Bug beleaguered bank bites back spending

A $200 million millennium compliance bill is giving one of Australia's largest banks some severe headaches. And the biggest is the fact the project is not going to be finished by January 1, 2000.

Speaking at a millennium conference last week, ANZ Bank group 2000 implementation director Linda Dewar also conceded:

* the announcement of redundancies of 1700 staff nationwide "will compound the problem of measuring all millennium compliance plans";* the millennium compliance work has diverted the bank's focus from projects such as the nationwide rollout of a Mondex electronic cash system;* the millennium compliance project is back on track after the team went "off the plan" in September last year;* millennium compliance work is not expected to be complete until well after January 1, 2000; * staff members are allegedly attempting to pass off non-millennium projects as millennium compliance work and;* the bank does not trust vendors and runs its own tests on products to ascertain compliance.

"In September 1997 we were off the plan but we are now back on track with only one project being about four weeks late," Dewar said.

"There is no time for niceties, toes are trodden on and it's hard for people to accept that we cannot focus on new projects like Mondex.

"People try to pass through work under the Y2K banner so they can get money for their project but the number one priority is Y2K.

"We have had to stop all new projects.

"If people do bring in new systems they must prove the system is Y2K compliant before it goes into production.

"We don't actually trust anyone -- if they tell us it is compliant then we test it, we test everything."

The bank operates in 43 countries with 13,000 products, while in Australia and New Zealand alone, there are 1000 branches. Two separate teams are tackling the project -- one in-house and the other external, but headed by an ANZ executive.

Both Dewar and BP Australia's millennium project manager, Chris Howarth, another key speaker at the conference, emphasised that the issue was a business problem first and foremost.

Dewar said she reported to a non-IT director and IT is just one of many streams of the project.

"There are 434 IT projects worldwide with a process in place to measure Y2K for each project.

"It is a big logistical problem and the announcement that the bank will make 1700 people redundant will compound the problem of measuring all Y2K plans globally even more difficult," Dewar said.

Speaking about BP Australia's $200 million millennium project, Howarth said: "I honestly believe every company is in denial -- you have to keep raising the issue."

Howarth's mission is to ensure business continuity for BP regardless with 70 per cent of effort spent on non-IT and the remainder on IT.

BP has taken a triage view of the Y2K issue, with the main objective to maximise the number of surviving systems.

The three points are: identify those systems that will survive, identify those systems that will survive with treatment and identify those that will die.

"Fortunately BP had done a lot of rationalisation of systems -- unrelated to Y2K -- in 1993 so will not have too many systems to retire. Triage is critical. Time is running out, fixes are more expensive every day, resources are more and more scarce and the learning curve is daunting.

"Corporate willpower is another factor. It is difficult to get their attention long term and it is as much work to keep business's attention as fixing the problem."

BP is working towards business continuity and not compliance. "We know that we will not be able to make all systems compliant and we will not be able to test everything, especially non-IT systems such as embedded systems which are even harder to test."

Dewar and Howarth indicated the problem is so extensive that there is no way their organisations will find all the Y2K problems by the year 2000 and it will not be "business as usual" until well beyond the start of the millennium.

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