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1998-05-12 13:56:30


Titanic Is Sinking, But There's Still Time, Says Prudential



Irene Dec is a y2k spokesman for Prudential. She testified to a House Ways & Means subcommittee.

(I remember seeing a cartoon published in the mid-1930's. A man runs into an office: "The Rock of Gibralter just sank!")

She described the problem: gigantic. (The length of her printed statement matches this assessment.)

She came to give advice: charitable.

She neglected to emphasize: Prudential is not compliant after three years of work.

She said, "It's too late to start early." I suppose she must have meant something. It sounds clever.

What annoys me is all the space she devoted to all the steps Prudential took. If Prudential were compliant, I would be impressed. But this is a case of the blind leading the blind. There is a very big ditch not too far ahead.

What she should have said was this: "Prudential is not compliant No organization our size is compliant. Nobody knows if any organization our size can get compliant. Most of them won't; that's for sure. But I'm here to show you how we haven't been successful. Go, thou, and do likewise, unless you've got a better way."

What the committee needed to hear was where Prudential is in the process. How close to compliant is the firm? The committee needed specifics. That was what the committee did not get. There are shareholder considerations, after all.

At the end, she reverted into cheerleading. She waxed eloquent. "Failure is not an option."

That's the heart of would-be autonomous man's arrogance. Man looks at the work of his hands, and he says, "Failure is not an option." Not only is failure an option, it's inevitable when men attribute their success to the strength of their own hands (Deuteronomy 8:17-20).

Then it was time for some good, old-fashioned flag-waving: "As world leaders, we Americans must take the lead in Y2K compliance. We must set the example for other countries to follow. We must demonstrate with decisive action and bold measures that failure is not an option."

This, she said to a government subcommittee. She expects bold action from a government committee.

Cheerleading is an American athletic tradition. There is no evidence that it wins games. When your team is down 42 to 0, and there are three minutes left, you would be wise to start moving toward the parking lot if you want to get out ahead of the crowd. Let the die-hard fans stay behind to make the cheerleaders feel useful. Your presence will do the players no good at all.

You do not want to get stuck in the looming traffic jam.

* * * * * * * *

Statement of Irene Dec Vice President, Year 2000 Program Prudential Insurance Company of America

Testimony Before the Subcommittee on Oversight of the House Committee on Ways and Means

Hearing on the Year 2000 Computer Problem

May 7, 1998

Congresswoman Johnson and members of the committee:

My name is Irene Dec and I am a Vice President of Corporate Information Technology at Prudential. I am the Prudential Year 2000 Program Manager, leading the company-wide Program Office. It is my responsibility to work with all of Prudential's Business Groups and Corporate Functions to bring the entire enterprise to Year 2000 compliance. I am pleased to have this opportunity to present Prudential's experiences regarding the magnitude of the Year 2000 problem. In the time you've given me, I'd like to discuss the strategies Prudential is using to solve the Year 2000 problem. I also will discuss how these strategies might be applied to other large organizations. . . .

Too Late to Start Early

As of today, there are exactly 603 days left until we reach the Year 2000. That includes only 86 weekends. At this point, it is simply too late to start early. We began addressing the Y2K issue at Prudential in 1995. While we are confident we'll meet our objectives, we are not wasting one single day. This is the ultimate information technology deadline. And unfortunately, information technology professionals are widely regarded by our corporate colleagues as people who cannot meet deadlines.

It is time to move beyond awareness of the Y2K problem. It is time to take action. . . .

At Prudential, we developed our Year 2000 strategy around several key decisions. I'd like to take some time to walk through these decisions to show you how we built our strategy and how it is moving us toward Year 2000 compliance. . . .

At Prudential, our Year 2000 Program Office looked at every one of our 1,533 applications and decided to renovate 1,035 of them. With a total of more than 170 million lines of code, we are working on fixing about 97 million of them. Our decision was to renovate 75% of our existing applications. We decided to replace 12% and retire 13%.

At this point, however, replacement strategies are high-risk. It is too late to begin a replacement/new development project, unless the project has been targeted for completion by 1998. The better approach would be to consider a renovation strategy and begin immediately. . . .

Since Year 2000 is a business management risk, it requires a business continuation plan. Organizations need to look at the potential for high risk to the company and its constituents and create contingency plans for critical business functions.

Contingency planning goes beyond applications. You must also prepare contingency plans around infrastructure, including all your data centers, computers, buildings and facilities, and your telecommunications. In addition, you must have contingency planning in place as it relates to your business partners and suppliers. . . .

One of the greatest risks to an organization is its Y2K vulnerability with business partners and suppliers. You can control your own applications and systems. You can have an airtight business continuation plan in place. But if your critical business partners and suppliers fall short on delivering Y2K compliance, that could have serious repercussions for your organization. . . .

A Problem of Titanic Proportions

That is a summary of the strategic decisions Prudential and any other large organization must make in order to orchestrate a successful Year 2000 transition. This is a huge undertaking for our company and for every organization and industry around the globe. No one has ever had to do an IT project of this size and scope before, and it will be a significant challenge to our industry.

But one key message I am compelled to leave with you is this. Year 2000 is an issue of Titanic proportions, but information technology controls just a tip of the iceberg. The remaining and often unseen risks include business partners, software vendors and the validation of the desktop environment. . . .

It was the unseen portion of the iceberg, which struck Titanic below-decks, that doomed everyone aboard. My grave concern is that the leaders of too many organizations will dismiss the critical nature of the Y2K project. They may overestimate the ability of their already stretched information technology staff. Or perhaps, they will underestimate the amount of work and resources needed to become Year 2000 compliant by the deadline. It's a deadline that is imposed by the relentless force of time the toughest taskmaster of them all.

Failure Is Not An Option

In my opinion, the Year 2000 problem is a sink or swim proposition. But because I am, by nature, an optimist, I prefer to leave you with a different image of Y2K. . . .

For us at Prudential, and for any organization that plans to succeed into the 21St century, failure is not an option. . . .

Yet, I believe if you are smart and strategic, if you make every second count from now until the clock strikes midnight on December 31, 1999, you will achieve your goals and survive this mission critical assignment.

Because we at Prudential have zero tolerance for Y2K failure within our own organization, we have zero tolerance for Y2K failure within any of our business partners' organizations. We are aggressively working with all our partners in fields as diverse as finance, law, medicine and government to ensure that Prudential's customers will not feel so much as a tremor when we collectively blast into the new millennium.


That is why, in closing, it would be impossible for me to overstate the size and scope of the challenge the Federal government faces in preparing to meet its obligation to the citizens of this great nation regarding Year 2000 readiness. As world leaders, we Americans must take the lead in Y2K compliance. We must set the example for other countries to follow. We must demonstrate with decisive action and bold measures that failure is not an option.


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