Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Y2k: Fourth Business and Sector Progress Surveys

NATIONAL READINESS
Fourth Business and Sector Progress Surveys

Introduction

The fourth set of surveys was carried out between 2 and 13 August 1999 on an anonymous basis. The survey methods were the same as those used for the first three apart from these differences:

 a fifth sub-sample comprising very large firms of 500 or more persons was added to the business telephone-based survey;
 paper-based sector surveys were added for samples of General Practitioners and Truck Operators.

The business survey comprised 1383 completed interviews and the response rate was 63%. 15 sector surveys were carried out.

Additional questions were added to those used in the third survey in order to:

 measure progress towards readiness with the computers and equipment essential for business survival as well as progress with all of the items used;
 explore the reasons why firms state that they do not need a business continuity plan;
 examine in more detail the expected completion dates for all Y2K preparations and the reasons for any slippage which had been experienced in recent months.

Readiness of Business Generally

Large and Very Large Business

Previous surveys treated all firms with 50 or more persons as a single survey sample referred to as "large". In the August survey, firms with 500 or more persons were separated out into a separate "very large" category.

Forward progress has continued and firms continue to anticipate completing all Y2K preparations before the end of 1999. However slippage is also apparent. In June one quarter of firms anticipated completing in the last quarter of the year; in August the proportion was one half. 18% of very large firms expect to complete all of their preparations in December.

Very large firms lead all others in the extent to which they are regularly monitoring their suppliers’ progress and communicating their own progress to customers:


Size of firm::::::% regularly monitoring suppliers::::::% regularly communicating own progress to customers::::::% with all computers "ready now"
1 – 3:::::: 11::::::6::::::51
4 – 9::::::18::::::11::::::53
10 – 49::::::17::::::9::::::49
50 – 499::::::25::::::21::::::34
500 +::::::52::::::32::::::28


The proportion of firms stating that their computers are "ready now" has not changed significantly over the two months.

SMEs

The proportion of very small firms (1 to 3 persons) which have not yet started on managing the risk in their own computers and equipment is now down to 9%. Approximately one half of all SMEs state that their computers and equipment are ready now, with no significant change from the June survey. However the proportion of them anticipating that they will not be ready by the end of 1999 is now down to 3% in the August survey down from 9% in June.

The proportion of SMEs who state that they do not need a business continuity plan has decreased only slightly despite the Commission's second direct mail brochure focusing attention on this area of need.

::::::Do not need continuity plans
::::::1 - 3::::::4 - 9::::::10 - 49
June 1999 %::::::49::::::35::::::23
August 1999 %::::::43 ::::::33::::::25

A number of reasons are advanced by SMEs for this as the following table, in respect of the smallest firms, shows:

Reason for not needing a business continuity plan::::::% of 1 - 3 person firms
The problem will only affect us for a very short time::::::41
We can manage any problems that arise::::::23
The only problem we expect will be with services about which we can do nothing::::::20
Any problems will be sorted out by the time we come back from the Christmas break::::::18
We won't know what we can do until it happens::::::18

In many cases these reasons may not be soundly based though the individual business concerned is best placed to make such a judgement. It may be that, with less than four months to go, further use of Commission resources on the SME sector may not be warranted, beyond urging firms to make use of the advice in the "Plan Now To B Y2K Wise" brochure sent to all SMEs recently.

When compared with other countries that are considered to be relatively advanced in their management of Y2K, New Zealand's SME sector has made good progress. Taking into account the proportion of firms which have no computers or equipment of their own, the survey results suggest that around 16% of New Zealand SMEs have not yet started to address their Y2K risks in any way. These are mainly micro firms in the 1 to 3 person range.

This figure contrasts with the Australian Bureau of Statistics’ figures for June 1999 indicating that around 40% of Australian businesses intended to do nothing. Action 2000 from the United Kingdom report, also in June, that 54% of their micro businesses (1 to 9 persons) were taking "appropriate action".

With respect to progress in management of external risks and business continuity plans New Zealand 1 to 3 and United Kingdom 1 to 9 person micro businesses were roughly on a par in June.

State Sector / Public Hospitals / Local Government / Large Business

In this analysis, the August survey results for the three government sectors are compared with the combined large and very large samples merged into one sector to enable comparison with the June survey results. The June figures are shown in parenthesis:

::::::Remediation or avoidance - all computers and equipment::::::Testing - all computers and equipment::::::Regularly Communicating to Customers::::::Business Continuity Plans
Sector::::::% Completed::::::% Completed::::::%::::::% Completed
State Sector::::::54 (44)::::::27 (21)::::::19 (19)::::::35 (23)
Public Hospitals::::::58 (50)::::::32 (14)::::::42 (57)::::::74 (29)
Local Govt::::::56 (36)::::::32 (10)::::::39 (28)::::::42 (28)
Large Business
(50 + persons)::::::44 (44)::::::25 (28)::::::23 (25)::::::30 (26)

The government sectors have now overtaken large business in almost every particular.

Major Utility Sectors (Banking, Energy, Telecommunications etc)

::::::Remediation or avoidance - essential computers and equipment *::::::Testing - essential computers and equipment *
::::::Regularly Communicating to Customers::::::Business Continuity Plans
Sector::::::% Completed::::::% Completed::::::%::::::% Completed
Banking and Finance::::::92 (70)::::::77 (60)::::::92 (80)::::::85 (70)
Electricity::::::67 (47)::::::43 (37)::::::30 (30)::::::30 (14)
Oil Fuels::::::86 (80)::::::57 (40)::::::86 (80)::::::71 (0)
Tele-communications::::::96 (94)::::::86 (81)::::::100 (100)::::::85 (75)
Air Transport::::::61 (30)::::::66 (35)::::::38 (50)::::::17 (10)
All Large Business (50 + persons)::::::53 (44)::::::25 (28)::::::23 (25)::::::30 (26)

*::::::The August figures refer to computer systems and equipment essential for business continuity; the June figures (in parenthesis) refer to all systems.

