In a March 22 teleconference, Lou Marcoccio, Year 2000 research director at the Gartner Group [http://gartner5.gartnerweb.com/], revealed a growing trend in the way U.S. companies are thinking about -- and financing -- their Year 2000 programs.

Gartner Group analysts, said Marcoccio, are seeing a rapid shift in the pattern of corporate Year 2000 spending. In 1997, just 5 percent of corporate I.T. budgets was being allocated to Year 2000 compliance efforts. But in 1998, that percentage soared to between 15 and 30 percent. And with so many companies racing to implement last-minute fixes, analysts predict that this year it will reach 20 to 40 percent.

In the beginning, the Y2K battle was fought and funded mostly by corporate I.T. departments. But for large enterprises last year, the biggest change in Year 2000 spending occurred in the category of non-I.T. projects (such as business risk management and contingency planning). The Gartner Group estimates that in 1998, companies spent as much money on these projects as they did on remediation and other I.T. programs. Similarly, Gartner Group research found that over the past year, in 38 percent of large companies, "ownership" of Year 2000 compliance underwent a shift from I.T. management to business management. A year ago, only 5 percent of large companies had begun to look beyond I.T.

This shift in focus can be seen as a response to the severe time limitations companies are facing, with the millennium deadline less than 280 days away. Lack of time is forcing many companies to shorten the vital testing stage of their Year 2000 programs, or worse, to forego it altogether. From now until Jan. 1, 2000, contingency planning must proceed hand-in-hand with the more technical job of remediation.

Michael Erbschloe, director of research and analysis at Computer Economics Inc. [http://www.computereconomics.com/], offered a different explanation for the rise of non-I.T. Year 2000 spending. "In the beginning, most companies thought that Year 2000 issues could be addressed and managed effectively within their I.T. departments," he noted. "But now they're waking up to the fact that Y2K needs to be managed across the whole enterprise."