ITAA's Year 2000 Outlook April 24, 1998 Volume 3, No. 16 Published by the Information Technology Association of America, Arlington, VA Bob Cohen, Editor bcohen@itaa.org Read in over 60 countries around the world ITAA's Year 2000 Outlook is sponsored in part by BDM International, Inc., CACI International Inc., DMR Consulting Group Inc., IBS Conversions, Inc., Softworks, Inc. and Y2Kplus, Inc. IGs Air Doubts at House Appropriations Committee Hearing Appearing before Congress this week, a group of federal agency inspectors general expressed concerns about the ability of their respective agencies to achieve Y2K compliance. The House Committee on Appropriations Subcommittee on Labor, Health and Human Se rvices and Education and Related Agencies conducted the hearing. Labor Department Inspector General Charles C. Masten said "I am very concerned about the potential impact inadequate Year 2000 progress may have on the Department’s ability to provide services beyond December 31, 1999.I am especially concerned about DOL benefit payment systems for Job Corps students; and injured coal miners, longshore and harbor workers, and Federal employees and their families." "I must say that I have serious concerns as to whether DOL will be Year 2000 compliant or have the necessary contingency measures in place to ensure continuity of operations," Masten said. Department of Education Acting Inspector General John P. Higgins, Jr. saw more of an upside for his agency’s Y2K prospects. "I cannot say with certainty at this stage," he said, adding, "Clearly the Department is behind schedule when measured against the OMB milestones, but, in my opinion, the goal of implementation of its mission critical systems by March 1999 is attainable." Higgins pointed out that the Department has only 14 mission critical systems, albeit large and complex, and most are outsourced. Thomas D. Roslewicz, Deputy IG at Health and Human Services refused to predict an outcome for his agency, pointing out obstacles in business continuity and contingency planning, workload and resource priorities, testing strategies, certification and re-ce rtification and scheduling. Not all speakers offered troubled forecasts. Social Security Administration IG David Williams said his agency’s progress on Y2K will ensure that SSA is equipped to provide service into the next millennium. Subcommittee Chairman John Porter (R-IL) responded to the testimony by predicting the major national news magazines will run Year 2000 cover stories in September 1999. Porter said his goal is to have no federal agency in those stories. Surveys Find Canadian Small Businesses Miss Call to Action Despite "A Call to Action" issued last February by a major industry group, just six percent of Canadian small businesses have a plan in place to deal with the Y2K issue. As first reported by Newsbytes, Statistics Canada and the Retail Council of Canada b oth released surveys indicating that less than 90 percent of these firms are not taking action-despite the fact that 90 percent of Canadian firms are small businesses. Among larger concerns, the story is not much better. Statistics Canada found that onl y 20 percent of mid-sized firms have a formal Y2K plan in place. The Task Force Year 2000 report to Canadian Industry Minister John Manley urged swift measures to head off catastrophic computer failures. Retail Council CEO Diane Brisebois said not takin g action is a "grave mistake." Liability Legislation Stalls in California Assembly A bill in the California Assembly to limit the financial liability of software vendors for Y2K liability has stalled in the Judiciary Committee on a 6 to 7 vote. A spokesperson in the office of Assemblyman Brooks Firestone, (R-Los Olivos) author of the me asure (AB 1710), says the legislation is not dead and may be re-introduced with amendments. Assembly procedures allow legislators 15 days to request reconsideration and another hearing on the measure is expected May 5. A source close to the proceedi ngs said committee democrats remained concerned about the scope of the bill and the protections provided. Navy Launches New Estimate The Navy has increased its cost estimate for Y2K repairs by $128 million since last October, according to Defense Daily. With the total tab to fix 812 mission critical systems now pegged at $421 million, the Navy is navigating a 44 percent increase in Y2 K expenditures. Companies Go Public With Slow Progress Research conducted on securities filings of public companies indicates 60 percent of firms have not completed their Y2K assessments and 45 percent anticipate adverse material impact from incomplete projects. Triaxsys Research LLC compiled information from the public