Dealing with Y2K computer compliance with regards budgetary planning and control

Abstract

By means of this dissertation I tried to assess the extent of the effects of the Y2K on the budgetary planning aspect of organisations and raise the awareness about the Year 2000 within this environment although it is a bit too late. ‘The year 2000 problem is not an IT problem, but a business problem.’ The management accountant must keep in mind that when drawing up the sales budget, customers’ Y2K compliance should be assessed. Similarly, the production budget should review suppliers’ compliance and in-house production. Other sub-budgets may be effected in other ways. It is of outmost important that the management accountant realizes the extent of Year 2000 influence and should act upon them immediately. Unfortunately, although the level of awareness is high, quite a large number of managers still do not realise the possible repercussions of the Year 2000. They still see it as an IT problem, so when planning and drawing up their yearly budgets, the Year 2000 was not given the weight it deserved. In my dissertation I also discussed how certain organisations tackled their Year 2000 problem step by step. This would have been a useful guide had the timing been better. One hopes that no organisation is still in the process of planning its Year 2000 strategy. Also, concluding remarks include some recommendations and suggestions to management mostly regarding budgetary planning, testing and contingency planning. Unfortunately, most organisations will be testing their systems in real life situations at the actual turn of the century, thus contingency planning is vital. Moreover, bearing in mind that no matter how efficient some organisations might have been in dealing with the Y2K problem, they still depend on their suppliers of raw materials and services (water, electricity, communications, etc.) for their sustainability. Contingency planning regarding their suppliers, in the context of the possibility that they will not be compliant, is of utmost importance. However, once again, this is not given the importance it deserves.