Subject: ITAA's Year 2000 Outlook

ITAA's Year 2000 Outlook
October 2, 1998                        Volume 3, No. 36

Published by the Information Technology Association of
America, Arlington, VA

Bob Cohen, Editor bcohen@itaa.org

Read in over 70 countries around the world

ITAA's Year 2000 Outlook is published every Friday to
help all organizations deal more effectively with the
Year 2000 software conversion.  To create a
subscription to this free publication, please visit
ITAA on the web at https://www.itaa.org/transact/2ko
utlooksub.htm.  To cancel an existing subscription,
visit https://www.itaa.org/transact/2kremove.htm.

ITAA's Year 2000 Outlook is sponsored in part by CACI
International Inc., DMR Consulting Group Inc., and
Y2Kplus

Mexican Y2K Czar Sees Country Pulling Ahead

North America may have an unexpected favorite in the
race to the Y2K finish line: Mexico.  Without the
ringing of hands and gnashing of teeth that often
accompany national efforts to cope with this situation,
Mexico has put together a strategy and actio n plan
which, at least on the surface, may put it ahead of
many countries-and by more than just a nose.

That's fine with the plan's architect, Dr.  Carlos
Jarque, President of the Instituto Nacional de
Estadistica, Geografia e Informatica (INEGI).  Jarque
also chairs the National Commission for the Year 2000
Conversion, in effect he is Mexico's Y2K Czar.  Ja rque
candidly says that his nation sees competitive
advantage in the world's date confusion.  From a trade
and investment point of view, it's a case of having
priorities straight and a straight-forward approach to
getting the job done.  Clearly, Mexico h opes that its
hard work will not only lead to the uninterrupted flow
of in-country basic services and commercial
transactions, but will also catch the attention of
international investors seeking Y2K kosher countries in
which to invest.

Y2K is nothing if not a numbers game, and Jarque knows
a thing or two about making things add up.  His
institute houses all of Mexico's seven statistics
agencies under one roof.  With over 30,000 employees,
Jarque lays claim to one of the world's most mod ern
government statistics and geography programs (INEGI
does land titling for approximately half of Mexico
too).  INEGI also reviews and approves the informatics
development plans of the government's 263 public sector
agencies.  In his spare time, Jarque heads the United
Nation's Statistics Commission.

Whom better for Mexican President Ernesto Zedillo to
turn to for keeping tabs on the nation's Y2K response?
Jarque says the 263 agencies represent 2000 Y2K
projects.  He says 80 of these agencies are done today.
Converted.  Tested.  Interfaces checked.  Back in
production.  The rest, he says, will be done by
December 1998.  Of the remaining 183 agencies, only 29
operate systems considered strategic to the nation's
well being.

INEGI also has its finger on the pulse of Mexico's
banking industry.  Jarque points out that the country
has only 14 banks altogether.  Between banks and
brokerage firms, that's a total of 621 institutions and
just 2500 systems.  He says 35 percent of ban ks have
completed their Y2K programs and 65 percent are over
half way home.  Brokerages firms are making even faster
progress, with 56 percent done and the balance more
than 50 percent done.

In the private sector, Mexico's Y2K scorecard is not
quite as impressive, but even here the country may have
an inside track.  First, the numbers.  Jarque says only
25 percent of firms have Y2K strategies implemented.
Eighty-four percent of company presi dents know about
the Y2K problem, he says, but they "don't quite grasp
it yet."  Many, he says, have an over-simplified view
of how long the conversion will take to complete and
may not even see its relevance to their operations.

The vast majority of these
firms-without-a-plan-in-place are small companies, and
here again, numbers work in Mexico's favor.  Of the
nation's 3.2 million "establishments," Jarque says only
34 percent have IT equipment.  Of that 34 percent, less
than a th ird-about 300,000 establishments--have
computer networks.  While many small and mid-sized
firms in the developed world try to cope with matters
Millennium, only one-third of Mexico's small businesses
have a computer.

