Y2K FOCUS GETS SHARPER AS 500-DAY MARK PASSES

DENISE POWER

NEW YORK -- With the countdown to Jan. 1, 2000 having just passed the 500-day mark Aug. 19, information technology executives from a variety of retailing segments say the clock on the year-2000 computer time bomb is ticking a lot louder.

While the level of preparedness among retailers and wholesalers varies widely, the supermarket industry's relatively recent embrace of technology advancements may help it deal with the problem.

"Many of our in-store systems are relatively new," said Ron Waldbillig, assistant vice president of management information systems at Hy-Vee, West Des Moines, Iowa. "In addition, our industry has added many new retail stores in the last decade, and remodeled many stores. Along with construction comes new hardware and software."

Indeed, many of the problems associated with the year 2000 are likely to come not from internal systems, but from companies' trading partners.

"For retailers, their main year-2000 exposure is in the supply chain coming in to them in the consumer packaged goods area," said Jim Duggan, research director at Gartner Group, a Stamford, Conn., consulting company.

"The CPG companies have a lot of embedded systems issues," Duggan added. "In addition, just-in-time delivery systems are relatively unsophisticated, and we've seen where automated warehouse systems wouldn't provide products with expiration dates past 2000."

Guidelines issued earlier this month by the Securities and Exchange Commission, Washington, may make it easier for companies to assess the level of their vendors' and trading partners' compliance. The SEC now requires publicly held companies to disclose -- in detail -- their state of readiness for the year 2000, including related costs and risks as well as contingency plans.

The new guidelines, which took effect Aug. 4, apply to documents for fiscal years ended after June 30, 1998.

"A measure of a company's seriousness about its year-2000 efforts is to ask who the [year-2000 project manager] reports to," said Duggan. "If it's not the chief information officer, with additional regular reports to the chief executive officer and the company's board of directors, the company isn't serious about this work."

Many retailers still are busy getting their own houses in order. "I don't count it even as 500 days because many of the projects we need to have accomplished are store-related, and we're kind of locked in as of September [1999], so it's actually less than 500 days," said Dick Mader, senior vice president and chief information officer at Boscov's Department Stores, Reading, Pa.

Mader said the company will have its new year-2000 compliant point-of-sales systems from NCR, Dayton, Ohio, installed by September 1999, and that no changes to store systems will be made after that point.

Typically, retailers don't like to make software changes once the busy holiday season begins but, even more importantly, there has to be extra time built in for testing systems in advance to ensure they'll work before the calendar changes to Jan. 1, 2000.

Although Boscov's is progressing well with its year-2000 project, Mader said the countdown adds a certain degree of extra pressure. "This is the only date information-technology folks have ever had that can't be allowed to slip. We feel we're in good shape, but it's like living with a cloud overhead," he said.

He added that retailers who aren't already well into their year-2000 project work are going to discover that professional resources are scarce and increasingly expensive. When the company first brought in consulting help a year ago, it was paying about $40,000 per person. "Then the flat rate became $50,000, and now it's somewhere in the 60s," he said. "If you haven't booked people by now, you're in trouble."