How the Y2K Issue Was Deliberately Exaggerated by ERP Vendors

Executive Summary

• Both software vendors and consulting companies deliberately exaggerated the Y2K issue to increase ERP sales.
• This burning platform of Y2K could not have been as effectively created without the paid-off media entities.

Video Introduction: The Y2K Issue

Text Introduction (Skip if You Watched the Video)

Before 2000, a relatively minor issue concerning addressing a coding oversight for how many digits were used to represent a year in software was blown into a full-bore crisis by entities with software and consulting services to sell. Y2K was a major promoter of ERP software sales and consulting implementations. However, it was based on a lie that the old system needed to be replaced with new systems. It was also critical in replacing custom-developed applications with generic packaged software to gain a foothold in companies and lock them into more purchases from the same vendor. You will learn how this happened and how the media were complicit in promoting this marketing and sales scheme to the general population and IT decision-makers in particular.

How The Y2K Scam Was Pulled Off

While researching the book The Real Story Behind ERP, I found interesting information regarding the tactics used to sell ERP software. One of the many arguments ERP vendors to make sales was that ERP software purchases were necessary because they were the only thing that could guarantee that the purchasing company would not run into Y2K issues, which had the potential (it was thought and promoted at the time) to grind their business to a halt.

Reviewing the Y2K Issue with Hindsight

What became evident from looking into this matter with the benefit of hindsight is that not only were the Y2K fear proponents have proven wrong once the year 2000 came and went, but very likely they cynically used the fear of Y2K and themselves fanned the flames of Y2K to increase their sales. Furthermore, none of the people that made these inaccurate projections of what would happen after Y2K was held accountable for the false predictions. Instead, those that told the biggest lies of what would happen after Y2K normally benefitted financially from telling this, ie.

To begin, let us review what the Y2K issue was.

“The Year 2000 problem (also known as the Y2K problem, the Millennium bug, the Y2K bug, or simply Y2K) was a problem for both digital (computer-related) and non-digital documentation and data storage situations which resulted from the practice of abbreviating a four-digit year to two digits.” – Wikipedia

The following steps could have addressed such an issue.

Step 1: Adding Two Characters to Date Tables

By adding characters to the date tables, the rest of the program would have represented the years of 2000 and all the years after, as long as step 2 was also performed.

Step 2: Logic Adjustment

Adjusting the logic within the applications’ code to perform calculations based upon that four-character code (that is, to work with the four characters of 1978 as the date rather than the two characters of just 78).

How the Industry The Ignored Warnings from Academics

The entire Y2K issue was known as early as 1958. Bob Bemer attempted to educate everyone from IBM to the US Government on the problems that would follow post Y2K if programmers continued to truncate the year from four digits to two digits. He tried to perform education for twenty years. People ignored him.

Magazine articles directly addressed the future Y2K issue and recommended changes to four-digit date fields, and these recommendations were also ignored.

“Critics of large-scale remediation argued, during 1999, that the absence of significant problems, even in systems that had not been rendered compliant, suggested that the scale of the problem had been severely overestimated.” – Wikipedia

Therefore, it is impossible to propose that companies did not have enough time to address this issue. They were aware of the issue for decades.

Using Fear as a Motivator – To Sell Software!

There is ample evidence that Y2K was a deliberately exaggerated fear, and some of the entities most responsible greatest for exaggerating this fear were ERP vendors themselves. By exaggerating Y2K (which could also have been addressed by only making the program adjustments to the old/legacy software), the ERP vendors created a burning platform to jump to their ERP systems. ERP vendors did not want companies to go through and perform step 1 and step 2 described above. ERP vendors always want to replace the custom-developed systems that a company has. Typically, they will tell any lie they have to convince companies to leave their old systems and use the ERP vendor’s generic functionality. Y2K was just another lie they told to persuade their prospects to buy from them.

It should be noted that fear is often used as a motivator to make sales.

IBM was well-known to use fear as a sales tactic, as is explained in this article.

The Y2K Sales Approach: Light up That Platform!

When I worked at i2 Technologies, the salespeople used to say,

We need to create a burning platform.

This is an analogy taken from working on an oil platform.

That while most people will not willingly jump off from a high platform into the ocean, they will if the oil platform is on fire. Thus, salespeople are often trained to try to make it seem like other solutions will lead to enormous company problems.

The idea is to create this concept in the head of the sales prospect.

