If you're like me, you're getting weary of stories about Year 2000 problems. In fact, I have provided several different perspectives on the issue, including Visa/MasterCard issuing concerns, fines for ISOs and banks who do not complete terminal upgrades by certain dates, and even ideas about how to check out your own PC. However, I must admit that the material I received this week from Year 2000 Compliance Institute and Microbanker in Lake George, New York, is scary. According to Microbanker, "The Year 2000 will cause over 10% of financial institutions to fail," because they will not be prepared to handle the new date in their software.
We hear about the problems of Year 2000 daily. Usually they involve errors in card readers, or mistakes in billing; problems which are inconvenient and costly. Therefore, companies are spending millions of dollars NOW hoping to prevent the costs later. According to Computer World Magazine, Fortune 500 companies will spend $50 to $100 million EACH on Year 2000 fixes.
Part of the reason for such high dollar figures is that many companies are "killing two birds with one stone," and using this opportunity to purchase new systems. Another reason for the high price tag is that problems aren't confined to "in house" systems. Many companies have computer-controlled elevators, telephone, and security systems. Many are operated by contractors, which means there has to be some coordination and communication, which raises the costs.
Additionally, it's not just the "big" systems that are at risk. The Year 2000 bugs trickle down to each individual PC and application. According to Rob Reeg, senior vice president for systems development at MasterCard, MasterCard is investigating how individual workers have modified their own programs and databases that may prove problematic.
Even though companies are preparing for 2000 in hopes that it will be a seamless transition for the public, this spending is not without risk to the public. In that vein, the SEC has issued an advisory stating that public companies should disclose their year 2000 spending if it will have an impact on the company's financial status, products, or competitiveness.