filings made by the nation's 250 largest companies. The information includes Form 10K filings with fiscal years ending in December 1997. The research also found that while these companies have p rojected total Y2K expenditures of at least $33 billion, only 20 percent of this total has been spent to date. The average Y2K program will cost the 250 largest companies $131 million. Among other key findings released this week by Triaxsys, "Nearly half of the surveyed companies either did not disclose their Year 2000 program status or supplied meaningless boilerplate information, giving investors very little on which to base Year 2000 investment judgments. Triaxsys also says that these corporate giants have started their conversions late and made little progress. Of those reporting, the researchers found that 34 percent began their Y2K programs last year. Only two percent launched programs prior to 1995. Of those disclosing status, 58 percent are in the assessment phase. General Motors was cited by Triaxsys as an example of a company making least progress on its conversion efforts, with $565 million in total costs and just $42 million-or 7 percent-of its cost incurred through 1997. The research firm lists First Chicago N BD as making the most progress, with $45 million spent on a conversion program totaling $100 million. Meanwhile, a poll also released this week by ZD Market Intelligence finds that few large enterprises can tout completed Y2K projects. The company surveyed 2,441 such organizations and over 19,000 locations, finding only 17 percent of sites can lay claim to a completed Y2K project. Twenty-one percent of sites contacted said they have no plan or need to address the Y2K issue. States Report Y2K Spending A "Quick Survey" of state Y2K remediation efforts released last week by the National Association of State Information Resource Executives (NASIRE) shows New York and California leading the list of top spenders. At an estimated $250 million, New York is s pending over five times as much as reported totals for states like Pennsylvania, Wisconsin and Minnesota. Rounding out the top five spending states are: California at $243 million, Connecticut at $135 million, North Carolina at $132 million, and Texas at $110 million. Arizona, Maryland and New Jersey have all estimated their spending at $100 million. Those states estimating that they will make their repairs on a comparative shoestring are North Dakota at $2.1 million, Montana at $3.2 million and Sout h Dakota at $3.7 million. Additional analysis of the NASIRE survey by ITAA suggests that Connecticut, Oregon and Wyoming are paying significantly more per capita for their Y2K conversions than other states, at $41.23, $29.29 and $28.11 respectively. Lowest per capita spenders are North Dakota ($3.27), Montana ($3.68), and Pennsylvania ($3.98). Several states reported 100 percent completion with their assessment phase of the work. On the trailing edge of the remediation parade are Kansas with just 22 percent of systems assessed, Maine with 36 percent, New Mexico with 42 percent, and Wyoming and Puerto Rico with 50 percent. States not reporting their status were Alabama, Alaska, Hawaii, Louisiana, Oklahoma, and Vermont. SIA Report Puts Y2K in Perspective A new report prepared for the Securities Industry Association by the Tower Group finds that the Year 2000 software conversion is one of three issues that will dominate the securities industry’s IT resources through 1999. Other top issues are the euro con version and the Automated Customer Account Transfer System (ACATS). Year 2000 leads the SIA's list of most difficult industry-wide projects, just ahead of the euro and Order Audit Trail System (OATS). Industry-wide testing and staffing are the leading c oncerns associated with the Y2K issue. The report notes that firms in the securities industry employ 37,000 full-time technology professionals and spent $12.7 billion on IT last year. The report identifies nine infrastructure and regulatory projects (including Y2K) confronting the securities industry, accounting for 14,740 person years between 1998 and 2000 or 33 percent of internal IT development staff time. The report estimates firms will spend 8,816 person years on Year 2000, more than four times as much time as allotted to the next closest priority, the euro conversion. Y2K is expected to consume over 19 percent of firms' 1998 internal IT resources. The report calls the magnitude and complexity of Y2K testing "daunting." "There are currently more than 5,400 US-based securities firms, with 400 firms having direct connections to NSCC (National Securities Clearing Corporation). Each of these firms sup ports direct electronic links with