The 2000 fear mongers

Newspapers and magazines have been shouting impending doom as computers are gearing up to deal with the switch over from 23:59:59 on 31st December 1999 to 00:00:00 on the 1st January 2000. If you haven’t yet heard anything about the ‘year 2000 problem’, ‘Y2K compliance’, ‘the millenium bug’ or ‘century date code compliance (CDC)’ then you are far defter at dodging sensationalism than I am.

It is of course a real problem and quiet likely to affect a number of people. Almost all of us are in one way or another reliant on computers. If you think you’re not and you don’t even know how to switch one on then think again. When last did you use an autobank, a petrol pump, an elevator or fly in an aircraft? All of these are dependent on computers and if not checked out could cause a problem.

The issue revolves around the fact that many systems written over the last 30 years stored only two digits for a date – so instead of storing 1987 the system stored 87 (assuming that the century will always be 19 for the life of the system). At the time it was expensive to store information and programmers were very conscious of saving whatever space they could. A database with 10 million dates stored as 87 takes half the space of 10 million dates stored as 1987.

So there are systems out there that are not going to know anything about the 21st century. Problems that arise could range from the disastrous to mere inconvenience. Credit card expiry dates that used to be in the format 08/97 will now have to be extended to include the century. Banks may face more drastic problems. Their computers have checks built in which disable customers’ accounts if they haven’t been used for a certain period of time. If the computers do not know about the century, then on the 1st January 2000 they will subtract the current date (00) from the date when the account was last used say 27th December 1999 (or 99). This will result in them thinking that the account hasn’t been used for 99 years and they will logically (as computers are) disable it.

These mistakes are not normally very difficult to fix. A graduate programmer should be able to rectify most of them with one arm tied behind her back. The problem is that some companies don’t recognize that they have a problem and won’t until Saturday morning on the 1st January 2000. By that time things are going to be pretty hectic. Step in the consultants and self-appointed experts on the year 2000 problem. If you believe everything that you hear from these people, you might as well close down your business and spend your time thinking of your next career.

Large accounting firms, legal firms and software companies are all getting in on the act by offering their services. Employing these people you will quickly be advised on the current horror stories about companies that will fail because of the year 2000 problem. You will be further advised on how to employ them for large periods of time (normally until 2001 when the danger will have subsided) to advise you on how to make your systems year 2000 compliant. In selling their services they are likely to instill a sense of fear in you that without them you are going to face a major disaster.

The year 2000 problem is a real threat to business. It is highly likely that you and your company will be affected by it in some way between now and the turn of the century. Like any problem though, hype, panic and fear will not do anything to solve it. Don’t believe everything you hear from people who are supposedly assisting you in solving the problem. First identify potential problem areas – these can range from your mainframe, to your PABX and pocket calculator. Work out the worst case scenario, decide what is crucial to fix and set about fixing it. Ignore the endless articles showing statistics of how many businesses will fail in 1999. At the end of the day, the most important thing is that you survive.

Amazing Amazon – where to from here?

Isn’t it amazing how we take things for granted once they become a permanent part of our lives? A few years ago it wasn’t possible for one bookstore to stock 2.5 million books in one place. Now it is a reality with Amazon.com’s web site which allows you to browse, review and purchase any one of the titles in it’s database. Almost everyone I know now accepts that Amazon is an option when buying books on the Internet. With a 40% discount on most books it certainly is appealing.

A characteristic of the digital age is that success doesn’t always beget success. In the analogue only days – if you were successful it was quite likely you would remain successful for a long time. Take a look at IBM – in the 1970’s their business seemed impenetrable. They must really have thought that they had a winning formula – which is probably why they stuck to it for all those years.

This illustrates the point that in the digital age it is not sufficient to have something working without thinking about the next step. In fact if something works – break it and build it a lot better the next time – because if you don’t someone else will. Only in the last few years when they have been forced to, have IBM pulled their business apart, looked at it critically, and are now rebuilding it in a fashion which suits the digital age.

So getting back to Amazon, the success that they have achieved thus far begs the question – what do they do for an encore? Some things are obvious such as offering more intuitive and interactive searching and ordering facilities, which they have already done. More discounts and more information about the books are also obvious development.

Amazon’s model works because convenience and cost have drawn consumers to their online store. Technology and specifically the Internet has made this possible. The efficient handling of ordering and information save them money that they are able to pass on to consumers.

I believe that they now have to look at how Internet technology can take them to their next level of efficiency. Currently they take orders centrally (on their web site) and then books are dispatched either directly out of stock or ordered on from a printer. In the future orders can be routed directly to the printer nearest to the customer and the order despatched from there.

Another development which would further enhance Amazon would be to provide customers an opportunity to group together to get economies of scale for ordering and delivering. Let me give you my example to illustrate the point. I live in Cape Town and whenever I order books I eMail my friends to ask if they want to order anything from Amazon. I then submit one order for a number of books reducing the shipping costs for each of us. Now imagine if Amazon provided us the facility to do that but instead of just my 5 friends they deliver all books going to Cape Town in just one shipment which gets sent either weekly or when there are enough orders for Cape Town. The amount saved would again be considerable.

Looking at the power of grouping together consumers from another angle, imagine how much could be saved if all the people wanting to purchase a particular book grouped together and made only one order. It would then be possible to do one order for hundreds of copies of any particular book – again reducing costs through an increased buying power.

These are two ideas that could fundamentally change just one business that is using the Internet as a delivery mechanism. Just as a hiker climbing a hill can only see the mountains that lie when he has reached the hills summit, so too opportunities will present themselves as steps are taken to develop business on the Internet. The opportunity exists for Amazon to evolve their business to the next level. If they don’t, then I’m sure somebody else will.