More Y2K Deadlines Missed - corporate America - Industry Trend or Event

While almost all major U.S. corporations are well along in battling their date-change problems, many are running into the sand.

Specifically, growing numbers of big businesses are underestimating costs, falling behind schedule, and experiencing Year 2000-related breakdowns.

"Corporate America is finally dealing head-on with the Year 2000 challenge," says Jim Woodward, senior vice president of Cap Gemini America, the firm whose long-running survey tracks U.S. millennium readiness. "But while major firms are taking the job seriously, they're running into difficulties and delays."

The portion of companies focusing on contingency planning surged to 72% in July from only in April -- a clear telltale that there are many unexpected problems. Almost 85% have changed their overall approach since starting their Y2K initiatives.

At the same time, more businesses are reporting to Cap Gemini that they'll be spending more than they first thought to fix the problem. Well over two-thirds say they can't assess whether they'll be able to stick to 1999 spending projections.

Similarly, remediation and test schedules are slipping, and Y2K-related failures are soaring. Nearly 90% of those reporting such failures cite processing disruptions; 44% describe logistics/supply-chain problems; and 38% check off customer service hassles.

The tracking survey used, for the first time, a series of "success evaluation" questions designed to predict each economic sector's risk of Y2K project failure. The poll found that utilities, transportation, and health companies were at the greatest risk, and software, financial services, and computer sectors were best positioned for success.

                          Year 2000 Failures Soar
           % of companies experiencing Year 2000-related failures
December 97  7%
April 98    37%
July 98     40%
                        Y2K Disrupts Business
             % of respondents experiencing Y2K-related failures
Customer service problems           38%
Logistics/supply-chain problems     44%
Financial miscalculations or losses 62%
Processing disruptions              87%

COPYRIGHT 1998 Wiesner Publications, Inc.
COPYRIGHT 2000 Gale Group