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1998-04-20 13:25:57


New Zealand Government Report: How Bad a Crisis?

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This government report indicates that y2k poses the largest single "continuity (read: survival) problem" that New Zealand business has ever faced. Those who dismiss y2k as a "blip" or minor problem will receive no support from this report. The report is called THE Y2K PROBLEM, Report of the Government Administration Committee" (April 1998).

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The Y2K problem has emerged as potentially the single most significant business continuity problem ever faced by public and private sector organisations in New Zealand and abroad. The implications of the problem are serious. The Minister of Information Technology told us that the full extent of the Y2K problem is unknown. The State Services Commissioner told us that most public sector organisations are going to face Y2K disruption of some sort. He said that computers are pervasive in business and it is unlikely that all organisations will address every piece of equipment which might suffer Y2K problems. WestpacTrust told us that Y2K problems will affect virtually every company and government agency in some way. It said that it is likely that some New Zealand companies will not survive their Y2K problems intact. Coopers and Lybrand told us that two-thirds of the organisations it surveyed consider that the problem is a serious issue for them. Flow-on effects from Y2K problems could have serious consequences for the whole community.

Documented evidence of major system failure resulting from Y2K problems in both the private and public sectors is already beginning to appear. The forward booking systems of some Crown Health Enterprises have already been affected as have some insurance companies writing policies due to mature beyond the turn of the century. Some credit cards with expiry dates beyond 2000 are currently being rejected by retailers. Retail and warehouse operations are already having problems with the rejection of new stock. Food manufacturers are suffering problems with the sell-by dates on products, with food being destroyed before necessary as a consequence. Coopers and Lybrand said 25 percent of organisations have already struck problems.

The Y2K problem is not merely confined to computers. Any device using a microprocessor chip to control plant or equipment may fail the date test. The scale of the Y2K problem for embedded systems may dwarf that for conventional computer systems. We heard that the modem car alone contains more than 20 chips, which control processes such as ignition and engine combustion, any one of which could fail. Billions of chips are manufactured every year. While it is estimated that only 3 or 4 in a 1000 may malfunction this represents a very real risk. For example, in building services chips control many processes from air conditioning to lifts. In its response to our survey the Ministry of Foreign Affairs and Trade told us that "there could be a risk that buildings overseas could become unusable due to the failure of various embedded building control services" in reference to its overseas posts. The same could be said for many buildings in New Zealand.

The Y2K problem may potentially affect: information systems including computer networks, personal computers and the applications running on them financial systems including EFTPOS, ATMs, trading systems and credit systems microprocessor chips embedded in a range of plant, equipment and appliances such as elevators, heating controls, traffic lights, telephone exchanges, cars, trucks, buses, aircraft, navigation equipment, water pumps, engines, lifts, automatic doors, security systems, cash tills, and many home appliances. . . .

As if the problem of correcting the turn of the century date change problem was not enough, organisations are finding that software writers used a string of unusual and inappropriate dates to indicate indefinite or unknown information. Most concerning is that many programmers used the year 99 for the indefinite future. For example, the unknown retirement date of an employee. A particular favourite was 9/9/99 although other combinations were used. This could cause huge disruption for an enormous range of banking, payroll and other computer based systems. The 9 September 1999 will provide the first significant foretaste of what to expect with the turn of the century.

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