The United States is among several countries (e.g., Australia, Canada and the United Kingdom) leading the world with a fairly high level of awareness of, and preparation for, the year 2000 problem in governments and industries. A handful of other countries are only a few months back in terms of preparing and planning for the date change.

GartnerGroup urges individuals to take a long-term view of the issues. Withdrawing funds from banks or liquidating investments is not warranted.

For the most part, GartnerGroup assumes that most enterprises will address mission-critical systems so that 90 percent of the systems that do fail will be corrected within three days. Therefore, for most people, planning for year 2000. A "bomb shelter" mentality is not called for. Preparing for the new millennium should be much like preparing for a storm that will last less than a week. For the most part, planning for 2000 requires common sense and the implementation of contingency plans in a timely manner. As "no man is an island," individuals should plan to help friends, neighbors and their communities create a comprehensive plan for assessing and planning for the risks associated with the "millennium bug."

The United States is among the countries best prepared for year 2000 problems.

Individuals should prepare for limited duration, localized failures of services and infrastructure rather than a apocalypse. The type and number of failures will vary geographically and cannot really be predicted. Individuals should ensure that they have at least two weeks' salary in cash and up to five days' contingency supplies of key consumable materials (e.g., medication, fuel and food) that they might need.

The year 2000 problem is analogous to a major storm. In this case it will be, at worst, similar to a hurricane, cyclone or bad snowstorm. One can predict its arrival and can thus prepare for it. For individuals, the year 2000 problem will not be a catastrophe such as a severe earthquake, a huge asteroid crashing into the earth, or a nuclear war.

Individuals should be aware that in 1999, year 2000 failures will begin and the number of failures will rise as enterprises and government agencies begin their new fiscal 2000 year. During 2000, failures will occur throughout the year. After 2000, some applications that used only periodically will likely encounter problems because those applications were not tested adequately.

Throughout 2000, 2001 and 2002, enterprises will install some noncompliant solutions, attempt to use noncompliant archived data or receive noncompliant commercial software versions. This will cause some continued failures.

Many embedded systems will fail at midnight on January 1, 2000. However, most networks--IT as well as public telecommunications carriers--operate on Universal Coordinated Time. This means that if a network problem occurs (which could affect the Internet), it could manifest itself at 7:00pm on December 31, 1999, on the East coast of the United States, not at midnight. Fortunately, January 1, 2000, happens on a Saturday, so enterprises have at least two days to work on the problems, which should result in minimal effects on individuals.

To plan for personal business continuity and disaster recovery, it is necessary to plan for very specific failure scenarios. Disaster support and recovery plans can be developed to accommodate the duration of most failures. The key is that individuals will likely be capable of performing only very simple risk assessments and investigations to determine their risks and the likely risk factors and probability of failure for each category area.

System failures will likely occur in some applications but should be minor.

The most critical factors for most people and small businesses are clearly the availability of telephone service and electric power. The use of many services--e.g., automated teller machines, emergency services, use of credit cards, electronic funds transfer, stock transactions and airline reservations--are dependent on phone service. Each may internally have a low probability of failure, but they all depend on phone service and power availability.

GartnerGroup's Strategic Planning Assumption is that only 10 percent of mission-critical failures will last three days or more, and 70 percent will likely last less than 48 hours.

GartnerGroup advises individuals to do the following:

* Estimate the number of days that are sustainable without specific services or products and the likely impact of that shortage.

* Develop a list of questions that should be answered in each category that might affect your business or personal life, such as:

- Grocer: Do you have a contingency plan in case your major suppliers have a delivery problem?

- Bank: What are your plans for year 2000 problems?

- Home security systems: Is the system year-2000 compliant?

* Compile a sample list of contingencies for each category, along with suggested contingencies for specific risk ranking for an item in a given category.

* Monitor continually the risks of the few most critical items because they are likely to change.

A few days before December 31, 1999, journalists could, for example, publish an article on the front pages of major newspapers essentially stating that the banking system of a country--or worse, that a specific bank--is not year-2000-compliant. That could cause a major withdrawal of deposits.

GartnerGroup considers it plausible that--around December 1999 and January 2000--several central banks might issue withdrawal restrictions or a partial "freezing" of some accounts, or some areas might have to endure a few days without banks being open. This scenario must be taken into consideration.

A big concern for most individuals is the availability of cash as a contingency that automated teller machines and credit cards will not work after December 31, 1999. On August 10, 1998, the U.S. Federal Reserve announced an increase in inventory reserves primarily because of the year 2000 risk.

The U.S. Federal Reserve is taking prudent year 2000 contingency action to reduce risk during the rollover into the next century. It is increasing its monetary inventory reserves from $150 billion to $200 billion to cover anticipated demand caused by cash withdrawals made from banks due to the year 2000 situation and heavy holiday spending expected at the end of 1999.

Withdrawals made by the public are expected to be relatively small cash amounts whereby bank customers hope to cover critical expenses during a short millennium rollover period. Even though significant infrastructure and utility failures should be rare in the United States, the potential for some spotty regional problems may exist and must be considered. The Federal Reserve will increase reserves primarily to cover those risks.

Businesses and individuals should make preparations to deal with Y2K issues.

In the 1999 fiscal year (ending September 30, 1999), $460 Billion will be in circulation with $200 billion held in inventory--a more-than-comfortable safety margin. The Federal Reserve normally plans for peak spending and cash withdrawals during seasonal holidays and during natural disasters.

The increased inventory has already been planned, since the 1999 cash print order for the period of October 1998 thru September 1999 had to be placed. More money is being printed in larger denominations, and there is a provision to keep older bills in circulation, if necessary. In countries other than the United States, greater problems may develop.

In the United States, the banking industry, regardless of the bank size, has had the same detailed extensive regulatory oversight of its year 2000 process. The Federal Deposit Insurance Corporation has the same requirements for all of its member banks. Individuals should be aware that the year 2000 date change will not affect their deposit insurance coverage.