Thursday January 15 8:52 AM PST
Legal issues plague Year 2000 management
By Robert Lemos
SANTA CLARA, CALIF. - The year 2000 software bug poses a host of
technical problems for the software industry, but resolving the legal
issues will be just as difficult, an expert said on Wednesday.
"The legal consequences could be catastrophic for many companies," said
Robert Feldman, a partner at law firm Wilson, Sonsini, Goodrich &
Rosati. Feldman spoke to a gathering of attorneys and corporate counsels
at the Software Publishers Association's Advanced Corporate Counsel
Institute.
Attendees worried whether companies shackled with the costs of adapting
software to work in the year 2000 would sue original software makers in
an effort to recoup the costs of upgrading their systems.
According to Gartner Group Inc. estimates, a medium-sized company will
spend about $4 million to update its systems. That doesn't include legal
fees. Issues with explicit or implied warranties, product liability and
economic loss could swamp the courts as Year 2000 anxiety turns to fear.
"Hopefully, we won't be seeing too many claims," said Feldman. "The
point is to get the problem fixed."
The Year 2000 problem originates with a programming shortcut used early
in computing history, when systems had much less memory than they do
today. To save memory, programmers cut dates from an eight to a
six-digit number, so that January 1, 2000, for example, would become
000101. Unfortunately, the software takes this to mean January 1, 1900.
The big deal with this is that any application that needs a date to
function will be confused when the actual year 2000 rolls around.
Patients admitted to hospitals will find that they have not yet been
born, while credit card transactions might be refused, since the
computer may find the card had not yet been issued.
The scope of the Year 2000 bug is enormous. According to Feldman, fixing
the software errors could require $50 billion to $75 billion in the
United States alone.
"What's unusual about this problem is that it has to be solved," he
said. "You can't sit around and do nothing."
But many companies are only slowly looking for a solution. In an attempt
to kick Corporate America in the keister, the legal staff at the
Security and Exchange Commission issued a missive this week requesting
that companies outline their Year 2000 efforts within this year's annual
report.
While firms do not have to comply with the request, Feldman believed the
letter would bring the issue to the forefront. "The SEC changed the
playing field," said the attorney, stating that management could no
longer ignore the issue.
In 1997, only 60 of the more than 13,000 public companies had Year 2000
disclosures in their annual reports.
Copyright ) 1998 ZDNet. All rights reserved. Reproduction in whole or in
part in any form or medium without express written permission of ZDNet
is prohibited. ZDNet and the ZDNet logo are trademarks of Ziff-Davis
Publishing Company
---
________________________________________________________________________
It's not safe to assume you won't have a problem with year 2000
Copyright ) 1998 Nando.net
Copyright ) 1998 Scripps Howard
(January 15, 1998 02:01 a.m. EST http://www.nando.net) - They may not
run mainframe computers with millions of lines of COBOL code that must
be repaired at $1 a line. But small businesses face Year 2000 computer
troubles of their own.
The problems may lurk unnoticed in data stored in mass market software
that itself will be able to handle the transition to the next century
without major incident. And that may be encouraging a dangerous sense of
complacency.
"It's very bad to assume anything," says Kate Kaiser, a consultant on
the issue who is working with a consulting firm called GIGA Information
Group while on leave from Marquette University, where she is an
information technology professor.
Moreover, some off-the-shelf software packages purchased by smaller
companies over the years may have been altered by independent contract
programmers they hired in the past to customize some aspect of a
standard business software program.
"Very few packages can be run out of a box," says Tom Piehler, who
oversees the Wisconsin operations of Interactive Business Systems, a
consulting firm specializing in management information systems.
"We've run into clients who aren't aware that changes were made. And, in
some cases, there is no documentation to be found on exactly what was
done."
Even if nothing has been tampered with, there can be problems.
A lot of small companies depend on basic accounting software such as
Intuit's QuickBooks or Peachtree Software's Complete Accounting to keep
their business accounts and ledgers.
How will such applications work two years from now?
Consider this fact: Expanding all existing dates from two-digit years to
four-digit years is considered the most reliable way to deal with the
Year 2000 problem.
Four-digit years eliminate the possibility that a computer can
misinterpret what century a date belongs in after a computer's internal
clock rolls over into the new century on Jan. 1, 2000.
As surprising as it may seem, there is no way to enter four-digit years
into QuickBooks for Windows and Macintosh, according to materials the
company supplied in answer to requests for comment about Year 2000
compliance.
The software only recognizes the years 1928 through 2027. And while this
avoids any confusion about the correct century on any date during that
period, this approach is not without its shortcomings.
