Less Than Half of Major Firms Expect Full Year 2000 Compliance by Year's End

Fewer than half - 48 percent - of the largest U.S. companies anticipate all of their critical systems to be Year 2000 compliant, according to a recent survey conducted by Cap Gemini America, a leading information technology and management consulting firm. Eighteen percent - one in five companies - report that 75 percent or less of their critical systems will be completely tested and compliant by December 31, 1999. Thirty-six percent expect between 76 and 99 percent to be ready for Year 2000.

These predictions are not surprising when 75 percent of respondents reported Year 2000-related failures - up from 72 percent last quarter. That number was 55 percent in December 1998. The most frequent failures cited were financial miscalculation or loss - 92 percent; processing disruptions - 84 percent; customer service problems; logistics/supply chain problems - 34 percent. Nearly every respondent - 99 percent - expects an increase in systems failures into the remainder of 1999 and beyond.

Firms are also looking for outside verification for their in-house solutions. With the year 2000 fast approaching, IT executives want to make sure that what they've implemented will do the job.

The survey also reports that a shift in Y2K responsibility is taking place. Top management views the challenge as a business issue and not merely a technology problem. According to the report, 84 percent of top managers plan to take charge of Year 2000 "crisis management centers" - an increase of 35 percent - up from 62 percent in May. Also up from last quarter was the number of respondents dedicated to developing these centers. Ninety-six percent say they will establish centers that deal exclusively with the Y2K date change and related problems - that number is up from 85 percent last quarter.

The survey is one of the longest running corporate polls and has systematically monitored Year 2000 preparedness on a quarterly basis. Respondents include information technology managers and directors of 144 major U.S. corporations across all major industrial sectors and 17 federal, state, and local government agencies.

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