multiple parties. Every firm that is electronically linked with another firm, client, supplier, exchange, utility, depository, or clearing agent must extensively test their remediated applications by exchanging a specif ically determined set of Y2K compliant business data." The report concludes that three industry initiatives, decimalization, OATS and T+1 (a reduction from three days to one in the time required to settle a trade), cannot receive the attention required before 2000. "The consequences of trying to implement too many initiatives too quickly could be severe," it states. Grove Says Y2K Could Get Ugly Intel Chief Executive Andrew S. Grove told the Washington Post this week that the federal government faces an "ugly" situation if it does not pick up the pace on its Y2K conversion efforts. In a meeting with Post reporters and editors, Grove suggested th at Congress convene weekly hearings with each branch of government to discuss how the problem is being handled. Grove said Intel is spending approximately 20 percent of its IT budget on Y2K repairs. Federal Y2K "Czar" John Koskinen said the government will be prepared and that all mission critical systems will function effectively. New Jersey Group Fights Millennium Bug Technology New Jersey, a high tech association, has formed Task Force 2000 to speed statewide action on the Year 2000 software conversion crunch. The new group will conduct seminars, disseminate best practice case studies and provide other learning oppor tunities. Task Force supporters include Prudential Insurance of America, the Office of Thrift Supervision, AT&T, IBM, Digital, and Sun Microsystems. Closer to Home Cisco Systems' IOS Technologies Division and Ultradata Corp. have received ITAA*2000 certification. ITAA*2000 is the industry's century date change certification program. The program examines processes and methods used by companies to perform their Year 2000 software conversions. Both firms participated in a rigorous evaluation of their approaches to date conversion, with extensive analysis in eleven discrete process areas deemed necessary to a successful Year 2000 conversion. Business to Business SCB Computer Technology, Inc., Memphis, TX, has been awarded a $4.4 million Y2K contract by the Arkansas Blue Cross Blue Shield. Millennium Strategies Group LLC, San Diego, CA, has entered into an agreement to have its Y2K Self-Assessment Tool Kit distributed on a global basis by J&H Marsh & McLennan. INTO 2000, Inc., New Orleans, LA, has announced the availability of INTO2000/INVENTORY (I2K/I), their Y2K solution for the AS/400 platform. The company, in partnership with REAL Applications, Inc. also announced the availability of "The Time Machine," a nother Y2K solution for the AS/400 platform. Keane, Inc., Boston, MA, has entered into an acquisition agreement with Bricker & Associates, Inc. Alydaar Software Corporation, Charlotte, NC, has selected Jack Shiavo as the Director for International Sales. Sapiens International, Research Triangle Park, NC, has won a Y2K contract with Bank Leumi Le-Israel. Platinum Technology, Inc., Oakbrook Terrace, IL, has announced their acquisition of Mastering, Inc. Sponsor Advertising BDM International (TRW Systems and Information Technology Group) Do you need help juggling all your Year 2000 responsibilities? With BDM and our SMART/2000+SM solutions, you have a partner to help address your most critical business priorities and technical requirements - from risk assessment, program management, and conversion, to independent test and compliance validation. We deliver project tracking, configuration management, and control metrics that help ensure enterprise-wide integrity and minimize your risk from start to finish. We have a mature process, a dedicated team, and experience that demonstrate the strength of our solutions. Gain the upper hand now by calling BDM: (800) 794-6085 e-mail: year2000@bdm.com http://www.bdm.com. CACI International Inc. -- Restore 2000 CACI leverages 35 years of information technology experience and over 10 years of reengineering systems - solving the same problems Y2K poses - to offer a total solution to the Year 2000 challenge: Restore 2000SM. The Restore 2000 methodology applies a comprehensive three-phase process to your information systems: Assess, Plan, and Remediate. Furthermore, we give you the option of buying our methodology or our services - both backed by CACI experience and Y2K expe rts. The Restore 2000 methodology is ITAA*2000 certified. In addition, software development processes at CACI have been independently certified as being at Level 3 of the Software Engineering Institute (SEI) Capability Maturity Model. Achieving SEI Level 3 p rovides