But the country is apparently not leaning on this
comparative lack of access to justify a lack of action.
Mexico began its national Y2K program through the
Central Bank and Comptroller's Office.  Jarque says
that President Zedillo realized that such an ap proach
missed the information interdependencies throughout
society and therefore launched the Commission.  Plus he
did it with an accent on high visibility, opting for a
ceremony at the Presidential Residence with the full
cabinet in attendance.

The Y2K Commission is composed of cabinet ministers,
not their subordinates.  This body reaches out beyond
the federal agencies for its membership, also including
executives from key industry chambers of commerce,
university chancellors, and elected offic ials from the
legislative branch.

The Commission is divided into three main parts.  A
sector group is responsible for the public, financial
and private sectors.  A strategic group looks at the
cross-sector industries, such as energy, health,
transportation or telecommunications.  A third group
provides oversight assessments, monitoring and
reporting, dissemination of methodologies, contingency
planning and the like.

The activity of these groups varies by the size and
scope of the industries involved.  The
telecommunications committee, for instance, has hired
an auditing firm to review the Y2K status of the
industry.  With only 20 communications firms
in-country, the job is manageable.  Not so for health
care, with thousands of hospitals, clinics and other
outlets to be checked.  The health care committee
instead must fall back on awareness raising and
information sharing strategies.

"Small-is-good" factors into many aspects of Mexico's
Y2K strategy.  For instance, Jarque says three
companies supply the nation's energy.  One call to
Pemex can answer many questions about Mexico's energy
industry preparedness.  The same is true in ba nking,
Jarque says.  "It's much easier to build a 14 x 14
matrix of banking transactions," he notes, than the
thousands by thousands matrix required to capture the
big picture in the U.S. banking industry.

So put "small" into Mexico's competitive strategy.  And
"new."  Jarque says 40 percent of IT equipment has been
purchased since 1996.  Other potential advantages
include: the National Commission with broad, high level
representation; a statistics-savvy I NEGI not just
summarizing agency status reports but polling every two
weeks to take its Y2K pulse and temperature;
legislators sitting on the national commission and
taking ownership of the solution; geographic
concentration of information technology in t he big
metropolitan areas of the country; and trade
concentration with well identified trading partners.

Will Mexico turn this century lemon into national
economic lemonade?  Seven thousand government employees
are working on it.  To help small businesses cope,
INEGI is printing Y2K assistance guides, has a 1-800
number to call, and offers Internet pages wit h
information.  The institute even provides those without
Internet access an "open door" policy, offering its
regional offices to reach this Y2K cyber-material.

And for now, at least, Mexico's Y2K czar is not
conceding anything to his global counterparts, whether
North or South of the border.  Indeed, Jarque says he
would compare Mexico's Y2K progress with any region,
whether in the Americas, Europe, or Asia.  He says a
recent World Bank risk assessment shares this favorable
opinion.  That's an opinion investors will no doubt
appreciate if Mexico makes good in the run up to the
Year 2000.

Senate Committee Hears About Emergency Preparedness

A Senate Special Year 2000 Technology Problem Committee
hearing today took up the interesting issue of
government emergency readiness.  The lawmakers
addressed the big "What If?" issue with, among others,
John Koskinen of the President's Council on the Ye ar
2000 and Lacy Suiter, Associate Director for Response
and Recovery, Federal Emergency Management Agency
(FEMA).

While much air time was given over to the plight of
small business, Koskinen also expressed concern for
small to medium sized municipal governments.  Committee
Co-Chairman Chris Dodd (D-CT) suggested municipalities
could be tapped out by the turn of the c
entury-literally.  Dodd indicated that an unknown
number of municipal fuel pumps may become inoperative
on January 1, 2000 due to embedded computer chips.
That could put the brakes on everything from trash
trucks to police cars.

In his testimony, Suiter seemed to suggest that to
respond adequately, FEMA needs to understand better the
size of the bear it's being asked to skin.  "It is
difficult," he said, "to determine the exact nature and
extent of the threat posed by the Y2K pro blem.
Reports in the…media and on the Internet range from
predictions of business-as-usual to some form of cyber
winter.  To identify and prioritize actions to take…we
need credible assessments from authoritative sources
that describe specific vulnerabil ities, areas at
highest risk, and potential consequences…" He said a
Y2K Council report due later this year will begin to
supply the necessary information.

