The world has become a global community in more ways than one. For example, each country’s economy now relies on a sophisticated network of buyers, sellers, shippers, financial service providers, government agencies, utilities, and others. And linking these essential pieces are vast and complicated computer systems.

Keeping this computer network operating smoothly is essential. In fact, a breakdown could disrupt the continuity of trade and commerce on a massive level.

The Y2K Menace

As midnight of December 31, 1999, approaches, U.S. exporters need not be overly concerned. Your export business with major foreign markets is unlikely to be involved in a Y2K snafu.

Y2K refers to the inability of older computers, which read years by the last two digits, to recognize the difference between the years 2000 and 1900. When the 1999 changes to 2000, it’s feared some systems will malfunction or quit. However, since 1997, there has been a concentrated drive to correct billions of lines of computer code.

Most multinational corporations in countries around the world have addressed the Y2K problem. However, many small and medium-size enterprises have not. Exporters dealing with them should find out what remediation efforts have been taken.

All Countries Have Made Some Progress

According to several public and private organizations that tracked country progress on Y2K compliance, all countries have made some effort to correct the problem. But, unknown is how thorough many developing countries have been in their efforts to upgrade their software, especially in vital sectors such as banking, utilities, transportation, government administration, and security.

Which Countries Are Most Prepared?

Various international monitoring groups have singled out those countries judged to be ready, or near ready, for 2000. They include Argentina, Australia, Belgium, Brazil, Britain, Canada, France, Germany, Hong Kong, India, Ireland, Israel, Singapore, South Africa, Switzerland, United Kingdom, and the United States.

In fact, both public and private U.S. sectors have aggressively fixed their computer systems, thus limiting serious disruptions of power, telecommunications, financial services, or food supplies.

Which Countries Are Least Prepared?

China, India, and Indonesia have made sufficient preparations to deal with the millennium bug in many sectors. However, they still require some improvements in their energy sectors. If disrupted, this would leave people without heat or electricity — and could bring turmoil.

Several countries in Latin America, Asia-Pacific, and Eastern Europe have made little progress in complying with Y2K. But Russia, with its attitude, “We’ll fix it when it breaks,” is viewed as a most serious case by most monitoring organizations.

Do You Have a Plan?

Countries that are not yet in the final stages of testing programs for Y2K errors may not fully achieve Y2K compliance by December 31. And some of those that seem ready, may not be. In preparation for potential problems, many companies already have integrated contingency plans in their Year 2000 management strategies covering both front- and back-office operations.

If your company has not yet established a plan, start making one now. And consider what steps you may take if disruptions occur in your export markets. But first, consider actions you’ll take if disruptions occur in-house — and especially if they affect routine business processes involving customers and employees. These plans don’t have to be particularly elaborate, but they do need to be thoughtfully designed and clearly understood.

Don’t Omit the Details

The Gartner Group of Stamford, Conn., recommends that companies establish contingency plans for all systems and activities designed to handle Y2K-related disruptions. In doing so, create contingency and disaster recovery programs that are synchronized with possible failures. Once the key processes that require a contingency plan are identified, plans should, at a minimum, include two components: a descriptive scenario and a detailed work plan.

The descriptive scenario should address both the severity and potential duration of the failure. This description must be very specific to avoid debates about whether to actually execute the plan, especially when time is of the essence.

The detailed work plan should be well thought out. For example, if a major date-sensitive technical asset fails, like a bank loan scheduling system or a payroll system, the contingency plan should not be simply, “Process manually.” Instead, it should answer the questions: how will this be done? Who will perform the work? And where in the office will the work be performed?

The work structure must be detailed enough to ensure that people will take action quickly. And, it should also be rehearsed so it can be performed rapidly and efficiently. Importantly, have the right resources available. For example, if a process must be performed manually, additional workers may need to be recruited.

In addition, workers will need to be equipped with all the necessary supplies to complete their tasks. Simply declaring a process should be manually performed if a Y2K glitch disrupts the automated process doesn’t guarantee it will be, especially if the right resources aren’t immediately available.

Monitor Your Systems After 2000

Even after 2000 begins, a complete cycle covering most transactions may take most of the year to complete. It may even take one full year just to uncover Y2K code and data defects. A few areas where systems may be most vulnerable to Y2K include:

  • Applications that had not run for years, running for the first time in 2000
  • Noncompliant packaged software released to the market
  • Running noncompliant archived data on compliant systems and running systems that have not been adequately tested.

New Zealand First With 2000

While no one knows for certain what will happen as the final seconds tick off 1999, New Zealand, just 185 miles from the international date line in the Pacific Ocean, will be the first country to face the new millennium. What occurs in New Zealand will be closely watched as a bellwether for what may follow in other countries as midnight moves westward around the globe.

Few believe essential computer systems will fail, sending countries into blackness, disrupting transportation and financial systems, stopping medical life-support operations, and generally bringing chaos and mayhem. Yet, few also believe there will be no repercussions. And even though they may be slight, being prepared will lessen the effect.

This article appeared in October 1999. (CB)
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella is a world-recognized author and speaker on global business, emerging risks, and the latest economic trends. He's also founder of both the ManzellaReport.com and Manzella Trade Communications, Inc. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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