Y2K glitches on the rise

On the surface, the figures are startling -- 72 per cent of 152 large companies have already experienced some sort of Y2K-related glitch, according to newly released results in an ongoing survey by Cap Gemini America and Rubin Systems.

To date, most of the problems have been minor, with a negligible impact on the bottom line, observers said.

"We've had a couple of minor Y2K glitches with minimal impact," said Jerry Miller, CIO at Sears and Roebuck. The retailer ran into a snag a few months ago when one of its partners entered Y2K-sensitive software code into an electronic data interchange system they both use. The result: Sears was unable to schedule orders with the manufacturer for a few days, Miller said.

Y2K observers wonder how many big problems companies are covering up to avoid shaking shareholder confidence.

"If companies are hiding these problems, they're being covered up very, very well," said Kazim Isfahani, an analyst at Giga Information Group.

For example, one major pharmaceutical company destroyed at least $US500,000 worth of drugs after the expiration dates on the packaging were misprinted and mistaken for having been past due, said Capers Jones, chief scientist at Artemis Management Systems.

The study also found that 8 per cent of the 152 companies and 14 government agencies surveyed have severed business relationships with a supplier, partner or customer.

Prudential Insurance Company of America, widely said to be a year 2000 front runner, had replaced several of its suppliers by this time last year because of concerns about their Y2K readiness, said Irene Dec, year 2000 program director for the insurer.

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