IT strategy – Get priorities right on millennium

Tony Blair’s setting out of government strategy for the millennium crisis last month focused attention once more on the dangers of systems and software that fail to cope with the 2000 date change. But the event did even more to highlight the fact that most campaigners and observers are focusing on the wrong aspects of the problem – the melodramatic and the political, rather than the real life world of corporate applications – and in particular, work that is not getting done because of the Year 2000 panic.

The stories that hit the headlines concern the politics of the matter – government seeks approval by taking action on the millennium, opposition says it’s too little too late, the various taskforces and lobby groups all fall out.

The fact is, all the backlog of IT work that was waiting to be done when companies started to panic about the millennium – roughly two years ago – is still in place. And has got worse, as more and more resources have been diverted to the Year 2000 bug. With less than two years left to D-Day, the messages have got to change – prioritise will be the key, rather than trying to do everything. Of course, all companies wish they had prepared for the millennium years before, but if they haven’t by now, the best they can do is decide what is absolutely essential. And in that list of priorities should be included non-Year 2000 work, which may be equally vital to the business. An overall view of the IT tasks at hand is needed, rather than a blinkered obsession with the millennium.

Management consultancies and specialised IT consultancies have done little to encourage this sense of perspective yet. Naturally, millennium work presents a massive opportunity to generate revenue and gain new customers – and to gain publicity by publishing their own horror story warnings and predictions.

But consultancies themselves, in some cases, are finding themselves overstretched.

“Consultancies have the same difficulties hiring qualified IT professionals as any company doing its own Year 2000 work,” said a partner in one IT-specialised outfit. “Some have taken work on that they cannot fulfil, or not without diverting resources from other projects or business areas.”

This has become obvious in some of the software houses, which are now trying to charge customers for Year 2000 upgrades to their packages, which previously would have come under the heading of general maintenance.

Several lawsuits are already ongoing in the US to battle over this particular issue.

It is less clear cut for consultancies, but some companies are threatening to take legal action if they find that systems built by, or even recommended by, consultants prove not to survive New Year’s Eve in 1999. And others are complaining that typical fees for millennium-related work are rising steeply as skills and time become scarcer.

The consultancies that retain their good name, the trust of their clients – and a sound business base after 1 January 2000 dawns – will be those that are realistic in the expectations they raise with clients, that only take on work they can complete and that advise customers sensibly on where their IT priorities should lie.

And this means incorporating non-millennium related applications work in the mix, not just for the sake of the customer’s evolving IT infrastructure but also to ensure the consultancy’s IT eggs are not all in one, shortlived basket.

There are massive backlogs of IT work to be done in the core, bread and butter areas of computing – the business and finance applications that keep the company ticking over and performing its core functions (and that’s without considering the additional burden of converting for the Euro and dealing simultaneously in sterling and the European currency).

Despite the massive concentration on Year 2000, in fact companies remain focused on the more mundane issues. Top priorities for large companies, according to new figures from researchers at IDC, are investing in financial applications, improving data access and management and updating customer support systems.

These take precedence in terms of company priorities over new, fashionable technologies such as Internet commerce, as corporations look to create a solid back office.

They also take priority, strategically, over millennium work. But still, resources are being diverted from the applications to the more time critical Year 2000 issues – presenting the danger that companies will face an almost insurmountable backlog of work by 2000.

The importance of basic applications is borne out by the IDC figures.

Accountancy software is the largest IT investment area for one-fifth of large companies, followed by inventory and materials management, and then manager and end user data access, including customer support. More than 55 per cent of the largest projects, in financial terms, concern packages rather than maintenance work such as Year 2000 conversion or bespoke development. This is good news for software houses, less good for consultancies – and the move to buy packages has been accelerated by the millennium, since some companies, especially at this late stage, believe it will be more effective to replace their software than try to update it.

All this is not to downplay the millennium bug’s importance, and clearly there are applications where failure to fix it would be disastrous on a business and even a human level. But this is the time for companies, and the consultancies that advise and help them, to be ruthlessly realistic.

Government plans to raise awareness are missing the point now – people are panicked about the bug, and now need sensible advice on what they must fix over the next 21 months, and what could be delayed, glossed over or easily replaced. And just as importantly, they need to assess what other projects are urgent and how the business will suffer if they are allowed to be sacrificed or delayed by a single-minded focus on just one issue – one that will end, except for the lawsuits, in less than two years’ time.

Caroline Gabriel is a group editor in VNU’s IT portfolio.

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