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1997-11-20 10:00:23


Economist Warns Against Low-Ball $600 billion Cost Estimate



Paul Strassmann writes that the Gartner Group's widely quoted estimate of $300 billion to $600 billion worldwide is too low. But he is a little vague on how expensive it could get. I say "could" rather than "will" because there is no evidence that most of the vulnerable organizations will ever make the needed repairs.

Here is why most organizations' estimates are too low.

* * * * * * * *

Underestimating the scope: The year 2000 preparedness exercises concentrate on systems created by the IS organization: financial, accounting, billing and customer-related systems. Yet most public mischief will be caused by failing embedded systems, which are rarely under IS control: global positioning satellites, building security systems, logistics tracking and so forth.

Neglecting test programs. . . .

Misusing lines-of-code estimates. . . .

Depending on cost-per-line estimates. . . .

Omitting database rectification tasks. . . .

Overlooking litigation expenses. . . .

Neglecting warranties. . . .

Misjudging interoperability testing. . . .

Forgetting about consequential costs. . .


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