Plan now, thrive later

"We dont know exactly what will happen when Y2K arrives." This is the mantra that keeps many companies from acting decisively to prepare for the impact of the Year 2000 problem on their business.
Written by Mitch Ratcliffe, Contributor
"We dont know exactly what will happen when Y2K arrives." This is the mantra that keeps many companies from acting decisively to prepare for the impact of the Year 2000 problem on their business. It is wrong, because you dont need to know exactly what will happen to be well prepared for an event like Y2K. Planning takes intelligence, not omnipotence.

1999 must be the Year of Contingency Planning for Y2K and doing business in the interconnected and interdependent global economy. It will pay dividends before, during and after 2000, because a company faces many uncertainties in todays economy. Its not necessary to prepare for every potential problem by stockpiling, rather the process of planning should make clear how specific strategies can make your company more ready to respond to a wide range of events. The more situations that you can anticipate in planning, the better prepared your business will be if they should ever happen. Once you have generated a long list of potential events, its possible to make informed decisions about how prioritize and prepare for the future.

The raw materials for contingency planning are easily available to any organization. Failing to use them will cost you your business. Consider that in any disaster area, from a region struck by an earthquake to the city blocks surrounding the Murrah Federal Building after the Oklahoma City bombing, 30 percent of small businesses will fail. Those that plan for emergencies have a much better chance of surviving.

Tools for assessing your immediate Y2K risk in computers and equipment are inexpensive -- failing to do this testing is like leaving an odd lump in your body unexamined by a doctor.

Evidence is easily collected, but it takes footwork. In our Utilities FAQ, we dont give you a general answer to the question "Will the power be on?" Instead, we suggest you take the time to look into the preparedness of the local utility and its suppliers. That process takes some digging in Securities and Exchange Commission filings, Nuclear Regulatory Commission audits, Federal Register announcements and many other documents. But the information is available.

Experience has many lessons, too, even with Y2K-specific problems. Date-related Y2K errors are happening all the time. If yours is a large company, it probably has had a few Y2K problems already. The Information Technology Association of America (ITAA) recently surveyed 400 companies and found that more than one-third have already experienced Y2K problems.

The lessons of these errors are that companies are able to respond to date-related problems without failing. Too often, discussions about the failure of a system is couched in images of staff trying to resurrect pre-computing practices like they were attempting to recall how to light a fire with flint. Planning provides an opportunity for staff to review skills they might need if, for example, the accounting system is down for a day or a week. What would you do if your staff had a day or two of thumb-twiddling time next week? What would you have them do if there is a problem with a manufacturing robot in January, 2000? How are the two situations different? The answer to these questions set the stage for a positive response.

Unfortunately, the ITAA also found that only three percent of the respondents had completed their contingency planning; only 39 percent are halfway through their plan. More companies would be ready if contingency planning became a standard component of management practice. Even a small firm, if it got into the habit of having managers sit down to brainstorm potential problems in a systematic way, would benefit from better preparation.

A perfect plan is never finished. It is changing all the time according to established priorities and principles. The further your business reaches, the further your plan must go. What the ITAA survey suggests is that companies still do not incorporate different issues into an over-arching plan, but develop separate plans for each perceived threat.

This huge investment in Y2K effort should be combined with more general planning to prepare for other problems of the networked economy, like downturns in regional economies, hurricanes in Central America that affect manufacturing costs or profits, and whatever else you might encounter. Make contingency planning a part of your business, starting with Y2K, and earn dividends well into the next century.

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