Hamilton Rotarians were told it may constitute the most expensive single problem in human history.

Industry pundits estimate that as many as 30 percent of companies will suffer severe financial consequences because they will not be fully compliant in time.

Other predictions include the potential crash of the stock market, disruption of telecommunications and computer networks, the breakdown of transportation systems, the interruption of global banking transactions and the crippling of the US Internal Revenue Service.

Costs for a cure are rising and computer products with the bug are still being sold to the unsuspecting. There are already estimates that it could cost a trillion dollars in business interruption and related litigation.

Director of technology/management consulting at Ernst & Young, Joseph Feller-O'Neill, said the computer industry's biggest challenge is underway to convert systems to calculate transactions involving the year 2000 and beyond.

And even if a company's systems are amended and prepared for the year 2000, their interaction with other non-compliant systems, for example through electronic data interchange (EDI), could create a problem.

He said the millennium problem is a business problem and managers and executives should not be fooled into thinking that it is only a problem for "techies'' to solve.

An established organisation could easily be spending $6 million to get it right before the year 2000, he said. And fixing the problem is not optional or just advisable, but mandatory for business survival.

Mr. Feller-O'Neill said management issues include: determining which systems cannot be changed and must be replaced or outsourced; the acquisition of duplicate development and test computer systems while the old system is still on line; the quantification and budgeting for the change; the lack of a standard way of defining an individual company's needs and costs; and, the lack of in-house expertise and resources to fix the problem quickly.

He said: "More painful than the expenditure will be the securing of the resources necessary to ensure all required changes have been made, thoroughly tested and implemented before the deadline, which, unlike most business deadlines, no-one can move.'' The roots of the "millenium bomb'' lies in a sleeping problem embedded in millions of ageing software applications. Just two digits have been used to record the year date in computers. Thus the year 1997 was recorded as 97. But with the approach of the year 2000, it could lead to a host of problems.

Mr. Feller-O'Neill emphasised the best solutions will be tailor-made for each business, through thorough planning and a resource management plan to ensure an ability to limit business disruption. He assured there will be some interruption.

He would not rule out the possibility of companies contracted to fix one firm's computer problems, abandoning the work to take up a more lucrative contract.

"The strategy must cover the risk and legal positions of the business, to ensure it is able to carry out the work and to protect its position commercially in a market where there is a substantial risk of being held at ransom, as the cost of services involved is predicted to rise threefold or more by the year 2000,'' he said. If the problem is not fixed, he added, errors in software associated with finance, insurance, taxation and a host of others could lead to the most expensive litigation in human history.

He quoted an article in the American Bar Association journal which said: "Forget the savings & loan crises, the environmental movement and the tobacco wars -- lawyers, this could be bigger than any of them, or even all of them combined.'' Warning given on millenium bomb The problem is that every line of the computer programme code has to be checked and corrected, and in some cases, the problem is not software, but hardware containing a chip which is incapable of holding or updating a date in the year 2000.

Mr. Feller-O'Neill said several types of litigation can result from the issue, including lawsuits: Filed by clients whose finances or investments have been damaged; By shareholders of a company whose software does not safely make the year 2000 transition; Associated with death or injury derived from the problem; and class-actions by various affected customers of computers, software packages and computer-based services.

He said these areas will often involve legal defences by insurers, costing billions of dollars in legal fees and damages. But he argued that for practical purposes, the use of litigation will be counter-productive.

"It is vital that both users and suppliers engage in a problem-solving approach which achieves a technical, business and legally sound solution,'' he said.

"For example, if a supplier of a system that is non 2000 compliant has a number of claims made against it by users, the supplier may have no option, but to go into liquidation.

"It is clear that the wrong response to the millennium problem is, metaphorically, for companies to put a hole in the only lifeboat available.'' BUSINESS BUC