Back in America, more than a few people are stocking up on canned food and bottled water and will be heading for the hills on the eve of the millennium. Talking heads are predicting that computer problems will result in every calamity short of plagues of locust. Here in Japan, however, we see the opposite extreme. There is a general sense that, while perhaps something more could be done, if we all buy new computers and don't ask too many questions, everything will be all right.

Both positions represent utter nonsense, of course. Yet, they both stem from the same misconception - that the Y2K problem is a computer problem. Y2K is most emphatically NOT a computer problem. It is a risk-management problem and, for small- and mid-size businesses, a rather simple one. Yet it seems that no one really wants to see things that way.

In America, most Y2K coverage amounts to little more than writers seeking important electronic systems and speculating wildly about what would happen if these systems suddenly failed. It is a rare writer indeed who actually attempts to verify that the risk is significantly larger than zero and a rarer one still who attempts to quantify it.

The Japanese government's primary response to the Y2K issue has been to send out vague, voluntary surveys to businesses about what types of computers they use and the state of their Y2K compliance. On several occasions, government officials responsible for these surveys have stated that since Japanese offices rely more heavily on stand-alone computers, Y2K will be less of a problem here. The number of computers that will crash on January 1, 2000, will be a useless measure of the extent of the problem. Granted, we may have hundreds of thousands of computers crashing across the nation on that day, and that will be significantly more than the tens of thousands that normally crash every day, but the question that needs to be asked is how will these failures affect business's ability to operate, how much said failures will cost, and what can be done to reduce the impact?

The goal of a corporate Y2K-readiness program should not be to make sure that all the equipment in the enterprise is Y2K compliant. The goal is to minimize the amount of money that Y2K issues will cost the organization. That is the only goal. Now, if the best way of achieving that goal is to ensure that all your electronic systems and those of your suppliers are 100% compliant, that's fine. However, that is only one approach, and it is an expensive and less than comprehensive one. Even if you have programmers evaluate every line of code in every software program your company uses, you still would not know if you were Y2K compliant. Programmers make mistakes, and I've heard that bugs do occasionally slip into software. Besides, in many cases, attempting to certify that every piece of equipment and software is Y2K compliant would be far more expensive than allowing some systems to fail.

So how much is the Y2K problem going to cost? It's impossible to estimate the worldwide cost of Y2K-related failures, but the worldwide cost of Y2K readiness efforts is estimated to come in at over $600 billion. That is about $100 for every man, woman, and child on the planet. It's enough money to buy every citizen of Europe, America, and Japan a new PC or iMac and still have millions left over to give to Russia to help them finish Y2K testing their nuclear warheads. Even this mind-boggling large sum, however, pales in comparison to the expected costs of Y2K-related litigation. Estimates for this vary widely, but many place it over $1 trillion. That's right - the cost of litigation will most likely far exceed the cost of actually fixing the problems, and as such, litigation is a far larger part of the Y2K problem than are computer failures.

The saving grace for us here in Japan is that almost all of this legal action will take place in the United States. There is irony in this, and it defies all common wisdom. When viewed properly, it seems that the Y2K problem will be much less severe in Japan than it will be in America. Granted, far fewer systems will fail in the US, but the inconveniences experienced are likely to be greater in Japan. However, the total cost of the Y2K problem, which is to say the severity of the Y2K problem, will probably be much, much lower in Japan.

Next month, we will cover the specific steps that need to be taken to get your enterprise ready for the next millennium, and I think many will be amazed at how simple the process really is when Y2K is viewed as the risk-management problem it is.

Vanguard KK, has developed Y2K-COPE. Y2K-COPE is free software that can greatly assist in the process of locating potential Y2K-related problems and developing contingency plans for them. Those who wish to get started right away - which should include all readers who have not already started - can download Y2K-COPE at http://www.vanguardjp.com/y2k. Despite what you are hearing in the press, there is still time to get ready. Next month, I'll explain how.

Tim Romero writes on Internet and software development issues. He can be reached at t3@t3y.com.