The Millennium Change Is Shaping Up To Be a Major Headache for Corporate America

Dec. 21, 2004

For companies that use computers, which is just about every enterprise imaginable, the year 2000 is looking more and more like that new Doberman on the block must look to the mail carrier. The threat is real--the only question is whether that little can hanging from the postman's belt offers adequate protection from potentially serious downtime (see "Tick tock 2000," IW, Sept. 2, Page 37). In case you've been off riding the Space Shuttle for the past year, most mainframe software code, as well as that for some minicomputers and many older-model personal computers, has been programmed to accept only two digits to represent the year, and cannot accommodate a four-digit year. Consequently, many business applications that companies depend on will interpret "00" as 1900. The result could be serious malfunctions of all kinds of programs, leading to major business disruptions. To avoid the problem, many companies have already begun massive efforts to locate, change, and test software code that will become defective once Jan. 1, 2000 arrives. The problem is particularly acute for banks and insurance companies, which depend on time-based calculations, but manufacturers are not immune. All manner of business applications are affected, from calculations for employee benefits and 401k plans to corporate financial accounts, loans, and insurance. To help business get ready, scores of software companies--including Adpac, TransCentury Data Systems, Peritus Software Services, and Reasoning Inc.--as well as several consulting firms have come up with different solutions for the date change dilemma. The problem is, most fixes are expensive and time-consuming, often requiring years of programming time and costing tens of millions of dollars. What's more, most 2000-fix programs tend to be only semi-automated at best, meaning that armies of programmers must be set to the task of ferreting out and changing the old dates. According to an estimate by the Gartner Group, a Stamford, Conn., information technology research firm, the average large company may end up shelling out $40 million to handle its date-fixing chores, and the total tab to corporations could reach $600 billion worldwide. Now one fledgling software firm whose cofounder invented the computer modem and developed a system now in widespread use that improves the quality of color TV claims to offer a silver bullet--a fully automated means to convert old Cobol-based (common business-oriented language) mainframe systems into usable year-2000-conversant code. MatriDigm Corp., cofounded by inventor Franklin Chiang, is offering to fix companies' mainframe Cobol code at the software firm's year 2000 "factory" in Fremont, Calif. In a nutshell, MatriDigm's software identifies places where dates occur, adapts the data to handle a four-digit-year, and tests the results before converting the old code to the new 2000-compliant stuff. Exceptions that can't be handled by the computer are kicked out to a team of specialists who, rather than spend time fixing each one, simply adapt the system to handle the same type of problem the next time it occurs. "It's the same as the concept of continuous improvement," explains MatriDigm CEO and cofounder James Brady, who retired from IBM in 1995 after 34 years. One CIO who's tried MatriDigm's service is positive about the results. "We're very optimistic that we'll enter into a contract with them," says Marlene Lockard, director of the Dept. of Information Services for the State of Nevada. Most of the state's business systems-- some 20 million lines of software code--is Cobol-based, Lockard says. "We're interested in saving money and time, and that's what's so very attractive about the automated approach," she adds. The state originally estimated its year-2000-fix cost at $35 million, but Lockard now figures the state "will realize a substantial savings" as a result of going with MatriDigm. And there are signs that MatriDigm may not be alone in the market for fully automated year 2000 solutions. Another vendor offering a similar "fix factory" is Reasoning Inc., Palo Alto, Calif. The company, which recently hired former Tandem Computers Inc. CEO James Treybig as chairman, performs its automated code analysis and conversion on an outsourced basis.

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