Judy works in the typical bank operations department. She has 10 years' experience, having worked her way up from teller to vice president. Like most operations professionals, Judy is burned out and overwhelmed.

Her boss has just named her the year-2000 planning coordinator. Terrific. No raise, no bonus, just the opportunity to herd busy bank employees into planning meetings and hear senior executives beam, "I'm not worried about year 2000 with Judy in charge."

Judy is now wondering how she will handle this glorious new assignment. Lately she has spent most of her time integrating acquired banks into her organization-200,000 customer accounts have been converted in only two years. Unfortunately, senior management just keeps asking for more:

"Judy, when will our bank have a home banking product? This is the '90s you know!"

"Judy, how do you expect me to manage with these sales reports?"

"Judy, I've been telling you for years we need a better combined statement. What gives?"

These rapid-fire demands have operations departments scrambling. Judy has no dedicated resources for year-2000 efforts, and her CEO has warned her that the acquisition pace will accelerate.

The answer to Judy's overwhelmed state cannot be, "Damn the torpedoes, full speed ahead!" Such bravado sounds great, but ultimately such a callous approach to a bank's resource shortages will put shareholder value into a nosedive.

In an industry where change is constant, the infamous year 2000 threatens to bring reinvention efforts to a screeching halt. The Gartner Group predicts that 60% of year-2000 spending will come from deferring major initiatives, canceling projects, and cutting out spending on low- volume activities. Year-2000 issues will consume a majority of management information systems-related resources during 1998 and 1999.

The human resources to manage all this change are dangerously scarce. Information Week recently warned that 30% of all technology jobs could go unfilled over the next few years. U.S. colleges are turning out only 24,000 computer science graduates a year to fill 100,000 new jobs. In the face of growing demands, most banks will be lucky to hold onto the technical talent they have.

Bank CEOs need to prepare their organizations for wild change and resource drains. Progress can be made over the next few years, but it will take focus, discipline, and better organizational strategies to manage a multitude of critical projects.

Here are some rules of engagement:

Make the year 2000 the 1998 priority.

With a stable rate environment, strong asset quality, and a rational regulatory community, the year 2000 is the only risk that could put a bank under in the near future. Compliance testing needs to be completed by Dec. 31, 1998. Regulators will be completing initial reviews of most banks by June. The time is now to get the year-2000 effort substantially under way.

Involve system power users and test quickly.

The sheer number of systems and interfaces in your bank will require heavy business user involvement in year-2000 fixes. Bankers must dig up millennium bugs and begin testing as soon as possible. Final bug fixes will only occur after rigorous testing.

Anything besides 2000 must be strategic.

Banks have dozens of technology initiatives on their plates. However, only a few are strategic projects that will truly differentiate the bank in the marketplace. Dump the frivolous projects that will have incremental impact, and go for the few that will bring double-digit improvements to revenue or productivity. Steer precious resources to the managers who will get specific about costs and benefits and are willing to be held accountable for results.

Stop fragmenting; assign projects to individuals.

The banking industry tries to make reinvention the extra-curricular duty of employees, something to squeeze in when there's a little downtime. Downtime? No wonder most bank technology projects come in late and way over budget. Loosely organized, unaccountable teams cannot reinvent the bank. As management guru Peter Senge once concluded, "Most teams operate below the level of the lowest IQ in the group."

In his groundbreaking book "The Mythical Man Month," Frederick Brooks Jr. of International Business Machines Corp. analyzed how speed and work quality decrease significantly as projects become fragmented. Adding more part-time helpers to a fragmented project only slows progress further.

Find your company's "go to's."

Banks often feel they lack talented project managers because they assign projects based on function or title. Forget rank and seniority. Banks should: identify employees who get things done; assign them the most important projects, even if not in their area of expertise; and pay them well. The best employees in a bank can do the work of 10 average employees.

Plan and communicate, but keep it simple.

Outside the core technology group, banks do not use a common set of project planning and communication tools. Consequently, CEOs only have informal means of updating the progress of projects. CEOs should demand that their bank use a simple set of project plans and summary reports that detail accountabilities and deadlines. There is no need for intricate charts that no one really reads. Develop a short planning template and a one-page reporting format that is standard for the entire organization and include your board in these updates.

Understand the real costs of change.

With the year-2000 fix, mergers and acquisitions, and other projects, banks will find it extremely difficult to hold the line on technology expenses. CEOs must gauge these costs during 1998 and realistically assess what must give. Will it be the budget, the mergers, or the projects? Unfortunately, the physical laws of 2000 are working against bank CEOs. The resource shortage is real, and "damn the torpedoes" won't win the battles ahead.

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