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Topic: Contingency Planning -- Articles

Year 2000 Crisis Management

By William Ulrich

If executives, users, government officials and IT personnel think that the period following New Years 2000 will be business as usual, they could be in for a surprise. In a best case scenario, allegedly compliant systems will encounter bugs, non-IT systems will hit unforeseen glitches, external data flow will experience periodic interruptions and third parties will stumble. A worst case scenario could result in critical system failures, product shortages, massive data corruption, customer departures and organizational chaos. Avoiding a worst case scenario, and riding out minor problems in a best case scenario, requires that organizations establish and deploy a coordinated crisis management strategy.

The computer industry's rocky transition into the next century can be broken into three phases; project management, crisis management and cleanup management. Project management, the phase leading up to the year 2000, prepares systems and third parties for the century rollover. The cleanup phase, which could extend several years into the next century, undoes quick fixes, bad decisions and contingency options implemented during earlier phases. Crisis management, the most critical phase of the century transition, begins on January 1, 2000 and continues until organizations achieve system, third party and data interface stability.

Year 2000 crisis management extends well beyond the concept of correcting system, interface and third party problems. It requires formation of a crisis management team that includes tactical response units, business leaders, third party managers, purchasing executives, legal counsel, hot-line support and communication coordinators. Tactical response units, comprised of IT and business professionals paired by area of responsibility, coordinate hundreds of tactical decisions that could impact customer loyalty, profits, regulatory compliance and legal liability. Tactical response units must be able to make quick decisions without calling for group consensus, and have the wherewithal to escalate strategic decisions to senior executives as needed.

Crisis management teams must plan for high volume end-user change requests, system software and hardware failures, network outages and queries from business units experiencing desktop, embedded or non-IT system failures. They must also plan to respond to external issues that include calls from customers directly impacted by year 2000 problems, regulatory inquiries, third party delays, data contamination, power or telecommunication outages, supplier shortages and broader economic problems. From an enterprise-wide perspective, the crisis management team crafts cross-functional recovery strategies that can be invoked as problems arise. This is required because uncoordinated tactical units may end up working at cross-purposes if activities are not closely monitored by a centralized crisis management function.

Once the team is deployed, which should occur in the second half of 1999, they will help manage application and business unit contingency invocation, interface problem identification and correction, system triage strategies and externally triggered contingency options. Legal representatives on the team must ensure that an audit trail of all correction, prioritization, contingency and triage decisions is kept during this timeframe. Finally, the communications coordinator ensures that customers, stockholders, regulators and third parties stay abreast of the situation as needed.

Contingency plans, which play a vital role in the response component of a crisis management strategy, will need to be tracked and updated as they are invoked. Cross-functional tracking of plans, particularly where it affects more than an isolated business unit or location, should be based on some type of tracking vehicle or database. Ideally, this is the same tool that was used to record and track contingencies as they were developed during the 1999 timeframe.

Finally, the most difficult situation organizations will face during the crisis management window is being forced to shift business strategies to accommodate year 2000 failures. Executives should be ready when called upon to shift strategies in the face of problems. Unfortunately, most project offices and business units that I have dealt with have not yet established crisis management plans. The absence of a crisis management team, schooled in rapid response strategies and empowered by senior management, will result in the breakdown of organizational infrastructures during the early days of the new millennium. Year 2000 crisis management planning should begin soon, before it is too late.

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Last modified: March 8, 2000