Companies ready to adopt Plan B for year 2000 problem

Reality is bearing down hard on companies that had planned to replace rather than fix software applications before 2000.

They are already out of time. As a result, Plan B is in effect at companies such as $US14 billion AlliedSignal.

The New Jersey, US-based manufacturer this year will redirect the lion's share of its information systems budget to fixing legacy systems while it slows down spending on an ongoing $US50 million-plus SAP AG R/3 project, ComputerWorld has learnt.

"It's too late to fix the entire company with SAP," said Robert Scott, vice-president of AlliedSignal's SAP Centre of Excellence. There simply isn't enough time between now and the end of 1999 to implement the software, much less analyse and possibly revise thousands of processes across the company's automotive, aerospace and materials businesses.

Instead, AlliedSignal will spend millions fixing systems it knows it will scrap once the bulk of its R/3 project is completed sometime after 2002.

"The number of systems we'll fix for 2000 and then throw away is probably 6 or 7 per cent of the whole portfolio," Scott said.

"There were somewhat draconian budget cuts in the IS outlook. The cuts that have been made are related to slowing down ERP [enterprise resource planning]," another AlliedSignal IS executive said. "It's a relief to me not to have to push forward on ERP until after 2000 is behind us."

AlliedSignal isn't alone. Some companies that embarked on package replacement strategies as early as 1995 "aren't going to make it", said Stephanie Moore, an analyst at Giga Information Group.

Meta Group estimates that up to two-thirds of its clients had planned to replace rather than fix their software for 2000.

But now that they are facing an immovable deadline that is 23 months away, more of those companies are scaling back those packaged software projects to instead fix legacy systems.

One reason for the back-tracking is the time it is taking many companies to implement enterprise systems.

Companies must often restructure whole business processes, frequently in the face of user opposition, to work with the software.

"This is definitely a back-pedalling kind of thing," said Dan Sholler, an analyst at Meta Group. "No-one is jumping up and down about the fact that they have to do this stuff, because part of the project is throwaway work.

"They know they're fixing systems that will get thrown away six months after they're fixed."

Some companies are taking a "belt and suspenders" approach, pursuing Plans A and B.

Any company that tries to replace legacy systems with enterprise software "had better try to replace them with a vanilla system, no modifications", said Peter de Jager, a year 2000 consultant. He said SAP has had many successes with smaller companies that have used its Accelerated SAP implementation program to install three or four R/3 modules in as little as four months.

AlliedSignal announced in April that it had taken five months to implement a single R/3 module across five of its automotive units in Europe.

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