Commentary: The Y2 K Bug Repellent Wasn't A Waste

So the sky didn't fall and neither did any elevators (though some were shut down, just in case). Was all the hoopla, time, and nearly $600 billion spent worldwide to battle the Y2K bug much ado about nothing?

Probably not. All the results are not yet in, and the Gartner Group says that some 90% of Y2K glitches won't show up for months--when all potentially affected programs are used. But even if you believe the Y2K bug was the biggest scam of the century, all the time and money spent on debugging and reprogramming was definitely not wasted. It undoubtedly headed off many real and potential problems. But more importantly for the long term, Y2K preparation efforts forced companies and government agencies all over the world to get rid of buggy old software and aging hardware and invest in new technology.

BOARDROOM ENTREE. Now, systems are in place to provide a solid foundation for all sorts of new online systems for e-commerce and e-government. And the chief information officers who last year huddled with top management in Y2K war rooms, are now being invited into the boardroom for marketing and business-strategy sessions, some for the first time.

Ultimately, Y2K forced some companies to rethink the role of technology. "It helped many companies to realize that information technology is the business--and not just about a bunch of geeks in the corner office," says Bruce Webster, an analyst for PricewaterhouseCoopers.

With new, more "robust" networks in place, companies can take full advantage of the Web and e-commerce to streamline their businesses and reach new markets.

Take Washington Gas & Light Co. All employees are now hooked up to the Net for the first time, making it possible to share information and coordinate activities of different operations. "We're more efficient now," says CEO James H. DeGraffenreidt Jr. Before Y2K upgrades, he says, "we'd tell customers what day our service people could be there. Now we can tell them which hour."

At Marriott International Inc., guests now get computer connections in their rooms where fewer existed before. That's an improvement that came about because the chain had to make Y2K fixes to hotel phone systems. Says Marriott Y2K czar Ina Kamenz: "We asked ourselves in this whole thing, `do you fix old stuff with Band-Aids, or do you spend a little more money and put in new stuff while you're at it?' " she says. Marriott opted to spend the extra money.

At company after company, the Y2K bug-hunt yielded unexpected benefits. DaimlerChrysler, which spent $260 million to smoke out some 250,000 Y2K bugs, ended up deep-sixing 15,000 old computer programs. That not only cleaned out the digital cobwebs, it also made it possible for two-thirds of its plants to connect with each other on the same network for the first time. Now, "if we want to modernize again, we can all move at once in the same direction," says Roger Buck, the head of DaimlerChrysler's Y2K operations.

Even the federal government, which still relies on some systems installed decades ago, got with the modernization program. The Y2K bug was just the bogey monster needed to get more technology dollars put into agency budgets. "The Y2K threat put a gun to many of these old systems and finally put them out of their misery," says PWC's Webster.

Y2K TASKMASTER. There were other payoffs: Technology departments, famous for going over budget and missing deadlines, had new discipline imposed by Y2K. Now, says Marriott's Kamenz, "we've got tougher standards in place for the installation, purchase, and care of technology."

And the success of Y2K revamps may convince more boards to continue investing in tech: According to the Gartner Group, companies say they expect to spend as much as half of their tech budgets on e-commerce by fall. Predicts Gartner senior researcher Lou Marcoccio: "E-commerce and e-business spending will simply explode." As long as still dormant Y2K bugs don't, that is.

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