Dr. Massimo Abbate

(Responsible of Organization and Resources, CONFAPI)

I represent Confapi, the Italian Confederation of Private Small and Medium Enterprises (SME).  Our Confederation, which is present throughout the country through its own Associations, represents and supports interests and development of small and medium enterprises, which are a vital asset for our productive system.

Confapi has grown along with  the Italian small enterprise system, and today it is a reality that represents about 60,000 firms employing about one million workers.

Confapi has been effectively dealing  with the problems connected with Year 2000 I.T. system conversion since May, 1998.

At the time, our Provincial Associations sent out the first warning notes to their associates.

The earliest associated firms to become aware of the problems were those that operate within the supply-chain of large industrial corporations, particularly within the engineering and automobile sectors.

Such large corporations, as a part of their Year 2000 conversion program, had been requesting supplier's date change I.T. system compliance certification.

This has brought our associates to perceive the Year 2000 conversion as both an internal requirement and an externally mandated responsibility.

It must be kept in mind that for a small business, already affected, in recent years, by investment slow down and therefore employing older I.T. systems, converting its critical systems for the date change is often tantamount to investing in equipment, hardware and software replacement.

Year 2000 I.T. system conversion comes, for our small and medium enterprises, at a time of economic crisis that has forced the same to shoulder the whole of the conversion cost, and has pushed downsizing and re-structuring process. 

An additional tie that has adversely affected Year 2000 conversion program management, is cultural and organizational in nature.  Italian SMEs had to confront with problems originated by their traditional lack of planning procedures, inexperience in dealing with short term objectives and inability to handle complex programs.

On the other hand, some peculiar aspects that characterize the Italian industrial system as compared with that of other OCSE countries, have played to its advantage as concerns date change system conversion.

Small and medium Italian enterprises operate mainly within such medium-low technology sectors as the mechanical and textile.  This adds up to an information technology investment level that is lower than that of other OCSE countries. Due to a rigid labour market,  managements tend to introduce, into the production process, only  those new technologies that may be promptly used by the existing workforce.

These facts may be suggestive of a lower exposure, albeit for the very same reason highly underestimated.

After review of the general picture, Confapi has come to define its initiatives towards its associates for the Year 2000 challange.

Four, are the main objectives that top the prioritiy list:

• to raise Year 2000 Problem awareness level within the associates.
• to outline all facets of the problem.
• to provide guidance to the associates
• to represent SME's interests at the institutional level.

To raise associate awareness level Confapi, through its local Association network, has sent out information notes to the associates recalling their attention onto the Year 2000 related problems and the procedures to be enacted to prevent negative effects.

Some of the local Associations have been particularly active in providing specific information to specific associate sectors. The purpose of these activities was to pin point some critical areas that could have been overlooked by earlier assessment.

To obtain a detailed assessment of the Year 2000 Problem, Confapi has recently completed a questionnaire survey of its associates.  The questionnaire contained a number of questions for the assessment of Year 2000 conversion progress status.

Questionnaire distribution took place three months after the sending of the information notes so that the effectiveness of the former initiative could be verifyed.

The sample of 650 respondents whom have returned a compiled questionnaire includes 80% of small and 20% of medium firms, and it is fully indicative of the reality represented by our Confederation.

The results provide a picture on small and medium firm Year 2000 conversion progress that appears far too reassuring:

The only worrying data seems to be that relating to emergency planning,  the so called "contigency plans".  Only 36% of the respondents have stated that they have a plan in place in case of date sensitive system failure.

In any case, the impression is that firms underestimate the extent of the Year 2000 Problem, and consider only aspects concerned with the use of personal computer and network server.

Problems connected with compatibility of badge, digital control equipment, security and safety equipment and, in general, all equipment that use date control, seem to be perceived to an inadequate extent.

From Confapi, therefore, a clear indication comes today of what it must be the immediate objective of  the initiatives directed to minimize the negative impact of the Year 2000 Problem:

Naturally, special care should be taken in conveying information so as not make of it an act of "psychological terrorism", that may unleash irrational reactions which, globally, might bring about greater damage than the millennium bug itself.

This is one of the reasons why Confapi considers highly beneficial its cooperation with Italy's Institutional Year 2000 Authorities.  We strongly believe that the damage to business and the economic system as a whole which may result from incorrect information, could be greater, much greater than that directly connected with the Year 2000 Issue itself.

Confapi and business Associations are, in general, well known and trusted within the business community.  It is, therefore, of the utmost importance that the association system be involved in the information process.

The Association channel is one that is traditionally used by firms in problem solving, and they must therefore be involved if a Year 2000 information strategy is to be effective.

Confapi next step: the large picture as an opportunity

On our part, the Confederation's efforts are already pointing forward in search of a deeper business perception of the Issue.  In particular, we shall endeavor to draw the attention of our associates upon date change compliance of business digital control equipment.

Further efforts will be devoted to conveying a perspective of the problem that be not limited to company internal aspects, but open to the reality that characterizes the italian industrial system,  that of the industrial districts.

From equipment compliance assessment, a wider assessment is required that should concern all of the sector processes.  This approach has the advantage of pin-pointing the opportunities, other than the cost,  that arise from the need to convert the systems for the date change.

Firms will have a chance to review internal process organization and sector interaction in a systematic fashion.  From this analysis, fresh opportunities could be seized for higher management and organizational standards to be achieved.