of $2.50 per LOC. |
|
|
|
|
|
|
|
|
And that's just direct MIS cost to fix the bug. It does not include lost revenue, legal fees, insurance, etc. The short-selling of stock by worried investors alone will cost billions, even if every single system in the world survives unscathed. |
|
|
|
|
|
|
|
|
Economic effects. The potential effects of Y2K are frightening. A very plausible scenario goes like this: On some date in the near future, computerized accounting systems start failing with the Y2K bug in hundreds of thousands of organizations. Organizations cannot bill or pay. Cash flow dwindles to a trickle, and paychecks cease for most. Inventory systems based on Just In Time (JIT) principles are toast, banks are not operating, and the transportation industry flails. |
|
|
|
|
|
|
|
|
Organizations adopt heroic measures to resuscitate their accounting systems. The task overwhelms many of them, which are critically short on time, cash, and talent. Some fail after one month and many more after two. Businesses that cannot solve their problem in three months are history. Businesses that depend upon the failed businesses fail as well. Even businesses that successfully fix their systems are dragged into failure by those that did not. At some point, critical mass is reached, and the entire economic system collapses in a fast-forward replay of 1929. |
|
|
|
|
|
|
|
|
Legal. Tort attorneys are already salivating over the potential for litigation. There are a number of aspects to this problem: |
|
|
|
 |
|
|
|
|
Responsibility (alias blame). For most corporations, Y2K means significant expense. For the lucky ones that solve Y2K, this merely translates into stock-holder discontent; for the unlucky, loss of market, serious reverses, and even failure are possible. |
|
|
|
|
|
|
|
|
Y2K is simple to understand, predictable, and avoidable. It may not be difficult to prove that management is, or was, negligent or incompetent in these circumstances. A wave of post-Y2K litigation could swamp the legal system for years. Anyone who believes that this process will be simple or cheap is ordered to return to his home planet immediately. |
|
|
|
|
|
|
|
|
The complication in all of this is that the relevant decisions were generally made in the 1960s or 1970s. Those who made them are safely retired or working elsewhere. Clarity is fatal to management's position in this issue, so the "disappearing man" will undoubtedly be used to generate smoke. |
|
|
|
|
|
|
|
|
One critical issue that will emerge is the question of why management waited until the last moment to address the problem, instead of addressing it |
|
|
|
|
|