Y2 k training circa 1998

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Chaim Yudkowsky, CPA, CITP, CGMA - Byte of Success

Y2K based training focused on the challenges of the time for small and midsized business preparedness technologically. Also, interesting historically based on what actually happened. Delivered in many settings over about 18 months.

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Y2 k training circa 1998

  1. 1. Year 2000Year 2000 Only 654 Days LeftOnly 654 Days Left presented bypresented by Chaim Yudkowsky, CPAChaim Yudkowsky, CPA Grabush, Newman & Co., P.A.Grabush, Newman & Co., P.A. 410-296-6300 www.gnco.com www.byteofadvice.com
  2. 2. The calendarThe calendar December 31, 1999 - Friday January 1, 2000 - Saturday January 2, 2000 - Sunday January 3, 2000 - Monday
  3. 3. Experiences -Experiences - Real lifeReal life 10,000 medical bills (1972) Invitation to school (1988) Swedish food wholesaler Golf Yours?
  4. 4. Experiences -Experiences - ExpectedExpected “BGE has conceded that it can not solve all its Year 2000 problems before the end of 1999.” Airline industry - many will not fly the evening of December 31, 1999 Banks want to shut down on Friday
  5. 5. Experiences -Experiences - PotentialPotential Power grids Air traffic control systems Other embedded systems Payroll systems Financial accounting systems Social security Mortgage amortization Stock trades Bank vault Elevators ATMs EDI
  6. 6. CostCost According to some studies, the cost could run $300 to $600 billion worldwide by the end of 1999 and solve less than 50% of all problems!
  7. 7. The challengesThe challenges Problem: 00 instead of 0000 – What does it mean? – How to enter it? Leap Year thing
  8. 8. What is at risk?What is at risk? Hardware and the microchip (embedded systems) – April 1996! Software – Quicken Networking – Network operating systems
  9. 9. The myths - Part IThe myths - Part I A silver bullet exists It’s just a mainframe problem It’s just a software application problem It’s just a COBOL problem If your application is compliant - no need to worry A fixed system will not have problems No need to worry about customers and suppliers
  10. 10. The myths - Part IIThe myths - Part II No one outside cares No need to discuss this issue with an attorney It’s not your responsibility - it’s your business advisor’s There’s plenty of time January 1, 2000 (or 3) will be an ordinary day The problem will not begin until 1/1/00
  11. 11. SolutionsSolutions Solutions . . . – Software – Hardware University of Maryland - Year 2000 Fellowship
  12. 12. What you must doWhat you must do Plan and analyze your risk Test all your systems - Do they work? Upgrade off-the-shelf where appropriate Replace where appropriate Hire programmers where appropriate Consistently evaluate progress Mitigate your risk relating to suppliers and service providers Consider business interruption insurance Exclusions in policies effective April 1
  13. 13. What is going on? - DisclosureWhat is going on? - Disclosure AICPA recommendations for disclosure Year 2000 and Congress for public companies SEC requirements for disclosure for public companies Banks
  14. 14. What is going on? - OtherWhat is going on? - Other Being forced by the consultant - liability insurance underwriting Raising the cost of good programmers Not enough people Whole industry of topical magazines and Web sites Mutual fund that invests primarily in Y2K companies Year 2000 warranties Accounting for costs in fixing the problem - expensed International fixes - E.U. and Third World concerns
  15. 15. JokeJoke After January 1, 2000, what will all the Y2K experts be doing?
  16. 16. Basis for litigationBasis for litigation Business interruption Software licensing disputes Negligence Lloyd’s of London estimates a $1 trillion litigation potential!
  17. 17. LitigationLitigation Who gets sued? Produce Palace International v. TecAmerica Corp. (POS) - product defect – VISA determined that 99.7% of 14 million merchants were compliant Atlaz International v. SBT (accounting sw) - breach of warranty
  18. 18. Year 2000 statistics -Year 2000 statistics - OverallOverall Loss of economic output (1998-2001): $119 billion Cost of repair in the U.S.: $500 billion Cost per line of code in the U.S.: $2.57 U.S. economic growth rate decrease in 1999: 0.3% Number of person years to fix and test: 700,000 Number of PCs unable to handle: 80% Number of vacancies for computer scientists and programmers: 350,000
  19. 19. Year 2000 statistics -Year 2000 statistics - Government & Corp.Government & Corp. Cost to fix the IRS’ problem: $1 billion Number of lines of code in IRS’ systems: 60 million Earliest year for readiness by the Dept. of Defense’s critical systems: 2012 Of America’s largest companies: – <33% considered impact – 20% done anything – 7% have problems now
  20. 20. Top 10 reasons to do nothingTop 10 reasons to do nothing You’re planning to retire next year. You want to surprise the stockholders. January 1, 2000 falls on a Saturday - you’ll have lots of time over the weekend. Government will pass legislation to roll back the clock to 1900. You don’t have a budget. You believe in the Tooth Fairy. Bill Gates will solve it. Nostradamus never mentioned this problem. Your multimillion-dollar company doesn’t rely on computers. You’re already in Chapter 11.
  21. 21. Questions?Questions?

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