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There are three basic stages to this process: |
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Preparation. Inventory applications, determine where Y2K occurs, decide on a course of action. Prioritize. |
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Implementation. This stage is further analyzed as identification, code correction, verification, and data correction. This stage is amenable to automation. Use it. Automated procedures can fix perhaps three-fourths of the involved code. The rest requires sending in the programming infantry. |
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Deployment. This stage involves system testing and placing code into production. Phasing in corrected systems is extremely difficult. |
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Because cost is going to be horrendous, most organizations will not want to properly report costs specifically associated with modifying internal-use software. One way to avoid this accounting problem is to capitalize the problem, rather than expense it. |
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Specifically, it may be possible to replace affected software by purchasing a new package. Older systems may be replaceable with clientserver systems. The Financial Accounting Standards Board has already addressed this issue, however, via its Emerging Issues Task Force, which concluded that costs associated with modifying Y2K software should be "charged to expense as incurred." |
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Likewise, from a legal and accounting perspective, it makes sense to carefully review software maintenance contracts. Whenever possible, the costs should be off-loaded to contractors. The difficulty with this approach, of course, is that it does not guarantee an actual fix or relieve an organization of the necessity of producing one in real life, regardless of what a contract states. Mergers and acquisitions may muddy the waters considerably. Sellers may still be liable for damages to acquired companies. |
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An additional wrinkle in contract software is the issue of added functionality. Some contracts permit maintenance, and Y2K may fall under that rubric. If functionality is added at the same time, the contractor may insist on additional fees under the terms of the agreement. |
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The review of contracts should look at an organization's general liability insurance coverage. Insurance will not generally cover the cost of a Y2K fix, but it may pay for consequential damage. |
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A major problem with Y2K is finding any opportunity. Most organizations will spend a bundle just to be able to open their doors for business on 2 January 2000. Finding an upside is difficult. Basically, the cost of a fix will either be paid, or an organization will be out of business. It makes sense, therefore, to scrap existing systems and upgrade functionality wherever possible in order to recoup benefit. |
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Whatever strategy one chooses, the one that will definitely not work is denial. Several investigators have found that a surprisingly large number of organizations simply refuse to believe that a "minor" problem can bring the organization to its knees. Others have opted to wait for the "silver bullet" that will fix their woes at the last minute. And there are the CIOs who are retiring next year and simply don't want to get involved. |
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