Advanced Software Engineering (ASE) is warning Australian companies that the limited vision they have of Y2K conversion as being the sole dilemma facing IT departments is unrealistic and dangerous in the face of the upcoming goods and services tax (GST).
Bruce Nixon, managing director of ASE, is adamant that unless businesses start to develop solutions to include the GST in their application logic now, it will be too late to undergo the transformation of such a complex system.
"Many large Australian companies still have their core systems written in COBOL and these are one-off applications. These systems are most at risk," claims Nixon.
The cost of ensuring systems are GST compliant is going to further burden budgets already under stress from Y2K operations. Nixon is anticipating that large Australian companies, such as banks, will need to outlay the equivalent of an estimated $US100 million to avoid adversely affecting systems such as supply-chain management and sales.
Despite this, Nixon believes that companies need to stop thinking of GST issues as secondary to Y2K compliance and to begin to comprehend the seriousness of the situation. "What disturbs me is how little attention this problem is getting. [Industry researcher] Gartner estimates 44 per cent of IT budgets will go to solving Y2K problems in 1998, and that's not the sort of figure that indicates corporations are contemplating GST compliance seriously."
Nixon is adamant that companies cannot prioritise the two issues. "Some big companies will take it as normal maintenance but there are so many issues, what with the euro transition, Y2K and the GST that there is a great opportunity for channel players to help them," Nixon adds.
Nixon is envisaging that IT experts now focused on Y2K issues will include GST solutions in their services and divert already proven formulae into providing GST solutions.
Nixon insists that the process is necessary, despite the lack of details forthcoming on the specifics of the GST. "Knowing the final details of what is included in the GST is not essential for determining problem areas with applications," he claims.