Y2K measures 'built on sand'

Seasoned technology-watchers are still reeling from the sight of UKics say if this is the best offer, we’re in trouble. John Stokdyk reports. prime minister standing up in public and talking coherently about the computer millennium problem.

But as the publicity dust storm subsides from Tony Blair’s millennium bug speech last week, consultants and business advisers started to question whether the government’s #97m war chest would translate into practical measures that would avert chaos in January 2000.

Accountants are still waiting to hear, for example, how #30m worth of bug-busting training will be delivered.

Robin Guenier, one of the most persistent critics of government and corporate inaction, described the prime minister’s speech as ‘an astonishing step forward’ and an eloquent presentation of the issues Guenier has been railing about for the past two years. But behind the rhetoric, the government’s #97m edifice is ‘built on sand,’ suggested Guenier.

The government has established a unit in the Cabinet office to tackle public-sector compliance and increased the Action 2000 pressure group’s budget to #17m. In addition, it will donate #10m to a World Bank fund to help developing countries with the bug.

The amount put aside to help UK businesses with IT training amounts to #70m, from funds made available in chancellor Gordon Brown’s Budget last month. Some #40m will be used to set up technology training centres.

The other #30m will be made available in the form of small business grants, averaging #1,300, to help companies train their own ‘bug busters’.

Though reluctant to criticise the latest government initiative, Guenier concluded, ‘When it comes down to detail, it’s pretty trivial – the equivalent of ten days’ training. It’s as if the government were facing a major military assault from aircraft, tanks and missiles, and lined up 20,000 infantry with Enfield rifles to shoot back.’

In recent months the accounting profession has moved into the spotlight as an influential group ideally placed to lead businesses towards millennium-compliance – both within companies and from without, as auditors and business advisers.

According to the Department of Trade and Industry, the 89 local Business Links agencies will play a key role by helping firms that ask for help with their computers.

Training and Employment Councils are likely to be the vehicle through which the training funds are dispersed, but the Department for Education and Employment was still finalising details as Accountancy Age went to press. The network of Business Links and TECs around the country is a patchwork. In some regions they are one and the same, and in others they run independently.

The quality and capacity of the Business Links agencies varies nationally and is currently being examined by the DTI, with help from a joint working party with the English ICA and ACCA.

Teresa Graham, a partner with Baker Tilly and a director of Business Links London South, explains Business Links personal business advisors (PBAs) currently use a testing kit developed by the National Computing Centre to check whether a company’s systems are ready for 2000. If the test diagnoses any problems, the client is then referred to specialist advisers.

According to Graham, Business Links organisations have been gearing themselves up to cope with the increased workload the Bug Buster campaign will generate.

‘But where are they going to find all these people to be trained?’ she asked.

Within the profession, Graham sees an opportunity for medium-sized firms with IT consultancy wings to boost their activities, ‘but if they’re not already attacking the market, then God knows what they’re doing,’ she added.

John Oates, head of Kidsons Impey’s nationwide IT consultancy, is already advising clients on how to tackle millennium compliance. From his base in Manchester, Oates works closely with the local Business Links agency.

‘Manchester will probably cope better than many,’ said Oates, but ultimately, he said, the responsibility for compliance must rest with clients. ‘Small business tends to focus on selling or making things and are not necessarily good at strategic planning,’ he said.

He also worries that larger organisations are paying such high salaries and fees to secure IT skills that they will eventually deprive smaller organisations of the necessary personnel.

Small and medium-sized businesses are the prime targets for the government’s bug-busting campaign, but Taskforce 2000 continues to emphasise the seriousness of the problems facing larger firms and public sector systems.

Chantrey Vellacott’s head of economics, Maurice Fitzpatrick, estimated the likely costs to total #15bn for the country as a whole, with #12bn required for the public sector, around #1.5bn of which will be needed by the NHS alone.

‘The government’s own systems in the Inland Revenue and the National Health Service are way behind,’ said Guenier.

A statement released by Taskforce 2000 on the Friday before the prime minister’s speech urged the government to go further than allocating cash for training small firms.

The action group argued that serious problems faced all businesses (see box) and it was time for senior managers and government ministers to be held personally accountable for year 2000 preparations.

Among the measures Taskforce 2000 recommended is for the government to make the millennium bug a national emergency and to publish public-sector contingency plans.

Listed companies should be required to provide full details of their compliance budgets and plans to the Stock Exchange by the end of June and the Bank of England and Financial Services Authority should extend their remits to ensure any potential systems failures in the financial sector are contained.

It might be seen as churlish to move the goalposts at the very moment the government makes a concerted, world-leading effort to make progress on the millennium timebomb, but Guenier is unrepentant. ‘If what we saw this week is the best in the world, it’s pretty depressing,’ he said.

MILLENNIUM BOTTLENECKS

Taskforce 2000 reports businesses are finding that as they attempt to tackle the millennium bug, the challenge is proving much more difficult than they expected:

– budgets are escalating fast;

– many large companies are falling behind schedule and struggling with – unexpected supply chains and embedded software problems;

– testing compliance presents massive difficulties;

– preparation for the euro is making it harder;

– there is concern about the preparedness of the utilities and – telecommunications industries; and

– the public sector is more behind than the private sector.

Taskforce 2000 concludes: ‘Big computer jobs are usually late. This one – the biggest ever – is made worse by two factors: rapidly reducing time and too few skilled people.’