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1998-05-04 12:11:06


British Select Committee Describes Domino Effect



A House of Commons committee with the Science and Technology Committee has produced its Second Report (April 1, 1998). It is a detailed, readable, heavily documented report on y2k. Its description of the domino effect is concise and excellent.

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7. Many witnesses pointed out that, even if an organisation ensured that all its own systems were millennium ready, it would still not be possible to guarantee that it was not affected by century date change related problems. For instance, IBM told us that they must "also ensure that their systems are not contaminated by two-digit dates from computers linked to their own by public or private network".[9] This information chain aspect of the problem not only affects organisations where their networks are directly connected to others. A date change related failure which causes one particular company to have errors, for example in ordering, dispatching or paying for goods or services, could have severe consequences to other, millennium compliant, companies in the supply chain. This may be a particular problem for organisations which hold minimal stock and rely on 'just in time' deliveries as they may not have the ability to withstand even minor delays in deliveries or collections.[10] Morgan Stanley told us that "external product and service providers represent one of the greatest areas of risk"[11] and, similarly SmithKline Beecham stated that "arguably the biggest threat to our company comes from non-compliant suppliers, customers and other business partners".[12] Thus the implications of non-millennium compliance are wider than a single business. Companies cannot continue to trade if their suppliers cannot provide the goods they need or customers are unable to purchase their products. Left uncorrected, century date change problems could affect the integrity of entire business chains.

8. Such inter-dependencies between organisations are not restricted to the UK.[13] Many organisations rely on suppliers, service providers, customers or business partners in other countries: for instance, Marks and Spencer told us "we deal with ... a long international supply chain, on whom we are dependent for merchandise and services"[14] and EDS that its operations in the UK "could be seriously affected by the failure of other countries to fix their problems".[15] Moreover, any organisation with business connections overseas is likely to depend on international telecommunications and banking systems which themselves have to be made millennium ready. As the British Bankers' Association (BBA) stated "it is difficult to exaggerate the scale of the impact on banks and through them the UK economy if they and their customers and counterparties ... abroad are not Year 2000 compliant".[16]


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