Is Japan really the biggest Y2K Risk in the World?
by Hiro Ochi

This article is in response to the warning article by Mr. Karl W.
Feilder, which states that the Japan is the biggest Y2k Risk in the =
World.=20

There is an assumption made in the article that the PC is used in the
most important mission critical systems in Japanese firms. It may be =
true in
many UK, other European environments, and the US, but not in Japan. I =
have not
heard any cases in which governmental organizations and large firms use =
the PC in
their mission critical systems. Most of the Japanese organizations do =
not
fully automate various interfaces as seamlessly as the Western firms =
have
done.There are many manual interventions or checks in various steps in =
the
Japanese environment. For instance, usually when mainframe data are =
downloaded to the PC, a printout is created to check the validity =
manually before these data are used, integrated or transferred to =
another system in the PC. From the Western culture's perspective, this =
method of automation is inefficient, clumsy
and very unproductive. But, because of the manual intervention in =
various steps,
the Y2K problems are less sophisticated in most of the Japanese =
applications.=20

In other words, a Westerner cannot judge the Japanese system and its
environment with the Western standard. The Japanese will face some
difficulty with the Y2K problems, but not due to the PC issues.=20

I have dealt with the Japanese software industry for over 20 years. I
encountered some stumbling blocks for the first several years due to a =
lack of
understanding of the Japanese environment, even though I grew up there =
until I was 18. I spoke Japanese well and I did not have any cultural =
issues that a Westerner would be faced with. I have been involved with =
the Y2K issue since 1993 and I have tried to convince the Japanese to =
prepare for the worst scenario since then. I have written numerous =
articles about the latest in software engineering in both English and =
Japanese. Naturally I also wrote many articles about Y2K issues and have =
made many speeches at various places such as US Dept. of Defense =
"Software Technology Conference" meetings sponsored by the Japanese =
Information Service Industry Association, etc. I have written three Y2K =
books in Japanese so far. Therefore, I believe I am qualified to talk =
about the Japanese situation.=20

Let me try to explain the Japanese situation more clearly. Large
Japanese organizations use the software houses as a subcontractor for =
software
development as well as for software maintenance activities. Of course,
these large firms quite often deal with the Japanese computer =
manufacturers
as the system integrator who in turn hires these software houses as a
subcontractor. Most of the mission critical systems that are very =
visible to the
customers are well taken care of, similar to any other situations by the =
system
integrator and by the software houses. The Japanese try to hide any =
error, mistake or any embarrassment from their customer. In short, the =
systems which are very visible to a customer received a high priority to =
be fixed whereas the systems not visible to customers were set aside. =
Namely, the "back office" systems, including some of the PC =
applications, are not yet adequately remediated in many cases. However, =
most of these systems are not critical ones for the firm to continue its =
business even though they may create some inconvenience or trouble to =
employee productivity.=20

The mission critical systems are still run on mainframes and they have
been worked on for the past several years. Of course, some important =
data
are downloaded to PCs. However, the Japanese executives in general do =
not
know how to use spreadsheets to analyze these data. These data are =
usually
checked manually by their staffs who in turn manually combines or enters =
it to
their own PC applications. Most of the outputs are manually checked for =
unusual
information before the output is passed to a manager. Consequently,
there is hardly any chance that the bad information or wrong data are =
provided
to the top management, as these managers have not looked at the critical
information directly on PC, but rather on paper documents for review.=20

For instance, the difference in the use of spreadsheets between the US
and the Japanese is very big. Assume that the US executive uses a =
spreadsheet
for the critical analysis of company data. The Japanese executive cannot =
use
the spreadsheet nor can they likely type at the keyboard as well. The =
staff
of the Japanese executive is the one who may be able to use spreadsheets =
to
integrate or combine various data for the executive. Their usage is =
normally much
simpler than the US counterpart.=20

In addition, spreadsheet analysis is probably used by 200 Americans to
every 1 Japanese in business situations from my experience. In other =
words, the
Japanese do not understand enough about the various uses of the
spreadsheet, which is considered an important potential Y2K problem in =
PC
applications. There is hardly any critical issue with the Y2K problem in =
the usage of spreadsheets in Japan as there is in the US.=20

Mr. Feilder pointed out that the various governments should transfer
accumulated knowledge about Y2K campaigns to Japan through full page =
print ads, TV and radio ads on behalf of their local companies that =
trade with Japan.
What the Japanese government and its political leaders need are as =
follows:=20

1.The Japanese government and the large Japanese organizations need
to have an independent verification and validation (IV&V) function
because of their surveys, which are all based on the self-evaluation. US =
and European organizations could set up rules similar to the following:=20

Without the proper IV&V, a foreign financial institution should not and
cannot lend any money to a Japanese firm; a foreign firm should not
buy any goods and products from a Japanese firm without proper
guarantee of the Y2K issues.=20

