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Y2K headache not over for companies - Views on News from Equitymaster
 
 
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  • Aug 26, 1999

    Y2K headache not over for companies

    Companies who have already fixed the Y2K bug on their systems have another problem on their hands - Y2K bug on other companies' systems.

    Programmers who developed applications in the past assumed that all dates would belong to the 20th century and hence stored the year as a two-digit number (i.e. 97 instead of 1997). All such applications will either stop working or start giving erroneous results when used with dates of the 21st century (i.e. Year 2000 and beyond). It is estimated that 80-90% of all applications will be affected by the Year 2000 problem.

    Companies after having invested millions of rupees to solve the Y2K problem, will have to live with the fact that even if they are Y2K-compliant, they may very well be affected by the failure of a trading partner.

    Indian companies like HLL have woken up to this fact, and as a policy measure will only deal with vendors/suppliers if they are Y2K-compliant. But more companies need to realise this and ensure that their suppliers are Y2K-compliant.

    According to a recent survey of 189 companies conducted by the Confederation of Indian Industry (CII), only about 50% had tested their supply chain. As far as disasters go, about 50% had alternatives ready in the event of failures in public utilities.

    Companies are already initiating steps to become Y2K-compliant, so that they don't lose out on orders from their customers, who have strict standards about Y2K compliance.

    In India, so far, Y2K-compliance has become an issue only with the large corporates, with smaller ones yet to perceive the gravity of the situation. SEBI has done its bit, by making it mandatory for companies to publish their Y2K-compliance status in their FY99 annual reports. But the level of awareness is still very low. According to Y2K Action Report, Y2K-compliance among the India's power, port and telecom units is very low. In the power sector, the State Electricity Boards (SEBs) in particular, are very low in Y2K-compliance, which can prove to be a matter of concern in the future.

     

     

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