It has become fashionable to lament and portend the end of the world as we know it under the guise of the so-called "Year 2000" (Y2K) problem or "Millennium Bug." Almost every day, major news outlets, including television and print media, are carrying a wide-range of Y2K- related stories, from the scope and extent of the government's response (or absence thereof) to the possibility of a global recession. Given the ever-increasing public awareness of the potential problems associated with the Millennium Bug, no company, large or small, can ignore the situation and not expect serious repercussions as the clocks roll towards 2000.
In a nutshell, the Y2K problem arises from the inability of older computers, electronic systems and software to recognize the Year 2000 and operate as intended in the next millennium, resulting in the corruption or irretrievable loss of data and the shutdown of mission critical systems. The Y2K bug also involves the "Year 1999" problem (the use of the code "999999" to signify the end of a project resulting in computers shutting down when the date "September 9, 1999" is entered) and the "Leap Year" problem (the inability of computer programs to adjust for leap year calculations). Most computers were programmed to recognize only two-digit, rather than four-digit, date fields. For example, a typical computer would correctly interpret the date 9/1/98 to mean September 1, 1998. The same non-Y2K compliant computer would misinterpret the date 1/1/00 to mean January 1, 1900, rather than January 1, 2000, as was intended. Other numeric field recognition problems may arise in the future, including those involving systems which are controlled and/or monitored by embedded chips which may not be replaceable or upgradable. The resulting computer errors may cause major, and very costly, problems for the user and third parties alike.
If you are like most Americans, you now know at least something about the Y2K issue. In the past year, awareness of the problem has increased exponentially. According to a survey conducted by Cap Gemini America, eighty-six percent of companies surveyed currently have detailed Y2K remediation plans in place, up from only thirty-three percent in December 1997. Some sectors of the economy report that they are close to becoming Y2K ready, while others are continuing to experience problems. In recent weeks, a Senate committee has renewed attacks on the health-care industry for its lack of progress on remediating the Millennium Bug. At the same time, twenty-eight of the largest Wall Street securities firms and several exchanges recently concluded tests of the firms' abilities to execute trades both before and after January 1, 2000. One percent of the trades failed because of Y2K-related problems.
At the same time, over twenty Y2K-related lawsuits already have been filed. Additional suits are likely. Most of the recent litigation has been brought by classes of software purchasers who anticipate that their programs will fail to operate properly after the Year 2000. These plaintiffs, some of whom purchased the subject software as recently as two years ago, are seeking free program upgrades. The anticipated expense associated with such Y2K "fixes" and "upgrades" likely will be the tip of the iceberg. Some experts have predicted that, at the end of the day, Y2K-related litigation costs and remediation may top one trillion dollars.
The federal government's response to the Y2K problem has been mixed. Some agencies are aggressively attacking the problem, while others are taking a more laissez faire approach. For example, the SEC has issued guidelines urging public companies to disclose details about their Year 2000 plans, such as their state of readiness for the Year 2000, their Year 2000 related costs, and their contingency plans for failures. In turn, the Federal Aviation Administration must still correct, test and implement many of its mission critical systems. Government officials doubt that these tasks can be completed in the time remaining. Still, the United States is much farther along than the rest of the world. Indeed, many foreign governments have done little to solve their anticipated Y2K problems. Russia, for example, has yet to take a serious look at the Y2K issue. Regrettably, it is not alone in its indifference.
The good news is that the problem is fixable. There are a large number of consulting firms ready to handle the challenges of ensuring that your company's systems are Y2K compliant. The bad news is that the problem, while technically simple, is extremely time consuming and Y2K consultants are getting busier every week as we move towards the Millennium. Additionally, there is no way to ensure that the people you do business with will solve their Y2K problems.