One specific problem with a fixed time frame that spans the millennium,
according to Lucinda Powers, a certified public accountant in the
Milwaukee office of Coopers and Lybrand, is the inability to have the
software track depreciation on a building for 39 years. If you try it,
it bumps into a wall in 2027.
"A lot of small businesses own buildings," she points out.
For another popular personal finance program, Quicken 98, Intuit
recently switched the way the software interprets the century for
two-digit years. It reversed a long-standing practice of interpreting
12/31/03 as Dec. 31, 1903, and 12/31/03 as Dec. 31, 2003. Now it is the
exact opposite.
All two-digit years between 00 and 27 are affected. Will imported data
need to be changed?
No, says an Intuit spokeswoman. The data should convert automatically.
Perhaps the most perplexing packaged software is also the most pervasive
-- Microsoft Office, which has spreadsheet, database and word processing
applications linked together.
The surprise here is that each element in the suite of software products
takes a slightly different approach to Year 2000 issues. Still,
Microsoft defends its Office suite as Year 2000 "ready."
"They won't say 'compliant' because that means something else," says
Kaiser. "Office 97 can have four-digit years, but if you bring in a
spreadsheet that is two-digits, you have to add the century. Microsoft
training manuals don't tell you how to do it.
"Most people are dealing with archived data. Even if you buy something
new (that is Year 2000 compliant), you're not starting your business
that day and you are going to have to interpret old data."
In a memo titled "Talking Points on the Year 2000 Issue," Tamarie Ellis
of Microsoft concedes that point, saying the software giant recommends
that customers "convert all years stored as two digits to four digits
and confirm the accuracy of the conversion."
In other words, your software is not going to do this for you
automatically now or at any time before 1/1/2000. There is no "silver
bullet" solution for small businesses operating with PC software. The
expectation that the situation will resolve itself is mistaken, say
consultants.
"A single technology provider, even one as well-prepared for the Year
2000 as Microsoft, cannot solve all issues related to the transition to
the Year 2000," according to the Ellis memo.
While Microsoft products store dates as four-digit years (even when only
two digits show) and are "designed with the ability to handle four-digit
dates well into the next century," the company will not warrant that its
products are Year 2000 "compliant."
The term "compliant" can only be used if a set of specific international
standards for the issue are met.
"The real Year 2000 readiness issues are more about testing, good
practices and user education than product warranty," the Microsoft memo
states. "Warranties specific to the Year 2000 readiness are not
appropriate, given the true nature of Year 2000 issues."
Even if Microsoft did have its act completely together, the experts say
it could not control how other software developers' products interact
with Microsoft applications.
Data can be contaminated in the modern desktop from one manufacturer's
application to another when information is shared.
"People have to know their own data and know how it is set up," says
Kaiser. "If you don't compute with the date, you don't have to worry
about it. But invoices, for example, have tons of dates."
Ellis' memo states:
"Since there is no industry-wide standard on how to interpret two-digit
year shortcuts, some PC applications in use today may interpret a
two-digit year date differently than the user needs.
"Relative to the severity and expense of the mainframe problem, this is
a minor issue."
Still, it must be dealt with. One place to begin on any personal
computer running Microsoft Windows 95 is to go to the control panel and
set the "short date style" from a two-digit (yy) format to a four-digit
(yyyy) format.
This will enable the user to see how present software is interpreting
the two-digit years it has stored.
The advice applies to desktop PCs used by larger corporations as well.
"Individual users create their own spreadsheets to compute data to be
entered into mainframe programs," Kaiser points out. "You can get
contaminated stuff into mainframes that way.
"If you set up your own spreadsheets, only you know what to do. What do
those dates do to those balances? Nobody can know your situation and
what you do with it."
Further complicating the matter are changes that have been made behind
the scenes in various versions of applications.
For example, Microsoft Access 97 interprets a manually entered two-digit
year from 00 to 29 as a short-cut representing the years 2000 to 2029.
Access 95 and earlier versions, on the other hand, interpret those
shortcuts as representing the year 1900 to 1929.
In versions 4, 5, and 7 of Microsoft Excel, "00" to "19" are interpreted
as 21st century dates. The newer Excel 97 increases the post-millennium
window on the two-digit years by 10 from "00" to "29."
Kaiser, for one, is critical of the patchwork approach.
"Microsoft could make it compliant," she says. "Probably in '99 they'll
come out with one that will be fine. The biggest thing they could do (in
the meantime) is not act like it's not a problem."
By DOUGLAS ARMSTRONG, Milwaukee Journal Sentinel
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