Overseas businesses trail U.S. companies in awareness of and action on the year-2000 problem, PA Consulting Group has concluded.
The gap could pose serious problems for U.S. banks that transfer funds internationally or use foreign third-party suppliers that are not "millennium-compliant."
"People have focused on getting their in-house in order," said Jason Hill, managing consultant at PA Consulting in London. Now, according to his company's International Millennium Bomb Survey, companies worldwide are increasingly facing computer troubles that could result from their partner firms' failure to make year-2000 fixes.
Such fixes involve altering lines of computer code that include date references identifying years with only two digits. A two-digit date reference renders 2000 as 00, which could be interpreted by some systems as 1900. Incorrect date processing could cause meltdowns in systems that handle jobs like interest calculations or invoice processing, among others.
Mr. Hill said 100% of U.S. companies responding to the survey demonstrated full awareness of the year-2000 issue, compared with only 78% of respondents in Europe.
The survey, conducted during September and October, included responses from about 1,000 public- and private-sector organizations in 15 countries in Europe, Asia, Australia, and North America.
Among technology professionals, awareness of the year-2000 problem and its consequences is at 87%. But only about 55% of the senior managers are fully aware of the implications.
About half the organizations surveyed have yet to install a formal year- 2000 program. As a result, few could supply specifics about their projects.
Of the surveyed companies, 42% were unable to estimate the number of man-years required for fixes, 29% were unable to estimate the cost of their project, and 26% were unclear about where their economic and staffing resources would come from.
In general, finance and technology companies are closer to fixing their in-house problems than other industries. Their preparedness stems from a heavy reliance on computer systems that make extensive use of dates, Mr. Hill said.
Among overseas companies, Mr. Hill singled out two U.K. banks, Barclays Bank PLC and National Westminster Bank PLC, for the progress they are making.
National Westminster sent out what he termed an "excellent booklet" to its small-business customers with step-by-step instructions for assuring year-2000 compliance. Barclays wrote to all of its customers, outlining its plan.
Some U.S. companies are taking steps to goad their partners into addressing the year-2000 issue. J.P. Morgan & Co. and Fidelity Investments have been driving a plan to test cross-border computer systems.
"This is a self-appointed group that aims to work out how to test interbank systems," Mr. Hill said.
On average, it will take 56 man-years of effort for each organization to fix the problem, the survey showed. A company with more than $1 billion of revenue can expect to require at least 181 man-years.
PA Consulting estimated that about 44% of staffing for year-2000 fixes will have to come from external sources. As time grows shorter to accomplish the fixes, qualified workers will become harder to find. Indeed, many U.S. companies already are having trouble finding capable programmers for their year-2000 projects.
Small companies generally lag behind larger ones in terms of awareness and action. Only 43% of senior managers at smaller firms were aware of the year-2000 problem, compared with 73% in the largest organizations. Further, only 37% of smaller organizations had mapped out a plan of action, compared with 79% of the largest organizations.
The PA Consulting survey, which was the latest of three done during 1996 and 1997, concluded that levels of action and understanding within most organizations were inadequate and that immediate action was needed to rectify the problem.