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Y2K plans may be short-sighted, report says

The Year 2000 bug is expected to cause computer failures throughout 2000 and possibly into the following year, leaving most companies unprepared, according to a report released today.

The Year 2000 bug is expected to cause computer failures throughout 2000 and possibly into the following year, leaving most companies with short-sighted contingency plans unprepared, according to a report released today.

The Gartner Group study found that more than 90 percent of global industries in their final stages of planning have incorrectly focused their efforts in the first quarter of 2000--possibly making them vulnerable to other computer catastrophes later on in the year.

"Many year 2000 contingency Back to Year 2000 Index Page and disaster recovery plans cover only a narrow period around January 1, 2000. However, we believe the majority of failures will not occur during this time," said Lou Marcoccio, an analyst at Gartner and author of the study.

"Many of these should begin now or in the fourth quarter of this year and follow through a good portion of 2000. [Companies] are not planning for the broader period."

As a result of their shortsightedness, organizations that limit their contingency-planning efforts may miss other issues that warrant contingency and continuity efforts, according to Marcoccio.

"Their plans, aimed at reducing risk, will actually create a false sense of security that will be rudely tested by failures occurring in 1999 and beyond January 2000," he stated.

Marcoccio detailed the Gartner Group's latest installment of its Year 2000 World Assessment today. With just four months to go before the new year, the survey marks the final published report of the research firm's series on the Y2K issue.

Marcoccio said many computer failures related to the Y2K bug would occur sporadically, over the course of the year, rather than all at once. Because of this, the overall effect of the bug on industry and business should be lessened, he added.

Most system failures are expected to happen in earnest during the fourth quarter of this year through the third quarter of 2000, the report found. Yet Marcoccio still expects sporadic problems from the third quarter of this year even through the first quarter of 2001, in some cases.

Countries getting ready
In this final look at the global Y2K situation, the research body focused on risk management questions, as well as closely related contingency planning.

The study found that the majority of companies worldwide are already engaged in some form of Y2K planning, with little separation between small companies and large firms. The small business sector especially has made significant advances, compared to earlier surveys that found smaller firms somewhat lagging in Y2K preparedness.

Since the fourth quarter of 1998, many countries and other industry sectors have stepped up their contingency planning, showing that the effort to prevent year 2000 computer glitches has kicked into full gear.

This rapid progress can be traced to sentiment that trading partners could scale back operations if Y2K issues aren't taken seriously, the report found. Governments and other trade associations have effectively turned up the heat on year 2000 preparedness plans, according to the study.

Among the countries making the most progress in their Y2K efforts are Argentina, Australia, Belgium, Brazil, China, France, Germany, India, Ireland, Israel, Japan, Mexico, Russia, South Africa, Switzerland, United Kingdom, and the United States.

Remarkably, there aren't any countries that have completely ignored the threat of the Y2K bug and have not made any plans against it, the report found.

"Even in less developing countries we've seen much more progress in all levels the assessment," Marcoccio said. "None of these countries are in the lead, but they have made significant progress."

Marcoccio said he is cautiously optimistic about the overall global Y2K outlook, finding fault with recent predictions, most notably those by ecocnomist Ed Yardeni, who sees a 70 percent chance of global recession because of the year 2000 bug.

"I don?t believe there is a risk of recession," Marcoccio said. He said he does expects computer failures and adverse public reaction to have some impact on the global economy, but not to the extent others are forecasting.

As earlier reported, the State Department plans to begin warning U.S. citizens who live and travel abroad about specific countries that are lagging in their Year 2000 computer preparations.

The Year 2000 problem, also known as the millennium bug, stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified, or they may mistake the year 2000 for the year 1900, and may not be able to function at all.