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Commercial Marketplace 1999


Commercial Marketplace 1999
February 18, 1999

Y2k: Out of sight, but not out of mind

BOMA International

It's virtually impossible to ignore the headline warnings being splashed across newspapers and magazines throughout the world announcing the fast approaching "Millenium Bug" - the inability of computer software to recognize the digits 00 as representing the year 2000 instead of 1900.

It is feared that when Jan. 1, 2000 arrives, non-compliant computers will crash, taking data and company operations down with them. Problems can range from inconvenient to life threatening.

Consumers are already beginning to see how the problem might affect them; many retail store cash registers are rejecting credit cards expiring in 00, leaving shoppers empty-handed. Meanwhile, the U.S. Federal Aviation Administration has openly admitted that air traffic control safety could be at risk, and the Internal Revenue Service's always-troublesome computers may be woefully behind.

Politicos even predict that United States Vice President Gore may have trouble in his election campaign if Year 2000 solutions for government entities are not found soon, since technology and the "Information Highway" have long been among his mantras. Meanwhile, the Y2K problem has spawned a new industry for information technology companies, Web sites and consultants.

For an idea of how widespread the Y2K problem could be for building owners and managers, consider this partial list of building systems which could be affected:
HVAC controlsElevators
ThermostatsSecurity systems
ChillersSmoke detectors
ValvesBuilding and parking access systems
FiltersFax machines
Leak detectorsLocal area networks
Underground storage tank monitorsWide area networks
LightsPower generators
Postal scales and metersf
The commercial real estate industry will clearly not be spared. The primary concern for office buildings is due to the presence of "embedded systems" in buildings.

An embedded system is the term used to describe equipment that is controlled by a microchip. Any building system controlled by a chip that is data sensitive could conceivably mistake Monday, Jan. 1, 2000, for Saturday, Jan. 1, 1900.

Adding to the difficulties posed by embedded systems is the fact that they represent a different kind of challenge than off-the-shelf or custom written software because the embedded microchips were not designed for manual adjustment. Making a microchip Y2K compliant is not as easy as changing code on a software package. Elevators, for example, do not come attached to keyboards and monitors!

Confusing the issue even more is the fact that information on the Year 2000 readiness of this type of equipment is not typically at the disposal of property professionals. Property managers must contact manufacturers and work with them to examine, test and possibly replace non-compliant chips with Y2K ready ones. Not doing so could spell trouble, with massive safety, insurance and legal ramifications if systems fail to operate properly.

Assuming that real life examples are better illustrators than general theory, let's take some relatively simple examples to show how destructive embedded systems could prove to be for the commercial real estate industry.

Imagine that a tenant's lease began on June 1, 1995, and runs through June 1, 2000. When asked to calculate the lease payment due on Jan. 1, 2000, the computer compares the dates as it always has, except now the lease appears to date back to June 1, 1900. The following scenarios are possible:

  • The computer may conclude that the lease is non-existent
  • The computer may decide to bill the tenant for 95 years of back rent
  • The computer may reject the data and crash, taking other systems with it.

Problems could crop up before the century date change if the program looks ahead by calculating elapsed time. Take a property management program that schedules maintenance activities based upon the last time the given system (elevator, boiler, chiller) was serviced. If the next scheduled maintenance activity comes after Jan. 1, 2000, the computer may foresee the date incorrectly and decide that maintenance is no longer called for - or conclude that the next servicing will be required in 100-plus years.

At the very least, imagine if tenants were to arrive at their offices and be unable to get into the parking lot, get into their suite, or find that they have no heat or phone service. Any of these scenarios, pose serious problems for tenant satisfaction and could seriously impact a tenant's business if they are not fixed quickly.

A detailed plan of attack is needed to ensure that the myriad of details are addressed and communication with tenants and other business partners remains consistent. BOMA International has published Meeting the Year 2000 Challenge: A Guide for Property Professionals. Full of checklists and common sense advice for tackling this problem, the guidebook breaks the project into an eight-step process.

