List Firms Face Y2K Problem Early

According to the calendar, 2000 is more than 10 months away; but for list management and brokerage firms the day of reckoning is fast approaching.

List orders are typically placed months ahead of a mailing, and some firms are already receiving orders for 2000. Frederick Victor, chief information officer for American List Counsel, Princeton, NJ, expects that those taking orders for the holiday season will need to be Y2K compliant by the end of March.

“It will hit our industry before anyone else's due to the lags,” Victor said.

By now, list firms should be completing the last tests of their order entry, accounting and other date-sensitive computer systems. Most are going the route of the Millard Group, Peterborough, NH, which chose to modify some existing systems and replace others. It expects to be ready in a matter of weeks.

Millard CIO Larry Key said most companies are aware of what needs to be done and he is confident suppliers and service bureaus will be ready.

“There are some companies that have not aggressively pursued solutions,” Key said. “But I don't see a mass business failure.”

ALC, meanwhile, invested more than $2 million in a total overhaul of its transactional system that lasted more than nine months and will take effect March 23. The company replaced every computer system including application and transactional servers, e-mail/Internet infrastructure, office automation software, its data warehouse and telephone systems.

“We looked at other options but wanted to fundamentally change our business processes,” Victor said. “The most optimal way was to start from scratch because the market has changed so much.”

Time-sensitive elements in an actual list such as age and last purchase date can be cleansed through reformatting algorithms and are not a huge concern, Victor said. To ensure the integrity of rented lists, ALC brokers have been issuing Y2K compliance clauses to managers for the last six months and Victor encourages all brokers to do the same.

Debra Goldstein, head of list management for Leon Henry, Scarsdale, NY, started sending Y2K reminders to clients in early 1998 and last week alone received three letters from other list managers checking that compatibility and compliance is on schedule. Leon Henry is modifying all its programs and expects to finish testing by Sept. 1.

Asked if finishing so late would affect mailings, Goldstein said that the remainder of the work consists of fine-tuning and that orders will be generated on compliant systems only.

For firms getting a late start, there are cursory fixes that will keep basic operations running. E-mail and telephone systems should be the first priority and can be easily replaced with newer equipment. Systems utilities programs can perform quick compliance audits on computer equipment to locate problems but won't repair the date glitch.

Fred Buckner, MIS director for Statlistics, Danbury, CT, said hardware is the first and easiest component to check. This involves communication with vendors to verify that existing equipment is compliant and receive support to patch problems. Simple program checks can be run to make sure future dates and leap years are tracking correctly. He also suggests setting up backup systems and files to retrieve data in the case of a network crash.

Statware, Centerbrook, CT, the sister company of Statlistics, and a provider of management and brokerage software for close to 70 list firms, has had Y2K compliant software for two years and owner Rick Lepoutre does not anticipate any major problems for his clients. He warns, however, that firms must look beyond their desktop applications and establish contingency plans for other functions like obtaining cash from bank accounts.

Another alternative for firms that know they will not be compliant in time is to establish partnerships with companies that are already up to speed to handle transactions and processing. Victor said ALC has discussed partnerships with some smaller list shops but has not made any commitments.

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