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Y2K Readiness Improves - But Not Meeting Estimates

Business Readiness For Y2K Improves – But Progress Has Not Met Estimates

Businesses, local government and essential service sectors in New Zealand are better prepared for Y2K than in February or April this year – but much remains to be done, and slippages have continued.

That is the conclusion from the third survey of business and sectors undertaken by the Y2K Readiness Commission, which calls for additional effort through to the end of 1999.

In individual surveys, businesses and various essential sectors were asked, amongst other things, how advanced they were in identifying, remedying and testing their preparedness for Y2K.

Y2K Readiness Commission Chairman, Basil Logan, said:

“Larger business tend to be better prepared than either medium or smaller businesses, in terms of identifying, fixing and testing their critical functions.

“All large businesses expect to complete work on their own systems this year and one third say that they have already done so. However, some have underestimated the complexity of the remedying and testing process and have had to defer their estimated completion dates until September or later.

”That should send a clear message to all businesses, of any size – if you are not even as advanced as this, you may well need to put in extra effort and should do so from now.

“In any case, everyone needs to maintain their efforts through to the end of the year.”

As part of its help to small-to-medium enterprises (SMEs) the Y2K Readiness Commission mailed some 300,000 detailed practical guides in July and has provided additional information on its website - www.y2k.govt.nz. This is in addition to the public information programme, launched on 21 July.

Basil Logan said:

“SMEs are making steady but not spectacular progress. We wanted to address those, mainly very small but still numerous, businesses that have yet to fully involve themselves in the necessary Y2K planning and preparation.

“There has been a drop – from 20 per cent in April down to 14 per cent in June – in the number of small businesses which have not yet started to address the risk on their computers. But we need to drive this down further and faster.

“Of course, readiness is not just about computers. We are very concerned that around half of SMEs, particularly the smaller ones, do not intend to monitor their suppliers’ progress and 49 per cent of the very smallest businesses believe that they do not need to plan for business continuity.

“All firms should be taking seriously the need to monitor their supply chain risks, to communicate their own progress to others and to recognise a need for business continuity planning.

“Nearly half of businesses employing 1 to 3 people have yet to design a business continuity or work - around plan for their critical business systems. While this is an improvement from February, more needs to be done.

“They are ignoring the real threat of Y2K – the high level of risk from suppliers that businesses rely on. A lack of supplies, due to transportation or ordering delays, could affect their ability to meet orders, on budget and on time.”

A comparison of state sector, public hospitals, local government and large business show that the government sector is now on par with large business. There has been steady progress in dealing with internal risks and in completing business continuity plans.

Major utility sectors, such as water, sewerage, banking, energy and telecommunications remain relatively well advanced in their readiness. The survey reports that local government has a very high level of confidence in its ability and that of others to deliver essential services.

Y2K Readiness Commission Director Clare Pinder said:

“The level of no confidence in essential services reported by all businesses and sectors has fallen significantly.

“However, very small businesses still have relatively low levels of confidence in those services, thus indicating that communication by providers of such services to their customers remains important. We are encouraging sectors to communicate their state of readiness to businesses and households in time for these persons to make their own plans.

“Some sectors, such as banking, have begun their own comprehensive programmes.”


ENDS

New Zealanders Plan To Overcome Y2K Problems

The Y2K Readiness Commission today revealed that there is a significant increase in the number of people who intend to plan, or have planned, to overcome potential Y2K problems.

Y2K Readiness Commission chairman, Mr Basil Logan, said that the signs that New Zealanders were turning awareness of the Y2K problem into plans for action were encouraging.

“59 percent of New Zealanders have or will definitely make plans to prepare - up from 44 percent. Another 14 percent say they may make plans when more information is available. A growing number of people have indicated their intention to plan against possible interruption to power, water, banking, and the availability of food.

“While the research shows a high and growing level of confidence in the continuation of essential services, there appears to be an underlying realisation that these should not be taken for granted.

“Nearly 60 percent of people polled are taking a prudent view of the risks and have planned, or intend to plan, to overcome possible interruption to essential services. What we need to do now is get through to the 14 percent of people who say they want further information before they will plan (down from 21%) and the 27 percent who either won’t or don’t know whether they will (down from 35%).

“The number in both groups is reducing, but we hope to accelerate the trend through the public information campaign which was launched on 21 July 1999.

“While the public increasingly accepts the need to plan, it also appears that they have growing confidence in the ability to maintain essential services or get them fixed and running more quickly.

“Sixty per cent of people believed it would take on average up to five days to fix problems with essential services - up from 52 percent. Thirty three per cent still believed it would take a week or more to restore them - down from 38 percent”

Mr Logan said that 71 percent of people still want to know what help they can get if there is a problem, 58 percent want to know what plans they can make, and 53 percent want to know what the likely effect of Y2K will be on households.

However, the same study also shows growing confidence that the overall effects of Y2K will be minimal. 45 percent (up from 40%) believed that Y2K would have only a minor effect on households, and 32 percent (up from 27%) believed that Y2K would only have a minor impact on the New Zealand economy.

The survey was the second of three designed to monitor the public’s awareness and understanding of the Y2k problem. It was conducted using telephone interviews of a random sample of 1008 people drawn from telephone directories during the period 8-24 June. The margin for error was plus or minus 3.1 percent.

ENDS


Fact Sheet

The Y2K Readiness Commission commissions regular research on the state of readiness by various sectors and surveys public opinion on Y2K issues. This fact sheet summarises the third Business Sector Research and the second Public Opinion Research conducted in June and July this year. Full details are available on the Commission’s website: www.y2k.govt.nz.


Business and Sector Progress Surveys

1,367 telephone interviews were conducted, between1 and 18 June 1999. The response rate was 56 per cent.
The progress for thirteen sectors was measured using paper-based questionnaires.
Previous questionnaires are available on the Commission’s website.

