Y2K: Businesses not prepared for disaster

By Chris Barton

Despite the experience of last year's Auckland CBD power crisis, many businesses do not appear to know what a business continuity plan is.

The first Y2K Readiness Commission survey released yesterday shows a staggering 50 per cent of businesses reported that they did not need such a plan. It coincides with the release of a damning report by the Auditor-General on the state of the public sector's Y2K readiness

Commission special adviser John Good said every business needed a continuity plan, not just for the millennium bug, but for other emergencies such as natural disasters.

The perplexing result has the commission wondering whether the term is too technical for businesses to understand and whether it should change the wording of its survey questions to "emergency backup or disaster recovery plan."

While the lack of business continuity planning is most pronounced in the small to medium business (1-50 employees) sector, there are concerns in large organisations and local government too:

* only 22 per cent of large businesses and 16 per cent of local government organisations have continuity plans in place. The rest are either working on or intending to work on their plans.

* 7 per cent of large businesses and 8 per cent of local bodies do not intend to test their Y2K plans. The rest have either done some testing and found more work to done or are have yet to test.

The baseline telephone survey for Y2K readiness among businesses and local government organisations was conducted in February and will be repeated every two months until November. The commission also plans to survey the public on the Y2K risk.

Mr Good was also concerned that 45 per cent of businesses had no intention of either communicating with, or monitoring, their customers and suppliers on year-2000 progress.

The survey also shows:

* only 33 per cent of businesses have completed the assessment phase of their Y2K problems and 21 per cent have not even started.

* only 24 per cent have completed their Y2K fixes, while 27 per cent have yet to start.

Mr Good said the lack of progress was mostly in the small to medium businesses.

Because of their size, there was still time to fix the problem.

The extra work required in locating and assessing the risk associated with date-aware "embedded chips" used in machinery other than computers had also slowed progress in large organisations.

The survey found 21 per cent of large businesses and 29 per cent of local bodies had already experienced year 2000 problems but most had minimal impact. Only between 5-6 per cent in these sectors believe the century-date change problem would significantly disrupt their organisations.

A detailed set of questions to local bodies on the Y2K readiness of water and wastewater services indicates a significant reliance on written assurances from equipment suppliers for compliance rather than through testing of the equipment.