Entrepreneur’s Notebook

You’re running a business in L.A., and as if you didn’t have enough to worry about, there’s a potential new calamity barreling down the freeway in your direction. It’s the “Millennium Bug,” and this particular varmint is huge. You may be able to protect your business from the bug before it has a chance on Jan. 1, 2000 to wreak havoc on everything you’ve worked so hard to build. The Millennium Bug is not really a bug, but the result of a long-standing conceptual flaw in the architecture of computers. When the architecture for most microprocessors was developed, software and hardware were designed to consider only six-digit dates. In practical terms, that limited computers to the date range of Jan. 1, 1901, through Dec. 31, 1999. The upshot? In the worst-case scenario, the Millennium Bug could cause 80 percent of the world’s computers to register the wrong date at the turn of the millennium, throwing much of our planet into computer chaos. For the moment, let’s forget the planet’s problems how serious is the risk to your business? That depends on which computer systems and software products you’re using. If you are operating in modern computer environments such as Microsoft’s Windows 95 or Apple’s Mac OS, you are at substantially lower risk than if you are using an older environment. Some Pentium systems have been designed to be “year 2000-compliant” meaning they can handle the arrival of the new millennium without any sweat. Likewise, Mac owners don’t have to worry about their hardware. Where software is concerned, businesses using computer programs that are still in publication mainstream products that have not been customized are at lower risk. If software publishers haven’t already done so, they will update their products to be year 2000-compliant. The real problem is with older systems. Computers that run on 286 or 386 chips and software developed for DOS or early versions of Windows are unlikely to be compliant, since they were designed to use only a two-digit year code and have not been updated. Some software for Mac systems may be noncompliant as well. Your business is especially vulnerable if you’re using software you had specifically designed for your applications. Let’s say that in the early ’90s you purchased a large software package developed in DOS and had it customized to fit your company’s needs. Through the years, you’ve never updated the software because it always accomplished what you needed to have done, and it was upwardly compatible to modern operating environments. Sounds great. Your company hasn’t outgrown the software and is now running it on new Pentium computers. The problem is, while your new hardware is year 2000-compliant, the software is not. To further complicate matters, the firm that developed the software has changed hands, abandoned the product line or gone out of business altogether, leaving the program unsupported. If you are in this predicament, you have two basic options: One, have programmers rewrite the software program to make it compliant. Or two, throw out the noncompliant computer system you’re using to run your business and purchase a compliant one or have programmers develop it. Making the right choice between these two possibilities both of which are costly depends on a number of factors, including the obsolescence of your existing systems, the availability of new technologies, and cost-benefit implications of implementing completely new systems. Only you can decide which option is best for your company. What’s the first thing to do when you evaluate your situation? Identify the systems that are critical to the survival of your business and test them for year 2000 compliance. With your computers, the easy way to do this is by changing the dates of their clocks to Dec. 31, 1999, 11:57 p.m. Wait a few minutes and reboot. Then, using back-up data only, enter an order or run an analysis and see what happens. Contact the manufacturers of your hardware and publishers of your software and query them about their products’ compliance. Be sure to get it in writing. Next, consider all the ways you rely on outside service providers. Contact them to determine what steps they’re taking to be compliant. Again, get it in writing. Also, identify all noncritical systems with embedded computer chips fax machines, industrial equipment, key-card readers, and so forth and test them if possible. Consult their manufacturers, talk to consultants, and get it in writing. Now that you have identified, prioritized and tested your systems, develop a plan of attack to make your entire operation compliant. This is an enterprise-wide effort, not just the responsibility of MIS and should be given the same level of importance as any project that is critical to the survival of the firm. Work on the most important systems first. Engage appropriate personnel to begin rewrites as needed. Evaluate replacement systems. Set up a timetable and a budget. Remember, much of this undertaking may be tax-deductible. By beginning your planning now, the Millennium Bug may be nothing but a temporary fly in the ointment. Steven J. Geller is a manager at Roth, Bookstein, & Zaslow LLP, a full-service accounting and business management consulting firm. He can be reached at [email protected]. Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact Dan Rabinovitch at (213) 743-2344 with feedback and topic suggestions.