clients further assurance that CACI solutions successfully and effectively deliver Year 2000 compliance while allowing you to save money, reduce risk, and minimize systems disruption. With approximately 3700 employees worldwide and FY97 revenues in excess of $270 million, CACI provides a depth of experience and expertise you can rely on. We've performed Year 2000 conversions for many of America's biggest enterprises, including major he alth insurance providers, retail clothing manufactures, gas companies, airlines, and government agencies. Superior functionality backed by decades of experience - CACI's Restore 2000. Worldwide Headquarters 1100 North Glebe Rd. Arlington, VA 22201 http://www.caci.com e-mail:npeters@hq.caci.com DMR Consulting Group Inc. DMR Consulting Group Inc.(formerly DMR TRECOM), an Amdahl company, is a global consulting organization of nearly 8,000 employees providing a comprehensive range of information technology services. Our Year 2000 Practice comprises a comprehensive offering of consulting, assessment, remediation, testing, and implementation services utilizing a formal methodology (APM/2000), best-in-class software tools, and six global conversion centers. We have mul ti-disciplinary experience in most mainframe, mid-range, and client-server/desktop environments. APM/2000 includes: · Program Management · Enterprise-Wide Assessment · Impact Analysis · Conversion Delivery · Testing and Implementation Year 2000 Risk Management Consulting Services include: Program Review, Stakeholder Readiness Assessment, Risk Management and Vendor Compliance Research. Contact: Stephen Frycki Managing Director, Year 2000 Services - US Phone: 201-200-3923 Fax: 201-200-9046 Email: fryckis@dmr.com Websites: http://www.dmr.com IBS Conversions, Inc. IBS Conversions, Inc., founded in 1982, is the first service organization to receive ITAA*2000 Certification. IBS is a recognized leader in automated conversion/migration software and consulting having translated millions of lines of code for companies worldwide. IBS/Solution 2000 IBS/Solution 2000TM is a full suite of Year 2000 services and products: Full project Analysis, Pilot Project and Repair, staffing and management/methodology Scan/Repair Conversion Factories for Mainframe and AS/400 environments Project Methodology Qwik-Sizer Analysis Licensing Scan/Repair Tools for AS/400 Y2K Projects License Conversion Factories/Tools to other Consulting Firms http://www.ibs2000.com SOFTWORKS, Inc. HOT DATE 2000/SIMULATE Preparing for the new millennium isn't easy, especially in the data center. Ensuring an accurate conversion could be a daunting task. That's why SOFTWORKS has created HotDate 2000/SIMULATE. HotDate 2000/SIMULATE is a comprehensive identification, testing, and simulation utility created to locate the programming changes needed to prepare for the Year 2000. Using a simulated Year 2000 environment, HotDate 2000/SIMULATE locates and tests poten tial date problems the Year 2000 will cause to your individual programs, applications, and entire system. HotDate 2000/SIMULATE is transparent to your applications and supports all programming languages. For more information about HotDate 2000/SIMULATE, call SOFTWORKS at 800-727-4422. Http://www.softworkscc.com Y2Kplus, Inc. Y2Kplus provides a portfolio of "best of class" software products and outsourcing services that address Year 2000 issues. These offerings are available both to IT Solution Providers and IT organizations. Y2Kplus has offerings that address the following needs: Our offerings include: * Year 2000 risk assessment * Mainframe inventory verification & code remediation (COBOL, Natural, Assembler & PL/1) * Midrange COBOL remediation (DEC, HP, UNISYS, Wang, DG, NCR, Bull & Tandem) * AS/400 remediation (RPG & COBOL) * Networked PC Year 2000 Analysis tools Applications: Access, Excel, Foxpro, Lotus 1-2-3 Languages: Basic, Visual Basic, C, C++, dBase, Clipper, Paradox PC Hardware, BIOS & Operating Systems * Testing: Tools: Data Commander for future date testing, TCS (Test Control System), Services: Test management & execution, Facilitated Test Planning, Test strategy. For more information, please send email to info@y2kplus.com, visit our web site at www.y2kplus.com or call Dave Ehlke at 781-863-8111. Calendar http://www.itaa.org/y2kcal.htm ITAA's Year 2000 Outlook is published every Friday to help all organizations deal more effectively with the Year 2000 software conversion. If you would like to receive this free publication, please sign up on the web at https://www.itaa.org/transact/2kout looksub.htm. Copyright ITAA 1998. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300, Arlington, VA 22209. Internet: http:\\www.itaa.org