Y2K: Apocalypse now less likely than hurricane

By Chris Barton

Individuals should prepare for a few days of localised failures of services and infrastructure rather than an apocalypse.

That's the advice of industry analysts Gartner Group regarding the looming impact of the year 2000 electronic date change problem.

The focus of the group's "Year 2000 Risk Assessment and Planning for Individuals" report published at the end of October last year is unusual because it concentrates on what individuals might do rather than the likely impact on businesses and economies.

The good news, as Gartner sees it, is that while there will be failures, 90 per cent of them will be fixed within three days - meaning there's no need for "a bomb shelter mentality". The firm suggests getting ready for the new millennium should be like "preparing for a storm that will last less than a week."

In Gartner's view that means having "at least two weeks' salary in cash and up to five days' contingency supplies of key consumable materials (for example, medication, fuel and food)."

While the research findings seem slanted towards a United States market, Gartner bases its advice on a worldwide survey of enterprises and country government agencies covering some 15,000 enterprises in 87 countries.

The alarming news for New Zealand in the survey is that it sits well behind the leaders - Australia, Belgium, Canada, the Netherlands, Sweden and the United States - in the preparedness stakes.

Gartner points out that in most cases its very difficult for "a non-US person" to meaningfully asses the risk posed by such things as infrastructure and financial services. That's because few countries "have as rigorous reporting requirements" as the US Securities and Exchange Commission and because insurance and utility companies rarely give "specific responses to individuals".

Consequently, Gartner says, all one can do is read what is published and take a "conservative position" about the risk. It advises individuals to make a personal inventory - eg, power, water, phone, etc - and then estimate the number of days that are sustainable without the service or product. Individuals can then work out their own contingency plans - stock jugs and bottled water, buy extra food, fill petrol tank, get cash, etc.

Gartner also advises asking a lot of questions such as: whether your supermarket has a contingency plan if its suppliers have a delivery problem; or what your bank will do if its computers have failures; or whether your home security system will still work in 2000.

Carefully check your insurance policies for year 2000 exclusion clauses, too.

The survey also makes specific mention of banks. It raises the concern that late in December 1999 a newspaper might publish an article saying either a specific bank or the country's whole banking system was not year 2000 compliant - a scenario that could lead to a major withdrawal of deposits. Gartner believes it's plausible that around December 1999 and January 2000 some central banks may issue withdrawal restrictions or banks may impose a partial "freezing" of some accounts.

The survey sees the biggest risk coming from standing orders and direct debits - as well as from the potential miscalculation of interest on loans and deposits. It advises individuals to keep records of their bank transactions such as automatic payments. It also advises people to scrutinise bill payments where interest calculations are involved. But the report stresses too that any effects will be relatively short term and that withdrawal of funds or liquidating investments is not warranted.

For those concerned about risk to their investments, Gartner advises to regularly review disclosures about the year 2000 status of the company you invest with and to switch to a "safer" investment if you are unhappy with its compliance progress.

Overall, Gartner sees two major risks for individuals:

* being employed by an organisation that because of poor year 2000 preparation suffers significant damage that jeopardises future employment;

* being a participant in panic actions rather than actual failures - which Gartner predicts will be "less than feared by most individuals".