Academic journal article ABA Banking Journal

It's Later Than You Think

Academic journal article ABA Banking Journal

It's Later Than You Think

Article excerpt

December 31, 1999. A once-in-a-millennium New Year's Eve to remember. I expect to enjoy it, secure in the knowledge that the sun will rise the next morning (the sun always rises in Hawaii) and that--well before that night--my bank will have solved the "Year 2000 problem." If we haven't, it won't be for lack of advance planning and effort.

Are you worried? You'd better be, because the "Year 2000 problem" is a massive one for anybody who processes data. One consultant has been quoted as saying that, compared with the potential worldwide predicament associated with computers and the Year 2000, death and taxes will look like discretionary items.

The problem--in a nutshell--is this: many computer programs use two digits to represent the year (1997 = 97). When that shorthand becomes "00," will your computers know what year it is? Or will they assume it's now 19007

December 31, 1999 is a non-negotiable date. On some fronts, you don't even have that long. Soon, you'll be issuing credit cards with the Year 2000 expiration dates.

As of late last year, national surveys showed less than half of all companies had initiatives under way to deal with Year 2000; a surprising number haven't even begun planning.

I'd like to offer some thoughts, based on our bank's approach:

1. It's a survival issue, not a "computer problem." Many executives dismiss Year 2000 as "a computer problem." We may pooh-pooh computer problems that are hyped in the media because they often don't turn out to be nearly as bad as billed. (Remember the Michelangelo virus?)

Think again. This is not just a computer problem. It's a business survival issue to be addressed company-wide. Besides computers, Year 2000 can effect heating and air-conditioning systems, vaults, security systems--anything with computerized time code in it. These peripheral systems may appear to be minor inconveniences...until you get stuck in an elevator that won't work.

2. Your problem doesn't exist in a vacuum. Your bank's systems interact every day with those belonging to customers, vendors and suppliers. Are they, too, already at work solving the problem? Do you know where they stand? Don't assume they have it under control. If you fix your end, but they don't fix theirs, you have a joint mess.

Consider, for example, a simple retail credit card transaction. Year 2000 problems may affect the card itself, your bank, another bank, the merchant's terminal, the merchant's cash register, the phone company, the bank card association. …

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