SAN DIEGO -- The Y2K problem is clearly no longer just an IT spending issue, according to research released yesterday by the Gartner Group.
IT departments spent up to 30% of their budgets on Y2K compliance this past year and could see that this number would grow to 40% this year. Meanwhile, non-IT departments spent about as much on Y2K compliance last year as their more technical counterparts did.
Non-IT spending includes such things as risk assessment and management as well as contingency planning and implementation, according to Lou Marcoccio, Gartner's top Y2K researcher. In fact, he said that ownership of Y2K compliance projects shifted from IT to business management in more than a third of large companies, up from just 5% of them in 1997.
By year-end, Marcoccio expects non-IT spending to be at least double what IT spends on Y2K compliance.
Marcoccio made his remarks at Gartner Group's Spring Symposium/ITxpo 99 here.
Overall, U.S. companies are doing well in terms of upgrading their computer systems to be ready for next year, Marcoccio says. The U.S. government, in particular, has made much progress in the past year. The pharmaceutical and discrete manufacturing industries have also made great strides.
As for compliance levels among enterprise network products, Marcoccio provided few specifics. However, he did say that Microsoft's constant Windows NT 4.0 Y2K compliance updates (the company is on its fifth) could be a drag on customers' time and resources. Marcoccio described the process of installing a patch across thousands of buildings as "not trivial."
Marcoccio expects that the wire-line telephony infrastructure will not be affected negatively by Y2K compliance issues, but that wireless companies using microwave technology could suffer some outages. The Internet should be unfazed, though users may run into difficulties accessing specific sites using non-compliant servers and software, he says. Small companies' Web sites will be the most likely problems.
Other key findings include the following:
- The gap between Y2K compliance leaders and laggards has widened over the past two quarters.
- Y2K-related litigation is on the rise. Whereas only three suits were actually filed as of January 1998, about 80 were filed by the end of this past year (Marcoccio counts those suits that get past the pre-filing stage - hundreds of cases made it to that stage last year). Most of the cases involve software customers accusing vendors of not coming through with compliant software or of trying to charge extra even for customers with maintenance agreements.
- Of software vendors who claim their products are compliant, 6% of the upgrades are proving to be non-compliant. Marcoccio says that after initially doing the work to make their products work next year, many vendors "have taken their eye off the ball."
The idea that the biggest Y2K hit will take place on Jan. 1, 2000 is "totally incorrect," Marcoccio says. He expects this July will be the first big trouble spot, particularly among companies that use six-month plan forecasting software and whose fiscal years begin in July. October could also be a troublesome time for companies that use three-month forecasting software and whose fiscal years start in the fall. "Most companies are not planning for those dates, they're planning for one date [Jan. 1, 2000]."