ERP vendors leveraged the inaccurate reporting on the following horrible problems with Y2K that the sales prospects likely felt they had to make an ERP purchase.

Help From the Popular Media in Creating the Burning Platform

On this issue, the traditional media were not only useless. Still, they were used as a passive lapdog of industry sources to disseminate false claims about Y2K directly to IT decision-makers. Near universally, IT media did close to nothing to triangulate with other information sources on this topic. A first place to begin to get different informed viewpoints would have been the computer science departments of universities. The traditional media performed shockingly little research, preferring to gather information from biased software vendors and consulting companies that had new software and services to sell. That is, senior members of these companies who had a giant financial bias and are glorified salesmen were presented as “experts.”

There is little excuse for how easily the media were duped and allowed themselves to be deceived. Others voiced with the technical expertise to know where out there – and that reached out to the press, but they were not listened to by most of the media.

This is explained in the following quotation.

Some experts who argued that scaremongering was occurring, such as Ross Anderson, Professor of Security Engineering at the University of Cambridge Computer Laboratory, have since claimed that despite sending out hundreds of press releases about research results suggesting that the problem was not likely to be as big a problem as some had suggested, they were largely ignored by the media. – Wikipedia

The Counter Argument on Y2K Hysteria

The argument that has been used that the only reason Y2K was not a bigger issue was that of remediation steps that were taken.

However, several pieces of evidence contradict this argument. One is comparing companies in the US that engaged in Y2K remediation versus those that did not.

Data Point #1: Companies in the US That Performed Little Y2K Remediation

The lack of Y2K-related problems in an estimated 1.5 million small businesses that undertook no remediation effort. On 3 January 2000 (the first weekday of the year), the Small Business Administration received an estimated 40 calls from businesses with computer problems, similar to the average.

None of the problems were critical. – Wikipedia

A second data point is a comparison across countries. Different countries followed remediation efforts to various degrees. The countries that did little Y2K remediation can be compared against countries like the US, where companies bought applications and raced to implement them before the Y2K deadline.

Data Point #2: Companies in the US That Performed Little Y2K Remediation

The lack of Y2K-related problems in countries such as Italy, which undertook a far more limited remediation effort than the United States.

In an October 22, 1999, report, a US Senate Committee expressed concern about safe travel outside of the United States. The report stated that overseas public transit systems were considered vulnerable because many did not have an aggressive response plan in place for any problems. Internationally, the report singled out Italy, China and Russia as poorly prepared. The Australian government evacuated all but three embassy staff from Russia.

None of these countries experienced any Y2K problems regarded as worth reporting. – Wikipedia

This appears quite damming. However, after Y2K passed, I could not find an example of analysis performed regarding the claims by software vendors, media, and consulting firms as to how much of what they said about Y2K was true.

IT decision-makers lacked such an understanding of coding that they were easily bamboozled by ERP vendors and consulting firms who convinced them that it would be easier to replace their entire systems than to make some small modifications to their tables (adding two characters) and to the logic of their already existing applications. ERP vendors and consulting firms told a lie –. Still, a very high percentage of IT decision-makers lacked the knowledge of development to contradict what the salespeople were saying. 

Conclusion

Any major media outlet did not report that the Y2K issue should have never existed in the first place. This follows a long history of unquestioning and compliant media coverage, which primarily repeats whatever financially biased entities say.

When bad things happen, someone did know, and most often, someone provided a warning. It is just that it was not commercially or politically convenient to listen to the advice. However, large entities never have to worry because no matter how many warnings they get, they can proceed business as usual. The media entities they pay to serve as their marketing front end will not challenge them.

When a major event does occur, the IT media will be perfectly willing to write that faithfully.

No one could have seen this coming.

This evidence, when compared to the fear-mongering that was prevalent at the time leading up to the year 2000, makes one wonder how much of the uproar was driven by entities with something to sell.

At this point, it’s hard to debate that the promoters of the Y2K problem weren’t wrong. But the proponents of Y2K have moved on to promoting other things and are not interested in being challenged on their previous claims. And it is also unsurprising how little analysis there has been in how much the software vendors and consulting companies lied to their customers by exaggerating Y2K.

A 100% Avoidable Problem

In How the Y2K Issue Was Entirely Avoidable, I cover more about how Y2K was known as far back as 1958 and the entire problem solved by changing the programming approach to dates.

References

https://en.wikipedia.org/wiki/Year_2000_problem