Year 2000

In order to provide in depth Year 2000 information we have included this Year 2000 Guide for your reference.  For more Year 2000 information, go to U.S. Department of Commerce .


What is the Year 2000 Problem?

The Year 2000 computer problem (the "millennium bug" or Year 2000) arose from chips and software coded to indicate years using only two digits. This was done to cut costs in an era when memory was expensive. Date representations were entered and stored as six-digit fields: mm/dd/yy. The century was implied and not explicitly stored. This is a workable solution until the year 2000. At that time many computer programs will not recognize 01/01/00 as January 1, 2000 but rather as January 1, 1900. As a result, many software applications will fail or provide erroneous answers. For example, an application which subtracts dates to arrive at the number of intervening years will give a negative answer: 01/01/00 minus 01/01/90 would yield a negative 90 years from 1990 to 1900, rather than plus 10 years from 1990 to 2000.

The Year 2000 problem is not limited to old software (so-called legacy systems) running on mainframes. In fact, personal computers, local area networks, and even microprocessors embedded in such devices as medical equipment, process controls, test and measurement instruments are all potentially vulnerable. Many software companies have only recently issued Year 2000 compliant upgrades for many of their popular programs.

What are the implications of the Year 2000 Problem?
The consequences of the Year 2000 problem are unclear. Some contend that breakdowns will be minor at the turn of the century, while others predict global recession and the collapse of power grids, air traffic control systems, medical equipment, and myriad other dilemmas. Most major American public and private sector organizations are working towards Year 2000 compliance, or recoding their computer systems to adjust for the century change. Efforts have been less vigorous among small and medium-sized enterprises, often as a result of an incomplete understanding of the possible consequences of noncompliance.

The issue of who would be liable for failures resulting from the Year 2000 problem is being examined from various perspectives. Insurance companies, law firms, and clients are reviewing possible scenarios and the extent of exposure to liability. The Information Technology Association of America, a leading trade association in the Year 2000 arena, has advocated a dispute settlement approach to avoid long and costly legal cases.

Achieving compliance internally in a company or government organization is only the first step. All the external entities that the company or government organization depend upon must also be in compliance to escape the consequences of the problem. For example, if a company has achieved compliance, but one of its principal suppliers has not, then the company is still at risk of not receiving timely shipments of key components or inputs. In turn, if one of its major customers is not compliant, that customer may cease operations and the company's business could be seriously curtailed.

Time is running out on achieving compliance in time to avoid disruptions in many organizations. Experts now advise users to identify those systems that are mission critical and those that will cause less serious disruption. In addition, they recommend that users have contingency plans that they can activate to avoid the most serious consequences. For example, various government agencies have procured power generators for their processing centers. If you are not sure if the equipment you own is Year 2000 compliant, contact your vendors for specific information. If they cannot provide you with the specific information you require, they will be able to provide you with the appropriate manufacturer contact information.

Most experts cite several steps that must be followed to ensure that an organization's computer systems are compliant. First, the problem must be taken seriously by senior management. Sufficient resources, programmers, and money must be assigned to examine the organization's software code (sometimes this procedure involves tens of millions of lines of software code). After determining the extent of the problem, the code must be fixed and tested for compliance. As an important note, once you have reprogrammed your codes, run a test to ensure your system can interpret both the new codes and the old data.

How will this affect my international business?
If you are a U.S. exporter, you recognize the importance of maintaining a close relationship with your agents, distributors, buyers, and suppliers. these companies often represent your business' interests overseas. The chart below serves as your guide to ensure that you discuss all aspects of the trade transaction with your partners. You should discuss the chart with your international contacts to ensure that they are Year 2000 compliant, and to develop contingency plans in the event there is a failure in the export transaction process.

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