Suiter poured cold water on the more fiery forecasts of
the Y2K problem.  He said that FEMA deals with the
physical consequences of disasters on lives, property
and public health and safety.  "It is difficult to
imagine a Y2K scenario that would trigger wi despread
physical consequences that threaten lives and
property," she testified.  He acknowledged, however,
that Y2K failures could cause "scattered disruptions in
critical systems such as traffic control,
communications or power, which would complicate …
disaster response."  Suiter said emergency management
and fire service organizations cannot be viewed as a
substitute for personal responsibility and
preparedness.

Congress Passes Y2K Bill

The clouds of partisan wrangling parted in Washington
this week as Congress passed the first legislation on
Year 2000.  Pushing aside other considerations, both
the House and Senate unanimously passed without debate
S. 2392, the Y2K Readiness and Informat ion Disclosure
Act.  The bill encourages businesses to exchange
information on compliance, tools and solutions and
provides liability protection for those statements.
Observers expect President Clinton to sign the bill the
week of October 13, in advance of the Small Business
Administration's Global Awareness Week.

Florida Lawmaker Crafts Liability Bill

A Florida lawmaker is proposing legislation to provide
liability protection for both public and private sector
entities making good faith attempts to solve their Y2K
problems.  State Sen.  John Grant (R-Tampa) would
disallow Y2K class action suits unless e ach member of
the class had suffered damages of at least $50,000.
The limitation would not apply, however, to IT vendors
for the failure of their products.  Grant would also
limit punitive damages awarded to three times
compensatory damages (state agenci es would pay only
compensatory damages).  Partial protection would also
be provided for officers and directors of companies
making good faith Y2K efforts.

FAA Seeks New Flight Plan for Federal Funds

The Federal Aviation Administration (FAA) has asked
Congress to allow the nation's airports to reroute $100
million in federal grants to Y2K repairs.  The Air
Transport Association says one third of 81 airports
surveyed have no formal plans for dealing wi th the
date issue.  Another 24 of the 81 facilities are at
least three months behind or say they won't be finished
until June 1999.  The FAA made its request at a House
Transportation Committee hearing this week.

Closer to Home

Ceridian Tax Service, Inc., Information Services
Division, of Fountain Valley, California has received
ITAA*2000 certification.  ITAA*2000 is the industry's
century date change certification program.  The program
examines processes and methods used by com panies to
perform their Year 2000 software conversions.  Ceridian
Tax Service, Inc., Information Services Division, of
Fountain Valley, California participated in a rigorous
evaluation of its approach to date conversion, with
extensive analysis in eleven discrete process areas
deemed necessary to a successful Year 2000 conversion.

Business to Business

Computer Associates International, Inc. has entered
into a strategic partnership with IntelliWare Systems,
Inc. to provide full Y2K solutions for IBM VSE
customers.

Ultradata Corp., Pleasanton, CA, has been awarded a Y2K
contract by GenFed Federal Credit Union in Akron, Ohio.

Millennia III, Westport, CT, has announced the
availability of LINK2000 for distributed systems.

Transformation Processing Inc., Toronto, Canada, has
won a Y2K contract with the town of Markham.


ITAA Y2K Information Center

Solution Providers Directory
http://www.itaa.org/script/2000vend.cfm

ITAA*2000 Certification Program
http://www.itaa.org/2000cert.htm

Outlook Archive
http://www.itaa.org/script/get2klet.cfm

Legislative and Litigation Table
http://www.itaa.org/Y2Klaw.htm

Calendar
http://www.itaa.org/y2kcal.htm

Vendor/User Status Questionnaires
http://www.itaa.org/questmain1.htm


Copyright ITAA 1998.  All rights reserved.  The
Information Technology Association of America, 1616 N.
Fort Myer Drive, Suite 1300, Arlington, VA 22209.
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