Warning to listed companies
COMPANIES listed on the JSE will be required to disclose their computer systems' ability to cope with the year 2000 date change by the end of April.
"Should companies not take heed of the problem posed by the approaching millennium, they could face financial ruin from legal suits from their shareholders, suppliers and clients," warns Johan Serfontein, a spokesman for ITI Technology Holdings.
He says data is considered a corporate asset and should a company be in the position that its systems fail, it could be liable for negligence in protecting its assets.
"This issue falls into the corporate governance field for listed companies as the JSE will be implementing regulations requiring listed companies to disclose their compliance with year 2000," he says.
The JSE's technical manager for listings, Rudi Bam, expects this regulation to be enforced by the end of April. The regulation will apply to currently listed companies while new companies wishing to list will have to disclose their compliance in their pre-listing statements.
Serfontein says that although many companies consider 2000 to be two years away, the time available is much shorter.
"You have to look at the time horizon on which your system operates," he says. "This relates, specifically, to the company's year-end: if a company's year-end is at the end of February, it might already be too late since they need to run their penultimate year-end before 2000 with a system that already complies with Y2K.
"A possible solution is to do a trial rerun of the year-end financials with a system that has been updated, although this is not ideal.
"People must remember that the closer we come to D-Day, the more difficult it is going to be to complete the conversion, probably requiring even greater resources. If companies are converting their system in-house they could, therefore, be falling even further behind in their schedule."
Serfontein says outsourcing the conversion is popular and probably the most effective way to tackle the problem.
Once the conversion is completed the most time-consuming phase is started: testing, which constitutes between 60 and 70% of the entire process. This procedure involves testing programme functionality, ageing of the transactions and checking the database record integrity.
Selwyn Batista, senior manager of systems at the JSE, says the organisation will be fully year 2000 compliant by the end of this year.