Large Businesses
There are some 2,500 businesses in New Zealand with 50 or more persons.
90 per cent of large businesses expect to have completed all work on managing internal risks arising from their own computers and equipment by September. The remaining 10 per cent expect to complete by the end of the year.
Large businesses continue to move back their completion dates from June to September or later. This trend emerged in the June survey. Large companies seem to have been overly optimistic in their earlier timetables.
Progress by large firms in assessment, remediation and testing has been significant.
13 per cent do not intend to monitor their suppliers’ progress and 14 per cent do not intend to communicate their own progress to customers. These figures are declining only slowly.
9 per cent say they do not need business continuity plans (down from 13 per cent in February).

Small and Medium Enterprises
There are some 259,000 businesses with one to three persons (very small businesses).
50 per cent of very small businesses say they are “ready now”.
14 per cent of the very small businesses using computer and electronic equipment have not yet started managing the risk in their own systems (20 per cent in April). But half of the 14 per cent have identified actions to be undertaken later this year.
About half of very small businesses do not intend to monitor their suppliers’ progress (46 per cent) or communicate their own progress to customers (50 per cent).
49 per cent say they do not need business continuity plans (down from 55 per cent in February).
The Commission is concerned that even firms that state they are “ready now” may not have fully identified their total risk.

State Sector/Public Hospitals/Local Government/Large Business comparison
The Government Sector is now on a par with large business in remediation or avoidance of Y2K issues: testing, regularly communicating with customers and developing business continuity plans.
Those who have have completed their remediation or avoidance are 44 per cent of the State Sector area; 50 per cent of public hospitals, 36 per cent of local government and 44 per cent of large business.
Those saying they are well underway on remediation or avoidance are 51 per cent of State Sector; 50 per cent of public hospitals, 59 per cent of local government and 47 per cent of large businesses.
Progress has been good, except for regular communication with customers, where progress since April has been relatively slight. 57 per cent of public hospitals say they are communicating with their customers, while only 19 per cent of the State Sector can claim the same. Local government claims 28 per cent and large business 25 per cent.

Major Utility Sectors (banking, energy, telecommunications)
Those who have completed their remediation or avoidance are 70 per cent of banking and finance companies; 47 per cent of electricity; 80 per cent of oil fuels; 94 per cent of telecommunications; and 30 per cent of air transport.
Those who are well underway are 20 per cent of banking and finance; 47 per cent of electricity; 20 per cent of oil fuels; 6 per cent of telecommunications and 60 per cent of air transport.


Public Opinion Survey

1,008 telephone interviews were conducted between 8 and 24 June 1999. The response rate was 33 per cent.
Sampling error is + or – 3.1 per cent

Awareness
95 per cent of the public say they are aware of the Y2K problem.
There is increased understanding of what could happen as a result of the Y2K problem (with regard to essential services as well as computers). 54 per cent of New Zealanders are aware power could be affected (up from 33 per cent) and 43 per cent are aware that water and wastewater could be affected (up from 23 per cent).

Confidence
There is a continuing high level of confidence that food and grocery essentials (91 per cent) and utility services will be available in the days after 31 December 1999.
Showing lower levels of confidence than these are banking services (68 per cent), wastewater services (76 per cent), air travel (58 per cent) and government payments (57 per cent) being available.
However, while confidence in waste water supply has declined 5 per cent to 76 percent, confidence in air travel is slightly up (by 2 per cent points) and confidence in both emergency services and in government payments is up by 5 per cent.
More people understand that the Y2K problems may emerge in the days after 1 January 2000 (48 per cent, up 7 per cent) or in the weeks following (37 per cent). This indicates that people are beginning to see Y2K as a possible series of events rather than a single event.

How long might the interruptions last?
Between March/April and June there seems to have been a shift to the view that problems may take less time to fix. Fewer people believe restoration of services will take a week or more to decline.
However, a surprisingly high proportion (between 28 per cent and 39 per cent) still believe that it could take some time to restore particular supplies and services, given that most people’s experience of interruptions to services would be that they are dealt with relatively quickly.
28 per cent believe that food and other grocery essentials could still take a week or more to resolve, but only 9 per cent of people believe there will be a problem; 39 per cent believe that the banking system may also take a week or more to restore in the event of interruption.

Household planning
59 per cent (up from 44 per cent) have made or will make plans to deal with the effects of Y2K problems.
There has been a drop in the number of people who do not intend to make plans (down from 31 per cent to 24 percent). Half of those who don’t intend to make plans believe there may not be a problem. Another third believe the problem is too small to be worth worrying about.
Food and essential grocery supplies (81 per cent) rate as the key events that will be planned for; followed by problems with the banking system (76 per cent); interruptions to the water supply (75 per cent) and interruptions to the power supply (73 per cent).

What people want to know
The top five things people want to know are:
what help people can get if there is a problem (71 per cent)
what people can do to plan for Y2K (58 per cent)
what may happen in their household (53 per cent)
who will not be Y2K ready before 2000 (55 per cent)
what may happen in New Zealand as a whole (51 per cent).

Expected impact on households

45 per cent (up from 40 per cent) of the survey felt that Y2K would have only a minor impact on their households.
8 per cent felt that it may have a major impact upon their household.
33 per cent felt that it may have a moderate impact.
11 per cent felt that it would have no impact.

Expected impact upon the New Zealand economy
32 per cent (up from 27 per cent) felt that the Y2K problem will have only a minor impact on the New Zealand economy.
21 per cent (down from 25 per cent) felt the Y2K problem will have a major impact on New Zealand as a whole.
34 per cent felt that it will have a moderate impact on New Zealand as a whole.
6 per cent felt that it would have no impact on New Zealand.

ENDS

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