Y2K consultants warn time is of the essence

By Johannes Simbolon and Wachyudi Soeriaatmadja

JAKARTA (JP): As the year 2000 nears, Y2K consultancy firms are anticipating a flood of orders from local companies wanting their computers and computerized equipment made Y2K compliant.

Many consultancy firms have aggressively marketed their services over the past three years, but until recently local companies reacted coolly. Some companies were oblivious to the perils of the Y2K bug, some simply lacked the money to do anything about it.

But as the next millennium approaches and with the press progressively reporting the threats behind the millennium bug, many local companies have become increasingly anxious about the future of their computerized operations.

"Many companies are worried and nervous. The demand for consultancy on the preparation on the Y2K bug will be on the rise," said Arya Soemali, marketing and sales general manager of Astra Graphia Information Technology (AGIT), which offers consultancy to anticipate the Y2K bug. AGIT is a unit of the widely diversified Astra business group.

"But now it's too late. There is too little time left to prepare for the Y2K," he said.

Banu Wimbadi, Y2K coordinator at PT Krakatau Information Technology (KIT), a subsidiary of state-owned Krakatau Steel, said many small and medium enterprises wrongly assumed that only big corporations needed to prepare for the Y2K.

"In fact, the size of a company does not matter at all. All computerized companies need to prepare for the Y2K bug," Banu said.

He said that of the 20 companies which approached KIT in 1997 for consultancy on the Y2K bug, only six of them went ahead with the KIT program, including liquefied natural gas producer PT Arun NGL Co in Aceh and state owned fertilizer producer Kujang in Cikampek, West Java.

"Many companies did not realize the importance of preparing for the Y2K bug. They did not realize that the preparation would be an investment. If they are not prepared, they could lose much money."

No complete data is available regarding which companies have made their systems Y2K compliant.

"Companies affiliated with foreign companies tend to be more prepared than wholly owned local companies," said IBM project manager Gatot Wibisono.

Replacement

Many information technology companies, including multinational corporations, have tried to tap the local business opportunities connected to the Y2K bug over the past three years.

But with 2000 getting closer, not many of them expect any new business.

"Most of our 80 Y2K technicians are now very busy serving our customers, which amount to 130 companies. Maybe we'll stop accepting orders this month or next," Arya said, noting that it was impossible for a new company to run a Y2K preparation program.

AGIT's customers include big corporations in the financial, telecommunications and manufacturing sectors as well as government offices.

According to Arya, it could take up to three years to make the computerized system and equipment of a big corporation Y2K compliant, and cost the corporation up to US$30 million.

Smaller companies with less dependency on computer systems may take less time to carry out the Y2K preparation program, and cost them about $50,000.

The preparation programs are carried out in three phases: assessment and feasibility studies; implementation or remediation phase; and the testing phase.

During the assessment and feasibility study, which may take one year for a big corporation, consultants examine the equipment and the system used by the customers.

During the remediation phase, which may take one year or one and a half years, the companies can either make their equipment Y2K compliant or replace some of it.

During the testing phase, which may take half a year, companies with or without the assistance of consultants test whether their equipment has been made Y2K compliant.

Banu and Arya said companies unprepared for the Y2K have no alternative but to replace all their computerized equipment and systems with new hardware and software which is Y2K compliant.

"Replacing computerized equipment may cost 10 times more than converting it to Y2K compliancy," Arya said.

However, Banu said, several cases indicate that it is cheaper to replace Y2K noncompliant equipment than hire consultants to make it Y2K compliant.