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IP: Y2K: 316,862 Reasons Why FedReserve Won't Make It





From: [email protected]
Subject: IP: Y2K: 316,862 Reasons Why FedReserve Won't Make It
Date: Sat, 12 Sep 1998 22:24:39 -0500
To: [email protected]

North's Comments about Article Below:

 In June, 1998, a pair of experts -- one is a y2k optimist -- produced a
report on the likelihood of system-wide failures based on the number of
external exchanges of data an organization has. It is called the
Beach/Oleson Pain Index. (Oleson is the optimist; Beach edits CIO
MAGAZINE.) BUSINESS TODAY reported: 

 "The Beach/Oleson Pain Index illustrates how the Y2K software glitch is
further compounded by connectivity to external organizations, such as
suppliers, customers, banks and other business partners." 

 There is a 10.4% likelihood of catastrophic failure for any organization
with over 1,000 external connections. It is only 0.5% for 50 connections,
1.1% for 100, 5.4% for 500. 

 The Federal Reserve System, the most important of all central banks, has
316,862. 

 This is from a July 1, 1998 report of the General Accounting Office of the
U.S. Congress. 

 The report outlines what every organization must do to protect itself from
importing noncompliant data. This list is long, and the task is gigantic.
Congressional committees should insist on receiving detailed quarterly
progress reports on these procedures from the Federal Reserve. Of course,
no elected official would be so bold or so impolite as to ask, let alone
demand. To ask such questions, the questioner would have to assume that
Congress has effective authority over the Federal Reserve, as the law says.
No Congressman who has served over one term is so naive as to believe that. 

 * * * * * * * * * 

 Federal agencies reported that they have a total of almost 500,000 data
exchanges with other federal agencies, states, local governments, and the
private sector for their mission-critical systems. Almost 90 percent of the
exchanges were reported by the Federal Reserve and the Department of
Housing and Urban Development (HUD) which reported having 316,862 and
133,567, respectively. The Federal Reserve exchanges data with federal
agencies and the private sector using software it provides to these
entities. . . . 

 As part of their Year 2000 correction efforts, organizations must identify
the date formats used in their data exchanges, develop a strategy for
dealing with exchanges that do not use 4-digit year formats, and implement
the strategy. These efforts generally involve the following steps. 

 -- Assess information systems to identify data exchanges that are not Year
2000 compliant. 

 -- Contact the exchange partner and reach agreement on the date format to
be used in the exchange. 

 -- Determine if data bridges and filters are needed. 

 -- Determine if validation processes are needed for incoming data. 

 -- Set dates for testing and implementing new exchange formats. 

 -- Develop and test bridges and filters to handle nonconforming data. 

 -- Develop contingency plans and procedures for data exchanges and
incorporate into overall agency contingency plans. 

 -- Implement the validation process for incoming data. 

 -- Test and implement new exchange formats. 

 The testing and implementation of new data exchanges must be closely
coordinated with exchange partners to be completed effectively. In addition
to an agency testing its data exchange software, effective testing involves
end-to-end testing--initiation of the exchange by the sending computer,
transmission through intermediate communications software and hardware, and
receipt and acceptance by receiving computer(s), thus completing the
exchange process. . . . 

 The Federal Reserve has 2-digit and 4-digit year formats in its data
exchanges. It plans to use 4-digit formats for all exchanges in the future,
but will continue using the 2-digit year format for some exchanges and have
exchange partners bridge to these if necessary. Federal Reserve's Year 2000
officials estimated that 20 percent of their data exchanges have 2-digit
year formats. They also told us that they have not set a target date for
the conversion to 4-digit year formats. . . .
----------------------------------
Source:  Business Today
http://www.businesstoday.com/techpages/y2kindex03.htm

BT EXCLUSIVE: Local researchers predict Y2K pain 

Wednesday, June 3, 1998

by Bill Burke/BusinessToday staff 

A team of technology researchers has come up with an index that they say
can tell a business just how bad its Year 2000 computer problem is going to
be.

The "Beach/Oleson Pain Index" is a chart of Y2K probabilities and
predictions based on a formula developed by team leaders Gary Beach,
publisher of CIO magazine, and International Data Corp. analyst Tom Oleson.

The index determines the "degree of pain" companies are likely to
experience when the Millennium Bug strikes.

The Beach/Oleson Pain Index illustrates how the Y2K software glitch is
further compounded by connectivity to external organizations, such as
suppliers, customers, banks and other business partners.

The pair will unveil the index today at a Year 2000 conference in Omaha.

In the end, Beach says, no one is going to make it through the Millennium
threshold untouched.

"Realistically, no connected company can expect to survive the Year 2000
unscathed," Beach said. 

He said the formula answers the fifty-thousand dollar question: 'Just how
bad is it going to be?'

The index works by taking a company's number of connected applications and
plugging that figure into the index. 

"A company can determine the severity of its Year 2000 problem and create
an appropriate contingency plan," Beach said.

The index can help companies plan for the deadline, and develop contingency
plans, say the designers.

"Companies implementing various Year 2000 compliance projects must come to
the realization that the Year 2000 problem is not 100 percent solvable,"
Oleson said.

The index uses the number of applications a company has connected to
external partners, vendors and customers to determine the severity of the
Y2K situation. The probability of experiencing a Year 2000 problem is
broken down into four degrees of severity: Annoying; Disruptive; Business
Critical and Catastrophic. 

                "0">

                  Number of
                 Connected
                 Applications
                            Probability:
                            Catastrophic
                                        Probability:
                                        Business
                                        Critical
                                                   Probability:
                                                   Disruptive
                                                              Probability:
                                                              Annoying
                 5
                             0.1%
                                        1.0%
                                                   3.7%
                                                              7.4%
                 10
                            0.1%
                                        2.1%
                                                   7.3%
                                                              14.3%
                 20 
                            0.2%
                                        4.1%
                                                   14.0%
                                                              26.5%
                 50 
                            0.5%
                                        10.0%
                                                   31.4%
                                                              53.7%
                 100 
                            1.1%
                                        19.0%
                                                   52.9%
                                                              78.6%
                 500 
                            5.4%
                                        65.0%
                                                   97.7%
                                                              100.0%
                 1000 
                            10.4%
                                        87.8%
                                                   99.9%
                                                              100.0%




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-----------------------




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