Companies Encounter Unexpected Y2K Problems

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July 21, 1998 (8:40 AM EDT)

While America's large businesses are facing the year 2000 problem head-on, according to the most recent results of an ongoing Cap Gemini survey released Monday, many are running into unexpected difficulties and delays. And many are turning to short-term contingency-planning to deal with those difficulties, says the survey of IT managers at 128 of the nation's largest businesses.

Eighty-six percent of the companies surveyed have launched a "full-fledged strategy" to deal with year 2000 issues, up from 20 percent last December. However, the number of companies focusing on contingency-planning rose to 72 percent from only 3 percent in April, reflecting unexpected problems encountered in year 2000 work, according to Cap Gemini.

The incidence of year 2000-related failures increased from 7 percent in December, to 37 percent in April, to 40 percent this month. Types of failures included processing disruptions (87 percent), financial miscalculation or loss (62 percent), logistics or supply-chain problems (44 percent), and customer service problems (38 percent).

The percentage of companies that underestimated year 2000 costs increased from 82 percent to 87 percent since December, and only 2 percent described their cost estimates as "on target." And more companies are falling behind schedule. The percentage expecting to have more than half their systems compliant by the end of this year declined from 85 percent in April to 81 percent. The percentage of companies missing year 2000 "milestones" rose from 78 percent to 84 percent over the same period.

The Cap Gemini year 2000 poll of IT directors and managers in 12 business sectors has been conducted since March 1995. The poll is conducted for Cap Gemini America by Rubin Systems.