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Topic: Contingency Planning -- Articles

Year 2000 Business Continuity Management

By William M. Ulrich

Executives have spent millions of dollars to identify, upgrade and test mainframe, distributed and embedded computer systems in the hopes of correcting their year 2000 problem. But there are no guarantees that in-house systems or those of key suppliers will work correctly in every instance. Risks are particularly acute when mission critical business functions rely on a variety of complex computer systems, data interfaces or a large supplier chain. Achieving this realization is where the remediation cycle ends and where business continuity planning begins.

Business continuity planning, the strategic piece of a contingency plan, shifts ownership of the year 2000 problem away from technical teams and into the hands of the business community. Business analysts, managers and executives should consider the millennium transition window as a risk-laden timeframe that could destabilize mission critical business functions. Front-line personnel and management teams can address many of these issues, but only if they systematically create backup plans for key areas across the enterprise.

Business continuity planning requires a level of business unit mobilization that has not been fully embraced by many management teams. The companies that will navigate the year 2000 challenge successfully are those that have fully engaged the business community in planning for the year 2000. This has consistently been the most difficult stumbling block facing contingency planners. Business users typically find it difficult to buy into the concept that they must address the year 2000 problem when IT departments have spent millions of dollars over the past several years correcting it.

Publicly traded companies find motivation in the fact that the Securities and Exchange Commission (SEC) has mandated the need for companies to create year 2000 contingency plans. With boards, CEOs and CFOs on the hook for problems, executives are gradually motivating business units into action. Other organizations should consider that creating backup plans for failures related to technology failures, data corruption and supplier shortages makes good sense if they want to stay profitable. The threat of litigation should eventually motivate other entities. Maybe this is why many government agencies are seeking year 2000-damage immunity.

Recent observations paint both a comforting, yet frightening, set of scenarios as to how businesses are addressing business continuity planning. In some cases, continuity planning is second nature to an organization. Utilities, energy companies, water districts, manufacturers, financial firms, municipalities, defense agencies and others are preparing for problems. Hospitals, telecommunication providers and power companies, for example, are adding backup generator capacity. Pharmaceutical and manufacturing firms are increasing component and spare part inventories to address possible shortages. Numerous companies and government agencies are training personnel to perform manual functions in case of system failures.

Viewing these efforts in aggregate raises new concerns. For example, a number of companies are pushing suppliers to deliver additional products late in 1999. The supply cannot, in most cases, keep up with the demand. More lead-time is required if companies wish to stockpile. Backup communication devices are being added to key business units, but there may not be technology shortages at some point. Other companies are hiring trucks to bring in water, generator fuel and other supplies, but transportation firms are booking up. Personnel limitations are just now coming to light. Will single parents be willing to work on New Years Eve weekend?

One thing is becoming increasing clear. Organizations that have launched and deployed proactive business continuity plans will likely consume resources to the detriment of other companies that got a late start. In other words, if you are thinking about business continuity planning, your best bet is to get moving now.

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Last modified: March 8, 2000