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Information Technology and the Year 2000 Problem - Is the Victorian Public Sector Ready?

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Information Technology and the Year 2000 Problem - Is the Victorian Public Sector Ready? PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE TWENTY-SIXTH REPORT TO PARLIAMENT INFORMATION TECHNOLOGY AND THE YEAR 2000 PROBLEM - IS THE VICTORIAN PUBLIC SECTOR READY? NOVEMBER 1998 Ordered to be printed VICTORIAN GOVERNMENT PRINTER 1998 No. 24 Session 1998 Table of Contents Membership of the Committee.....................................................................i Membership of the Sub-Committee ............................................................ii Duties of the Committee.............................................................................iii Glossary......................................................................................................iv Chairman’s Introduction...........................................................................xiii Executive Summary...................................................................................xv Recommendations ...................................................................................xxv CHAPTER 1 : INTRODUCTION 1.1 Background to the Inquiry...................................................................1 1.2 What is the Year 2000 problem?.........................................................1 1.3 Why is the Year 2000 problem significant?........................................2 1.4 The Inquiry process.............................................................................6 1.5 Process followed by the Committee....................................................6 1.6 Structure of the report .........................................................................9 CHAPTER 2 : LEVEL OF AWARENESS OF THE YEAR 2000 PROBLEM IN THE VICTORIAN PUBLIC SECTOR 2.1 Introduction .......................................................................................11 2.2 Victorian Government initiatives......................................................11 a) Policy Guidelines and Standards ................................................13 b) Annual Reporting Requirements.................................................13 c) Summary of Government Year 2000 initiatives .........................14 2.3 Commonwealth and international government activities .................14 a) Office of Government Information Technology.........................15 b) Year 2000 National Steering Committee....................................16 c) International Council for Information Technology in Government Administration ...................................................16 2.4 Survey Results...................................................................................18 2.5 The scope of the problem..................................................................21 2.6 Ownership of the Year 2000 problem...............................................22 2.7 Summary ...........................................................................................23 CHAPTER 3 : THE RISKS ASSOCIATED WITH THE YEAR 2000 PROBLEM 3.1 Possible consequences ......................................................................25 3.2 What risks does the Victorian public sector face?............................26 3.3 Strategies to reduce risk ....................................................................26 3.4 What the Committee found ...............................................................27 3.5 Dealing with external parties ............................................................29 3.6 Contingency plans.............................................................................32 CHAPTER 4 : THE COST OF ACHIEVING YEAR 2000 COMPLIANCE 4.1 Introduction .......................................................................................37 4.2 Year 2000 survey results...................................................................38 CHAPTER 5: ADEQUACY OF PLANNING FOR THE YEAR 2000 PROBLEM 5.1 International best practice .................................................................45 5.2 Survey results ....................................................................................46 a) Compliance plans........................................................................47 b) IT and embedded chip inventories..............................................49 c) Risk Exposures............................................................................50 d) Approach to Year 2000...............................................................51 e) Date of expected completion.......................................................51 CHAPTER 6 : IMPLEMENTATION, MANAGEMENT AND MONITORING STRATEGIES 6.1 Introduction .......................................................................................53 a) Planning Phase ............................................................................53 b) Assessment Phase........................................................................53 c) Conversion Phase........................................................................53 d) Implementation Phase .................................................................54 6.2 Survey results ....................................................................................54 6.3 Managing business critical services..................................................55 6.4 Industry coordination ........................................................................56 6.5 Monitoring Year 2000 compliance ...................................................57 6.6 Real life compliance testing..............................................................58 6.7 Project Management..........................................................................60 6.8 Leadership .........................................................................................62 6.9 Retention of IT resources ..................................................................65 CHAPTER 7 : SERVICE AGREEMENTS AND CONTRACTS 7.1 Introduction .......................................................................................69 7.2 Contract requirements .......................................................................70 7.3 General conditions for supply of goods and services .......................70 7.4 Agreement for professional services.................................................72 7.5 Year 2000 warranty...........................................................................74 7.6 The GITC3 Year 2000 clauses..........................................................75 7.7 Current government purchasing initiatives.......................................76 CHAPTER 8 : THE LEGAL IMPLICATIONS OF THE YEAR 2000 PROBLEM 8.1 Introduction .......................................................................................79 8.2 Overview of legal issues ...................................................................80 a) Providers of defective software...................................................80 b) Suppliers of Year 2000 remediation services .............................80 c) Failure to disclose a Year 2000 problem ....................................81 d) Suppliers affected by Year 2000.................................................81 e) Insurance claims..........................................................................81 f) Indirect Year 2000 failures .........................................................81 g) Breach of warranty......................................................................82 h) Service providers.........................................................................82 i) Building owners ..........................................................................82 8.3 Legal liability ....................................................................................82 a) Directors’ duties..........................................................................82 b) Negligence...................................................................................83 c) Contract .......................................................................................83 d) Consumer protection ...................................................................84 e) Occupational health and safety ...................................................84 8.4 Cooperation and sharing of Year 2000 information .........................85 8.5 Good Samaritan legislation...............................................................87 a) Year 2000 Liability and Antitrust Reform Bill...........................87 b) Year 2000 Information Disclosure Bill.......................................90 c) Year 2000 Information and Readiness Disclosure Act...............92 8.6 Copyright issues ................................................................................94 8.7 Documenting Year 2000 activity ......................................................97 CHAPTER 9 : COMMUNITY ASSURANCES 9.1 Introduction .....................................................................................101 9.2 Preparedness of the private sector...................................................102 9.3 Assurances for the community........................................................103 9.4 Performance against international best practice .............................104 9.5 Conclusion.......................................................................................106 APPENDICES Appendix 1 : List of embedded chip devices with date-sensitive systems ...........................................110 Appendix 2 : List of submissions........................................................112 Appendix 3 : Letters to Ministers from the Committee ......................117
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