The utility sectors have made substantial progress towards readiness in their essential systems and are substantially ahead of large business in general. Their anticipated dates for completion of all preparations are likewise earlier.

Percentage completing in the last quarter of 1999:
::::::
::::::% completing in last quarter 1999
Banking and Finance::::::16
Electricity::::::23
Oil Fuels::::::28
Telecommunications::::::2
Air Transport::::::39
Large Business (50 + persons)::::::50

Slippage

The range of slippage being experienced across all businesses is shown by these figures: 20% of 1 to 3 and 49% of 500+ person businesses report that their preparations will be completed later than was planned a few months earlier. Across all businesses the reasons advanced for the slippage by those who had experienced it were:

Reason for slippage::::::%
Becoming Y2K ready is more difficult than expected::::::36
Critical HR not available when needed::::::20
Upgrade equipment or software not available when needed::::::15
Other priorities::::::10
Waiting on others for information::::::9
It is the nature of the Y2K problem that you have to keep working at it until December and beyond::::::8
Procrastination::::::7
Lack of time::::::5
Able to fit non-Y2K work into the schedule::::::5
All other reasons ::::::17
Don't know::::::2

Note: Multiple answers were obtained for this question so the percentages do not add up to 100%.

The reasons advanced for slippage suggest that in the bulk of cases it is real and not due either to an improved view of good practice or to deliberate delays resulting from better-than-expected progress. On the other hand, while 22% of all businesses have experienced slippage, 7% expect to complete earlier than they expected a few months ago and 60% expect to complete on time as planned. Only 4% of all firms and 2% of 500+ person firms do not expect to be ready before the end of this year.

Confidence in essential services

Businesses were again asked to express their levels of confidence in the essential services on which they depend. Overall confidence levels remain high. Of particular interest, however, in the context of Y2K are the levels of "no confidence" because there is the danger that these could translate into negative actions such as panic buying or withdrawals of funds.

Levels of "no confidence" in essential services are shown below:

Essential service::::::Level of "no confidence" among 1 to 3 person firms - 32% of these have monitored their suppliers::::::Level of "no confidence" among 500+ person firms - 93% of these have monitored their suppliers
Electricity::::::7::::::0
Gas::::::7::::::0
Oil fuels::::::7::::::2
Water::::::8::::::7
Sewerage::::::10::::::7
Tele-communications::::::12::::::5
Goods and passenger transport::::::8::::::2
Banking and finance::::::15::::::2

The levels of no confidence among micro businesses are slightly lower or the same as those recorded in June. The lower levels among very large business can be taken to reflect their more thorough assessment of the state of readiness of their suppliers.


This view is also supported by percentages of "no confidence" and "have monitored suppliers" for selected sectors presented below:

Sector expressing level of "no confidence"::::::
%
who have monitored their suppliers ::::::Electricity::::::Gas::::::Oil::::::Water::::::Sewerage::::::Telecommunications::::::Transport::::::Banking
Electricity::::::94::::::0::::::0::::::0::::::3::::::3::::::3::::::4::::::0
Gas::::::100::::::0::::::0::::::0::::::0::::::0::::::0::::::0::::::0
Oil::::::100::::::0::::::0::::::0::::::0::::::0::::::0::::::0::::::0
Water/Sewerage
(Local government)::::::97::::::2::::::0::::::0::::::0::::::0::::::5::::::0::::::0
Telecommunications::::::100::::::0::::::0::::::0::::::0::::::0::::::0::::::0::::::0
Transport - Civil aviation::::::83::::::0::::::0::::::0::::::0::::::0::::::0::::::0::::::0
Transport – Land::::::90::::::5::::::0::::::0::::::0::::::0::::::0::::::0::::::0
Banking::::::100::::::0::::::0::::::0::::::0::::::0::::::0::::::0::::::0
1 to 3::::::32::::::7::::::7::::::7::::::8::::::10::::::12::::::8::::::15
500+::::::93::::::0::::::0::::::2::::::7::::::7::::::5::::::2::::::2
General Practitioners::::::36::::::10::::::4::::::14::::::12::::::12::::::10::::::10::::::10

The essential service sectors express extremely low levels of "no confidence" in one another associated with an even higher degree of monitoring of their suppliers' progress than very large businesses. It would be very desirable if this level of informed confidence could be transferred to the general public and small businesses.

General Practitioners

It is noteworthy that General Practitioners, who were included as a sector for the first time in this survey, are exhibiting similar rates of progress to small businesses in general. This is evidenced in the table above by their relatively high levels of no confidence in essential services combined with their low level of monitoring of their suppliers. The Gartner Group noted in a recent report (Year 2000 World Status: The Final Countdown) that medical practices comprised one of the sectors which was least advanced world-wide, in managing Y2K risk. The Ministry of Health has taken initiatives already to assist GP practices to manage their Y2K risks in time.

Progress on Critical Systems

This survey distinguished between progress with managing Y2K risk on critical computers and equipment as opposed to managing risk on all of those items, regardless of their significance to the business. The responses showed an interesting result, across the board, over business and sectors that progress taking all items into account is approximately 5% behind that achieved with the critical ones. Thus completion of testing all computers and equipment trails completion of testing for critical items in large business by 8% (25% as opposed to 33%) and in the electricity sector by 4% (43% as opposed to 47%).

John Good ::::::::::::::::::::::::::::::::::::::::::16 September 1999
Special Adviser::::::::::::::::::::::::::::::::::::::::::


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news