AdSlot 1 (Leaderboard)

IT STRATEGY REVIEW – E-commerce: reach out and sell to someone

The Millennium bug will not cause a global catastrophe or economic downturn.

This is the relatively upbeat conclusion of research group IDC, which is hosting its annual European Forum for IT managers and vendors this week.

“Whilst Year 2000 is an impressive project…it does not suggest a catastrophic problem,” stated Thomas Oleson, research director at IDC.

The conclusion contrasts with reports from other organisations, such as analyst company Gartner Group or chief economist of Deutsche Bank, Ed Yardeni, who has proclaimed his strong belief that the Y2K bug could cause economic recession.

Oleson was scathing about such warnings: “Ed Yardeni warns of an 80 per cent chance of recession and yet when you look at the fact that Y2K will require only 3.4 per cent of total IT spending in the five years up to the Millennium, we have a good reason for asking him, ‘where are you coming from?'”

Risk stemmed as much from a crisis of confidence noted fellow analyst Puni Rajah. She predicted that marketing and public relations spending would rise significantly next year as companies seek to reassure customers and partners that their business would run as normal through the Millennium.

According to IDC’s research, total expenditure on Y2K in Europe will reach $98 billion, of which $36 billion will be spent during 1998, the peak year. The US total would be $122 billion, with spend around the globe to reach $296 billion.

More than one in five US companies had completed their compliance projects earlier this year according to the figures, although one in three had yet to begin work.

Oleson estimated the UK was about six months behind overall on projects, though catching ground. Europe as a whole was lagging a little further, especially as European companies had made the Euro conversion a higher priority.

However Oleson warned that his research showed an average of 2.5 per cent of applications would still contain errors, creating some problems requiring remedial action in 2000 and potentially damaging businesses affected.

Companies taking the problem very seriously included multinational conglomerate Coca Cola he said, which had sanctioned only two major IT projects to go ahead this year – the worldwide rollout of SAP and the Year 2000 conversion process.

Related reading