Y2K expert says security is the next big challenge

Retailers handle a majority of the dollars in the U.S. economy so their year 2000 efforts are a national concern.

Cathy Hotka, the vice president of IT for the National Retail Federation in Washington, spent much of this past week in the White House's Information Coordination Center, which is still on the lookout for problems relating to the Y2K computer bug.

She told Computerworld senior writer David Orenstein that after encountering only minor glitches, retailers can now harvest benefits such as closer relationships with other industries, enormous amounts of data about their systems and a better grasp of the linkage between IT and business. All that, she said, will be crucial to preventing the next potential IT crisis: security.

Q: Did things go as smoothly for retailers as they appeared to go globally?

A: Things actually seemed to go much smoother than we ever imagined in our wildest dreams. I think the operating assumption among most [retailers] was that we would have problems not only with small retailers but also with suppliers, particularly suppliers in smaller Third World countries. So far that has not been the case at all. Some of our members who have people on the ground in other countries report personally from there that it's just not a problem.

At this point we're not expecting anything on the leap day (Feb. 29, 2000) beyond what we've seen so far, which is nuisance glitches, which retailers are finding and fixing on the fly.

Q: An example of a nuisance glitch?

A: We're seeing reports spitting out with the wrong dates. Nothing that would affect the business.

Q: Retailers don't generally have lots of money to throw around to fix computers. Are CEOs asking why they had to spend so much when other nations did not and also sailed by?

A: I'm sure that those questions will be asked, but I think answering them is going to be relatively easy. It was a painstaking process to establish that the work needed to be done and then get the money. But we as a group embarked in the summer of 1997 on a joint retail industry mission to find out whether retailers as a group needed to spend this money. The results were horrifying.

We found out, for instance, that 100% of private label credit-card management systems were not going to make it. We found out that 99% of warehouse management systems were not going to make it. That made the process of getting the approval for the money and the personnel time much easier.

The reason we got through this so well is because (they) really did work hard and they worked early and they worked together. What has been just amazing to me is the amount of cooperation and enthusiastic input we've gotten from industries that are only peripherally connected to us. I was able to get on the phone, as were my colleagues, at any time with people who ran (year 2000 bug fix programs) for Chevron, or General Motors or Coca Cola. Everybody's helped everybody. One of the companies that checked in with me over the rollover weekend was Merck.

Q: Can you describe who is at the White House's Y2K war room?

A: It was a fairly eclectic crowd. At any given time (there were) 90 or 100 people in the analysis center. We had members of Congress, cabinet secretaries, representatives from all of the federal agencies, Red Cross, FEMA. There were, I believe, 12 from private industry -- the Edison Electric Institute, American Petroleum Institute, someone from telecom as well. We were able to provide analysis. We also had real live contacts in these industries and if we needed to get people on the phone we could.

Q: What do all those people think we have learned?

A: The consensus is that we need to make sure this does not happen again.

Clearly fixing it in a joint manner is uplifting and inspirational, but it does not address the key question of how we got here in the first place. The reason we had to do all this work and spend all this money is because there was probably not a sufficiently well-developed sense of the reliance of any business on IT. As we move our business online, as networks become more important, as trading partners talk to each other electronically as a matter of course, we need to make sure that information is protected. Our job going forward is to make sure those systems are secure. We're looking at hackers, we're looking at viruses and (to) identity theft.

Q: The White House's war room is still running. What is still expected?

A: I took more reports on Tuesday the 4th than I had taken on rollover weekend because the errors people were finding were in batch processing. We're still finding little things that are going wrong. They are being entered in a giant database so we can look for patterns. That will remain up and that center will remain live certainly through leap day when we will all go back there again at full strength. Part of the reason that we are there is not just to track these things but also to put to rest rumors.

Q: What can retailers do with all the data about systems they compiled?

A: We found as other industries did -- particularly unregulated industries -- a tremendous duplication of effort and expense in systems. We found that users had mission-critical data living on Paradox 1.0 for DOS. One of our expectations is that retailers will take this inventory, maintain it and be able then to create a much better, higher-level view of how technology is used.

We think they will be able to save money in the long run. One of the things we found was that business units which had previously been in charge of their own technology acknowledged during the Y2K work that it really needed to be done by central IT.

Q: Did retailers benefit materially from people stocking up on survival supplies like water?

A: Demand for water was regional. We saw it in certain cities but not in most.

On the whole, while there was certainly a little increased demand for batteries, demand was very low. I have heard that some retailers are telling people they can bring it all back as a way to enhance customer loyalty.

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