Australian organisations are poorly prepared for the impact of the Millennium problem and unaware of the business implications associated, says leading management consulting organisation, PA Consulting Group.
"The Millennium issue needs to be elevated beyond being just a technology issue as there is no business or government organisation immune from the problem," said a spokesman for the company. "Very few Australian organisations have considered the complex investment and risk management decisions associated with the Year 2000 software compliance.
"While many Australian organisations claim to have the Millennium problem under control, our experience and work indicates that almost two thirds haven't even thought of conducting an audit, the first phase in solving the Millennium problem.
"It is vital that senior people understand the importance of this matter. Only they can set priorities, allocate resources and ensure the job gets done in time."
PA cites its research from the UK which tracked the progress of 161 public and private sector organisations' response to the Millennium issue. Key findings were:
- only 9% of organisations had completed an audit to assess the extent of the problem (the first stage in solving the Millennium problem)
- only 28% of senior managers are fully aware of the problem.
Despite making slow progress in resolving the Millennium issue, the surveys indicated that UK organisations have started to recognise the scale of the problem. Specifically, respondents estimated that the average cost to fix the problem is now over £10m and 86% believed their systems would be affected before the year 2000, compared with just 62% in a previous survey.
Results from 34 face-to-face interviews reinforced the findings of the postal survey responses, highlighting some of the difficulties organisations are encountering when dealing with the issue, including:
- poor initial recognition of the size of the problem
- responsibility for the problem not being taken at board level
- a lack of business involvement
- inexperienced staff appointed to the role of Year 2000 project manager.
"The survey findings indicate that organisations appear to be glued into the audit phase and are struggling to break free from it. Some organisations have spent more than 12 months on this phase alone and are still not ready with an implementation plan."
"The inability of organisations to get to the implementation stage reflects the difficulty of planning a large scale programme with incomplete information. Solving the Millennium problem requires extensive programme and project management experience which many organisations just haven't got.
"While these findings are alarming - UK organisations are a long way ahead of their Australian counterparts."
According to PA, Australia's small-to-medium sized enterprises who depend on packaged applications, will be amongst the hardest hit by the 2000 Bomb.
"Ignorance is the chief enemy within this business sector. Currently there is a very poor understanding of the problem and its impact."
"These organisations may depend on one system to process their invoices, for example. If this system goes down and the cash stops coming in, then their bank may take a serious look at their line of credit.
"Some analysts are predicting that 3 per cent of Australian business will collapse as a result of the Millennium problem - I would say that the majority of these will be small-to-medium sized enterprises, unless they move now to address the problem."
