Analysis: Japan's date with disaster

Japan is in trouble. Apart from its well-publicised economic difficulties, the country has another problem, writes Eric Leach. It is in denial over the year 2000.

This could be a problem for us. Many organisations and markets are sensitive to ? and dependent upon ? activities in other countries, and so Japan?s problem is potentially theirs too.

?The awareness of Y2K is very low across the whole of Japan,? said Hideo Hirahara, president of Tokyo-based software integrator, Cell-Infortech. This view is backed up by evidence from other sources.

The latest volume of the British Computer Society?s year 2000 guide, which carries a round-up of the international state of readiness, paints a worrying picture of year 2000 awareness among all but the largest Japanese companies.

?The major industrial and financial companies appear to be assessing and carrying out [year 2000 work] in line with best practice,? it says of Japan. ?Elsewhere, especially in SMEs [small and medium-sized enterprises], there is a staggeringly low level of year 2000 awareness.?

Some firms are advanced in their preparations. Tokyo Electric Power, Marubeni, The Bank of Tokyo-Mitsubishi, Nomura Securities, and Nippon Life Assurance maintain they will get their software fixed by the end of 1998. NTT, Japan Airlines and East Japan Railways will complete their fixes by the end of 1999, a year later than most large UK companies.

But, as with the rest of the world, the most ill-prepared are the medium-sized and small companies. A representative of the Ministry of International Trade and Industry (MITI) said that he was ?concerned that an extremely alarming situation could result unless prompt action is taken?.

Even if year 2000 problems mainly affect SMEs, the result could be a knock-on effect on Japanese companies whose supply chains are bound to their smaller suppliers and customers. Problems at these companies could cause disruption among their UK subsidiaries and trading partners.

There is no Japanese government initiative ? like the UK?s Action 2000 ? to research the problem.

A symptom of the low year 2000 awareness is the lack of advertising by product and service vendors and of year 2000 Web sites.

One Japan-watcher points out that culture is largely to blame. Loss of face is to be avoided at all costs in Japan. Admitting that you have a problem which you have created would be anathema to most Japanese people.

Related to this is lack of accountability within the business sector. Last year the Tokyo Stock Exchange went down for half a day. No one was demoted or lost their job. More recently, the heads of nine major Japanese banks apologised to the government for their companies? involvement in bribery. Officials have been indicted, but the bank?s bosses are expected to keep their jobs.

The strict hierarchy in organisations does not help matters either. If a programmer is year 2000-aware and his boss won?t listen, he is unlikely to get a hearing higher up the organisation.

Also, because Japanese computing is in some ways less mature than US and much of European computing, many large Japanese organisations are embroiled in radically ?new? and complicated client/server implementations, forcing companies to change their organisational structures. The move to client/server systems means the year 2000 problem is seen as one problem too many to deal with.

Another aspect of the Japanese software scene is the lack of rigorous discipline in design and analysis, documentation and testing.

?Crisis management is a non-existent discipline in Japan,? said Hiroki Kamata, President of Soken Planning, one of Japan?s leading IT research and consulting agencies. The historical approach to problem solving in Japan is that whenever a problem is encountered, everyone works together to solve that problem.

A few years ago, Soken Planning worked with a US consultancy to introduce the concept of contingency planning into Japan. ?We had to abandon the initiative because very few Japanese executives could embrace the concepts of contingency planning or disaster recovery,? Kamata said.

In many Japanese organisations the year 2000 problem has not yet revealed itself. When it does, it?s hard to see how Japan will have the time or resources to solve it and avoid disaster.

Eric Leach is UK representative for the Object Management Group.

...and the rest of Asia?

The latest BCS advice paper on the year 2000 says: Hong Kong Awareness has grown enormously in the last four months as a result of articles in the press and substantial TV coverage. The country?s IT infrastructure was mostly installed in the last 10 years, and there may be significant issues to address to ensure compliance. Singapore Very similar to Hong Kong but with less impact, as much of Singapore?s technology infrastructure was installed very recently. Taiwan Pockets of high technology users are likely to be taking sufficient action. However, they may be brought down by infrastructure and supply chain issues elsewhere in the country and internationally. Indonesia Severe inflation is already causing system failures, as currency values now require five digits rather than four in commercial and accounting systems. Despite these difficulties, some progress has been made. Thailand When surveyed in October 1997, less than 5% of people had any knowledge of the issue. Compliancy work under way is progressing very slowly.