2.The essential basic infrastructure such as electricity, water, sewage,
natural gas, gasoline, transportation, telephone, medical
facility, financial institutions and governmental services are properly =
checked by
IV&V. For instance, I discovered that the Y2K situation of the Japanese
nuclear power plants report indicated that the Y2K checks were all done =
by
manual paper check or desk check. There is no guarantee that the paper
documentation is identical to the production facility nor does it =
provide the
necessary accuracy without physical testing. But, all governmental =
leaders
as well as the electric power companies are stating that the Japanese
electricity industry is 100% Y2K compliant (ready). The president of the =
Tokyo
Electric Power publicly stated in September 1998 that his firm was Y2K
ready when their testing would not planned for completion until
summer of 1999. Nonetheless, the Japanese government accepted his words. =
In
other words, other countries need to demand verification documentation =
of Y2K
readiness, certified by third parties, before the world will accept =
readiness
statements from the Japanese government and any other organizations.=20

3.At the Southeast Asian conference in April 1999, The Deputy
Director of Foreign Affairs of Japan announced that all of their =
essential
infrastructure organizations would have contingency plans ready by the =
end of
June 1999. At that time, I was stating that he was lying because even
5% of these firms could not come up with an adequate contingency plan by
July. I have not heard anything since then. Foreign governments should
demand the Japanese government produce the appropriate materials for a
contingency plan from each and every essential organization. Most
of the Japanese organizations do not have an adequate contingency plan
nor do they have any training schedule set to practice it.=20

4.Keep sending Y2K questionnaires to Japanese manufacturers for
their Y2K compliance. Most Japanese executives still believe that Y2K =
issues
are an IT problem, not a management one. Most of them do not even pay
attention to this issue at all. I am very concerned about the embedded
systems used in the automated manufacturing plants such as a plant =
converting
sea water to drinking water, chemical plants, etc., which may be a
major threat to safety of the people in the world.=20

5.Pressure the Japanese media to broadcast and publish Y2K
programs/articles in Japan whenever a US or European firm spends
money for advertisements in Japan. Similar to US governmental
officials, the Japanese bureaucrats and politicians are afraid of =
reporting
the truth about Y2K problems! Another way is to broadcast special Y2K
investigation reports about the true preparedness in Japan in a US
national program such as Dateline, Nightline, 60 minutes, etc. The =
Japanese
government and the media are afraid that the truth would bring a
panic reaction upon the Japanese people. The Japanese media is too
afraid to print/publish the truth about Y2K because of the sponsors'
retaliation.There is hardly any news which is properly investigated and
verified as a Y2K compliant case by any media. That is one of the main =
reasons
why my second Y2K book could not be published by any of the well-known
publishers and why there was at least an 8 months delay in its
publication.=20

6.Similar to the US, small to medium size firms are well behind in
their Y2K efforts. Some of them cannot get any help from the vendors or =
the
manufacturers. Some are ignoring the situation. However, for the
past 18 months or so it is true that some governmental agencies have =
been
trying to visit one by one with the owners/presidents of firms to talk
about the seriousness of Y2K problems. I believe that 30% to 40% of the
firms, including the medical industry, will not be Y2K ready by the end
of this year. It may lead into the major disaster in Japan which may =
spill into
US and European firms.=20

7.A most aggravating fact in Japan is that the prime minister, his
cabinet members, all politicians, the governmental bureaucrats, the =
local
governmental bureaucrats, so-called business leaders, etc.,
consider that their job is completed as soon as they issue a notice to =
prepare
for Y2K to someone or they create a Y2K project team. They do not take =
any
responsibility for the project at all. Nobody takes any
responsibility for the Y2K problem. For instance, the Y2K advisory =
council under the Prime Minister does not have any authority nor does =
any member of this
group need to take any responsibility for their opinion. In other words,
there is no responsibility, authority nor accountability in this =
critical
problem in Japan similar to any other situation. Can you believe that =
there is no
ownership of a system in a large organization? Yes, you can, in Japan. =
There is
no CIO in a Japanese firm.=20

8.Most of the Japanese adults know the meaning of the Y2K. But,
there is less than 1% of population that has prepared things such as =
food,
medicine, water, etc., for the Y2K transition. More than 95% of
the population still believes that the Y2K issue will be a minor
problem such as the oil shock, or the dollar/gold Nixon shock because =
most of the mass media will not publish all of the bad "potential" facts =
before
Year 2000. They are afraid that a major panic will set in as soon as a =
serious
problem is announced in Japan. The media will not take any =
responsibility.=20

I listed several things that a reader may be able to do in order to
force the Japanese government to take more firm action and =
responsibility. I
would appreciate it very much if all of you could send the message to =
the
appropriate organization.=20

--------------------

Hiro has over 30 years experience in software engineering and
international, high-tech business experience, having made strong =
contributions to
Japanese and US firms. He has been recognized as an expert in the latest
software engineering fields, especially, in the areas of marketing =
analysis and
design technique, software and system quality strategy, sales strategy, =
total
quality management in international business software activities, =
productivity
in the IS departments of large firms, and multimedia technology.=20

Comments: Hiro Ochi at: hochi@ibm.net.

this article was forwarded to me from Finn Bullers at KC Star

--=20
david moore