Mothballing Your Y2K Effort

1. Mothballing Your Y2K Effort So Soon ! Mothballing Your Y2K Effort So Soon!

2. John S. Farhat President of The Technology Group. Happy to see everybody out of the bunkers at our tribal meeting. Don’t forget the kerosene and clean water exchange at the end of the meeting.

3. Y2K Disasters Naval Research Academy Reports the year as 20100. Lasted a day! Our web site did the same. Lasted yet another day.

4. Other Y2K Disasters Having spent all that money and we have no real disaster stories to tell - Not even one good movie. (Thank God for hackers who will keep us busy with Yahoo and e-Bay stories for a while)

5. Y2K Success Stories Having spent all that money, and all the valuable information it has created.

6. Main Premise This whole presentation is built on the premise that an organization is: A System. It takes inputs. Generates outputs (and profit). Like any system is has subsystems. Like any system, it can be optimized to function better.

7. Example: Organization As A System Supplier Profit to Share Holders Raw Materials Marketing Materials A/P Purchasing Other Functions Accounting Manufacturing Production Planning Cash Management Order Management Payroll A/R Marketing Customer Orders Customer

8. Example: Sub-Systems Order Received • Customer Verification • Credit Validation • Order Acknowledgement • Deals, Discounts, Pricing • Billing, Accounts Rec. • Verify in stock ATS To Whse • Pick list Inventory Relief • Transport Rqst • Bill of Lading • Initial Invoicing • Production Scheduling • Raw Materials on Hand / Re-supply • Labor Scheduling and Availability • Planning and Forecasting

9. Secondary Premise Nobody or No Group of People in an organization of a reasonably small size and above knows how all the pieces fit together, and which points are good process enhancement points.

10. Remember? Do you remember all the work and all the advice for Y2K preparations you received. Let’s see if the next set of slides look familiar. I have pulled them directly out of a Y2K preparation seminar The Technology Group organized in the middle of 1999. Quick run……..

11. Y2K Advice (1) Identifying and prioritizing your risks Test Strategies for Business Systems Develop work arounds.

12. Y2K Advice (2) The steps required to make a system or product Y2K compliant are: 1. Awareness from Proper Planning 2. Assessment a Impact Analysis b. Inspection (Internal & External Systems) c. System monitoring d. Evaluation 3. Testing/Validation

13. Y2K Advice: External Dependencies • External Dependencies are risks presented by factors outside the enterprise; these include risk present in the possible failures of business partners, suppliers, public utilities, transportation, telecommunications, governments, and other businesses.

14. Y2K Advice: Processes Examine your business and its processes Be sure to know and understand these points. • What are the basic components of your business? • What are the internal processes? What are the external processes? • Which processes are mandated by law to be compliant; which processes are critical to your companies survival ? • Which processes are most vulnerable to Y2K issues?

15. Y2K Advice: Planning Question 1 -- Why should I plan for a situation which may never occur? • Even if a Y2K catastrophe does not occur, planning will prepare you for other types of emergencies. • During planning, you will learn more about your business strengths and weaknesses. • Planning is an opportunity for you to encourage teamwork in your organization.

16. Y2K Advice: Planning Examine your business and its processes Include computerized and non-computerized processes Include historic information processes which are date dependent, such as sales history, market trends and, inventory aging, A/R aging and forecast history. Also include communication processes within your business and to the outside.

17. Y2K Advice: Planning Examine your business and its processes Write down your findings in a concise and detailed manner. Create a diagram showing transactional business flows of your company. Include in this all critical forms, such as orders, invoices, inventory tickets, vouchers, and checks. Include all contacts between departments within the company. Include all contacts between the company and external sources.

18. Y2K Advice: Planning Publish your business flow and critical path findings to the company Be sure to encourage suggestions and comments, but give a closing date for changes. • Concentrate on areas that will need workarounds. • Look not only for direct Y2K implications, but for secondary impacts to your business. For instance, how do you take an order if the computer is down due to power outages? • Listen to what those within your company; they do the work, and know their areas well. You need to incorporate this expertise into the overall plan. • Check with your outside contacts to see what they are doing to prepare for the century change.

19. Y2K Advice: Planning Review analysis and input and from these develop a list of critical touch points. Be specific -- point out potential problem areas within your organization. • For every potential problem, develop a manual workaround. • Work with each area to make sure that the workaround is do-able. • Publish the workarounds quick, and move on to the next stage --- PREPARATION

20. Y2K Advice: Contingency Planning • Why do you need Contingency Planning ? • No matter how early you started everything that impacts you can not be guaranteed to be compliant

21. Y2K Advice: Contingency Planning • How to prepare • Identify risks • Prioritize based on risk • Develop alternate actions • Assign responsible parties • Test the plan

22. Clean Management Plan Contingency, 2nd Priority to Fix in 2000 Must Fix Before Year 2000 Very Critical - High Business Impact Clean Management Plan Contingency, 3rd Priority to Fix in 2000 1st Priority to Fix in 2000, Diminished Operating Plan Can survive six months - Medium Business Impact Clean Management Defer Defer Non-Critical - Low Business Impact • Date Impact • No Workarounds Available No Date Impact, Workarounds Not Needed Date Impact Workarounds Available Y2K Advice: Contingency Planning

23. Y2K Advice: Testing • Test manual workarounds in the live environment. • Uncovers problems with workarounds. • Allows time to correct problems.

24. Y2K Advice: Testing • Hold post evaluation meeting. • Discuss good points and concerns. • Make any additional changes.

25. Lot’s of memories… • Let’s see how the solutions were implemented.

26. Organizations’ Solution • Remediate Computer Based Systems • ERP or such solutions • Piece meal solutions

27. Problem • A lot of the main issues with the business were never solved. • Reason: The looming DATE, and the BUDGET.

28. Two Examples • Example of ERP Implementation • Example of Custom Piece Meal Solution

29. Example: ERP • Disruption to organization is very large. • Changing ineffective processes at the same time as the implementation was deemed too risky. • SOLUTION: Implement New System to Support Old Processes.

30. Example: ERP Consequences • A lot of knowledge about the two laying on people’s desks waiting to be trashed or worse yet, filed

31. Example: Custom Piece Meal Solution • Started with a situation that had many problems, systemic as well as process based. • Initial solution: Duplicate existing system to create a compliant version. • Rejected! • Mindful of the opportunity accorded to us to alleviate the process issues, we set to work.

32. Example: Custom Solution Consequences • More dramatic result to customer. • New Processes New Systems. • Criticism: Using ERP or such solution would have produced the same dramatic results. • Answer: Most likely scenario is New System / Old Processes.

33. GEM • After January 1: • Utilize knowledge gained to make business process improvements.

34. If You Did Remediation • Pure Remediation simply allowed the existing programs to be fixed to properly handle the date. • No solutions around the systems and areas around it. • If your organization performed pure remediation: You are an excellent candidate for Y2K enhancements.

35. If you Implemented ERP • Two situations: • New System / Old Processes • New System / New Processes • If you fit into NS/OP: You are an excellent candidate for Y2K enhancements. • If you fit into NS/NP: Congratulations… Go to Disney World.

36. If You Implemented Custom Systems • It is likely that you implemented special enhancements to the process. • It is also likely that integration opportunities and additional process enhancements can be achieved.

37. Take Away • The Technology Group urges you to wait before committing Y2K analysis results to the filing cabinet or trash. • Money has already been spent. • Take one more look at the results. • Fix a problem. • Achieve a dramatic result.

38. Why • The next opportunity to have this much information about the activities of an organization…. Will not occur for 7999 more years.