Although many companies have moved beyond awareness of the Millennium bug to contingency planning, not many business owners are aware of what the correction process entails and more importantly how to budget for it.
Where will money need to be spent? Mark Cooper, Executive Director of Abraxas Technologies (Pty) Ltd responsible for the Cape Town based Year 2000 Factory, notes that there are four fields of millennium de-bugging activity that need to be funded. The first of these is the software used by the company and the second is the organisation's equipment. This could range from hardware and office equipment to factory machinery and plant automated processes according to whatever industry the client is in. Thirdly, says Cooper, you have to consider the supply chain. "It is impossible to be Year 2000 (Y2K) compliant in isolation. What is the status of the other companies you depend upon, whether it is for basics such as electricity and water, or whether they are your suppliers?" Finally, and most importantly, you will have to budget for a Y2K Management Team who will be responsible for co-ordinating, guiding and monitoring the various stages through which the entire process must pass.
What are these stages? To manage the problem, according to Abraxas's Year 2000 Management Consultant Gavin Douglas-Hamilton, the project will have to pass through five significant phases: Discovery, Planning, Rectification, Testing and Implementation.
During the first phase, Discovery, companies need to identify both what software they are using and what other systems could be affected. For software that has been externally sourced, Douglas-Hamilton recommends that business owners find out from their software suppliers what the status of their products are. For internally written software, a detailed analysis of code errors will need to take place.
"Once the extent of the potential problem has been identified, companies can move to the planning stage" says Douglas-Hamilton. This results in a high level of understanding of the extent of the problem, the potential costs and a macro plan for resolving the company's Y2K problem. It is only at the end of this stage that an accurate budget can be prepared for the final three stages. However, getting to this point will already have consumed 25% of your entire Millennium budget.
Stage three, Rectification, should involve two parallel correction processes. One would be the upgrading of supplier software and the other would involve the correction of an organisation's own internal systems. A further 25% of your Y2K budget will be earmarked for these processes.
Once phase three is complete, the critical processes of Testing and Implementation occur. Desray Clark, Gauteng-based Year 2000 consultant for Abraxas, notes that, contrary to most people's assumptions, the last two phases are the most time consuming and therefore the most costly item in the Y2K budget. As much as 50% of monies should be allocated to testing and implementation.
So what does it all add up to? Jay Naidoo has acknowledged that South African business will be spending R20 billion on Year 2000 (compared to R400 billion in the UK, making it, in the words of The Economist, the most expensive problem in history). Putting this local figure into context, a financial institution such as First National Bank has spent R115 million to date on their Y2K rectification.
Is it possible to reduce costs? Yes, according to Douglas-Hamilton. One of the most effective ways to lower costs is to analyse and correct existing systems using an established automation process. This introduces consistency, accuracy, repeatability and speed. It has also the advantage of reducing testing requirements and thus shortening turnaround and reducing risk.
SA's only specialist Y2K Factory is that belonging to Abraxas in Cape Town. A highly automated facility, it harnesses advanced in-house software tools and methodologies to scan high volumes of program code for fields that do not cater for the Year 2000. Says Cooper: "Our Cape Town factory refurbishes programs at high speed, delivering not only rectified, syntactically correct code to the client, but also comprehensive reports of all changes made."
Blue Chip companies from all industry sectors use the Abraxas Factory. These include First National Bank, Nasionale Pers, Cape Town City Council, Transnet, Gold Fields of South Africa and Old Mutual South Africa. Two American companies, Experian and Pittsburg Plate Glass, the largest plate glass manufacturer in the United States, have also sent their code to the Abraxas Factory for rectification.
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