1. Educate senior management

The Year 2000 problem is not just a challenge for the Management Information Services department. It has significant operational, legal and financial implications, requires a team effort, will undoubtedly be expensive, and needs top level support from senior management and owners themselves. If senior management does not understand the gravity of the problem, it is unlikely that a solid plan can be implemented, and ignoring the problem may have dire consequences.

2. Designate a Year 2000 manager

Someone must oversee your company's information gathering process and serve as the point of contact. Select an individual who has strong knowledge of the company and its properties, has a practical understanding of both IT (information technology) and non-IT (embedded) systems, is an excellent communicator, is extremely well organized and not given to panicking.

3. Inventory systems

The assumption here is that you cannot fix problems you do not know exist, so taking inventory of all building-related systems is crucial. Property or building managers should provide information such as how many of each type of equipment or system is installed in the building; who is the product's manufactur-er/installer; when was the equipment purchased; and what are the relevant model names and serial numbers. Keep in mind that records may be difficult to obtain, especially if buildings within your company's portfolio have changed ownership, a very real likelihood in today's world of mergers and acquisitions.

4. Contact your suppliers

Because computer chips are embedded within building equipment, fixing them is not so easy because you can't change code in an elevator like you can change code on your PC's software! Contact all of your suppliers to find out if the systems they manufactured or installed contain date-sensitive microprocessors and what it will take to make them Year 2000 compliant. Don't forget to also contact the firms that produced the financial management, energy management or property management software that your company runs.

5. Prioritize problems

This step involves making some decisions about what building-related systems need to be addressed first: Should elevators have a higher priority than escalators? Fire alarms a higher priority than building access systems? Ask yourself how essential each system is to the smooth operation of the property, both from an operational standpoint and a tenant satisfaction standpoint. Setting priorities are important for dedicating resources.

6. Anticipate contingencies

Step six is the Murphy's Law of the Y2K eight-step process. Evaluate scenarios ranging from doors not opening to the HVAC not functioning and prepare alternative measures to meet tenants' needs. Once you have devised a contingency plan, be sure to provide all property and building managers with a copy to ensure that should it be necessary, everyone will be singing from the same song sheet and will know how to implement the contingency plan.

7. Identify solutions

Doing nothing certainly isn't an option, so property owners basically have two basic options: replace or retrofit. Due to the inherent difficulty of swapping out embedded chips, replacement is the more likely course of action - if the system is indeed at risk of Y2K problems. Fortunately, your company's remediation effort need not bust the budget. Consider drawing funds from computer maintenance and equipment upgrades already planned, or by preempting some upgrades and new systems that would otherwise be pursued.

8. Test the solutions

Never assume your Y2K "fix" will work. Test the solutions by feeding systems the date 010100 (and 022900; 2000 is a leap year, and 1900 was not) and see what happens. Ideally, the equipment will operate properly. But don't accept the manufacturer's or consultant's word that the fix will work. Verify it yourself, in the building. This final step of the plan could well be the most resource intensive of all. Your company may need to budget up to 50 percent of its Y2K resources for this final phase.

The Y2K challenge is by no means a simple one, but taken step by step, can be made manageable. Consider too that over the past decade, property professionals have successfully navigated a range of imposing challenges: the Americans with Disabilities Act, the phaseout of chlorofluorocarbons and the deregulation of telecommunications services. All have been managed effectively by making informed decisions and carrying out a well-defined action plan.

The Year 2000 problem is essentially no different. But the deadline is fixed and immovable, making the development of a management plan even more urgent.

Single copies of Meeting the Year 2000 Challenge: A Guide for Property Professionals are $15 for BOMA members and $20 for nonmembers. Quantity discounts are available. Guidebooks can be ordered by calling (800) 426-6292 (reference number 144-Y2000-593-029).

Bill Garland is president of Building Owners and Managers Association International.


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