The new century is less than four weeks away. As we stand on the verge of the Year 2000, the vast majority of American citizens are totally convinced the Y2K computer problem has been solved. At this point, if even mild economic or social disruptions occur in January, most folks will be absolutely shocked, having been assured so often that such disruptions are impossible.
The Y2K awareness battle is over. It wasn’t even close. Those of us who have attempted to educate consumers about this situation have been clobbered. If it had been a football game, the score would have been 63 to 7, with Coach Koskinen working his game plan to perfection.
Over the last several months, a relentless wave of spin control and outright disinformation from government bureaucrats and corporate executives have flooded the public with Y2K optimism. As a result, most people did not bother to research the issue and instead blindly accepted all the happy-faced PR pronouncements.
I truly hope and pray the Y2K optimists are correct. No one in their right mind would want to see our prosperous society shaken to its very foundations. But I’m afraid all the Y2K optimism is unfounded. Yes, much work has been done in the last few years. Many key technology systems have been upgraded or replaced and will operate properly in the Year 2000. Many others, however, are far from ready.
Contrary to popular opinion, the Y2K problem has yet to be solved. The following summaries indicate the true status of various sectors of our economy and society:
If you read only the headlines, you would think every computer system in every federal office is all set for the Year 2000. But in the most recent report from the U.S. House Subcommittee on Government Management, Information and Technology, issued on Nov. 22, it was revealed that of 43 federal programs designated “high impact,” 18 remain at risk of failure. The original compliance deadline for federal systems was Sept. 30, 1998. The deadline was moved to Dec. 31, 1998; then March 31, 1999; then Sept. 30, 1999. (Does anyone notice a pattern here?) Now, with mere weeks remaining until Jan. 1, many key systems are still not ready.
The Medicare program is also at risk. According to an October report, published by the American Medical Association, 98 percent of the nation’s doctors, hospitals, and other health care providers had yet to test their computerized data exchanges with Medicare claim-processing centers. Of the handful that had tested, the failure rate of supposedly compliant computer systems was as high as 20 percent. Medicare officials have made it clear that no payments will be made on improperly filed claims. Since the vast majority of claims are filed electronically, Y2K glitches could create cash-flow nightmares for doctors and hospitals dependent on Medicare funds.
In October it was revealed that the Internal Revenue Service had not even completed Y2K inventories of the computer systems in many of its centers and offices. The basic inventory is the first step in the time-consuming process of repairing systems. IRS Commissioner Charles Rossotti said they planned to complete Y2K inventories of major centers by Dec. 31, 1999. (Great, but when do they plan to actually fix the computers?)
Y2K-readiness at the state and local levels is much worse than at the federal level, according to most experts. The Center for Y2K and Society, based in Washington, D.C., released the results of a survey in November. Fifty-five communities in 28 states were polled, and as Executive Director Norman Dean explained, “It’s clear there is a great deal that remains to be done, and we’re running out of time.” The survey found that most communities across the country, regardless of size, are under-prepared for Y2K. Also, sewage treatment plants and local utilities have not been independently audited in most locales, and less than half of the surveyed communities have plans to assist nursing homes in the event of disruptions.
In October, a widely respected computer consultant, James McCullough, described the city of Atlanta’s Y2K situation: “In my professional opinion, Atlanta’s Year 2000 Program is being poorly managed, months behind schedule, and is not taking the necessary actions to improve the chances of any real success.” Upon learning of McCullough’s statement, City Councilwoman Cathy Woolard remarked, “I suspected all along that we were in this kind of shape, but have not been able to confirm it. It’s quite obvious that from the top down, nobody has a clue what they’re doing.”
In early November, it was discovered that 50 percent of the United States’ 911 emergency networks were not Y2K-compliant. White House Y2K czar John Koskinen suggested that people keep handy the direct dial phone numbers of local fire, police, and ambulance services in the event 911 emergency systems fail.
A Cap Gemini survey in September found that 44 percent of major corporations did not expect to have all of their mission-critical systems ready by Dec. 31. This statistic floored me when I first learned of it. However, the handful of media outlets that bothered to report the story in September also said most corporate executives are optimistic that Y2K will not interrupt business activity, and as a result, few in the general public took notice.
On Nov. 29, the results of the third “Y2K Experts Poll” was released. Gary Beach, the publisher of CIO magazine (and someone who testified with me before Congress), one of the sponsors of the poll, said, “One in five large companies is racing to finish by the end of December. Some are going to make it, some aren’t. Even those finishing will not have enough time to adequately test and verify their work.” Another survey sponsor, Dr. Ed Yardeni, said optimism about Y2K “is based more on hope and trust than fact.” The survey found that two-thirds of major corporations are assessing the Y2K status of their critical suppliers simply by sending out form letter questionnaires.
A recent survey by the Society for Human Resource Management (SHRM) found that only 35 percent of responding companies have made contingency plans if Y2K problems hit payroll programs. As a result, experts warn that some employees could find themselves without a paycheck when the Year 2000 arrives. “There are an awful lot of companies that haven’t done a whole lot, and it’s really going to affect them,” said John Trahey, vice president at Millennium Payroll Services. “People’s checks may not be there.” (I can think of nothing that will mess up a company quicker than a bunch of unpaid, disgruntled employees.)
Small businesses in the United States are even less prepared for Y2K than larger corporations, according to industry analysts. Reportedly, upwards of 40 percent of all small businesses are completely ignoring the Y2K issue and have no plans to take any action to upgrade non-compliant computer systems. Small businesses employ 60 percent of American workers, and virtually all major corporations rely on small firms for critical supplies and materials.
With less than 20 working days to go until New Year’s Day, this is the situation in the United States — the undisputed world leader in Y2K preparedness. Overseas, Y2K-readiness is much bleaker. The nations that provide half of our oil supply, such as Venezuela, Saudi Arabia, and Mexico, are struggling to upgrade technology systems in time. Major trading partners, like China and Indonesia, are already admitting that disruptions will be widespread. In an unprecedented move, American embassy personnel in Moscow are being allowed to come home before the end of the year because Russia is expected to be a technological basket case come January.
I’d love to say the Y2K optimism sweeping our land is justified — but I can’t. The plain facts about Y2K-readiness paint a much more somber picture. I’m afraid Y2K optimism is based mostly on wishful thinking. And I’m afraid millions of citizens will be shocked — shocked! — to discover early next year that politicians and business leaders have been lying to them about Y2K.