Corporate America is slowly waking up to the shocking prospect of having to sink between $300 billion and $600 billion to fix the year 2000 two-digit stumble. Now another $200 billion of avoidable annual expense is coming to light. And money isn't the only thing at stake. The credibility and reputations of IS managers, IT vendors and consultants also are at risk.

Thanks to the year 2000, corporate executives are wondering if their trust in technical experts was warranted all along. It's finally dawning on the top brass that their computer managershaven't properly maintained their companies' software assets, even though the millennium problem was foreseeable. CEOs have resolved to never again be forced to spend money on something that prudent IS managers could have avoided. No more surprises, please!

The Next Nasty Surprise

Although the details remain fuzzy about which costs are included and how much of those will be real and how much will be virtual two simple messages captured the CEOs' attention:

Stripped-down versions of PCs (now called network computers just to make a distinction that carries a minimal distinction) are as much as 41% less expensive than the PCs the company just installed after much intraorganizational strife.

If an organization doesn't want to buy network computers, it can still realize savings of up to 26% just by managing its installed base of PCs better.

It's the second message that gets a good hearing from CEOs. A few simple calculations show that, using one of Gartner's lesser estimates, the savings could amount to $2,860 per PC per year.

If you consider that networked computers in U.S. companies and public-sector organizations will total an estimated 65 million to 75 million by the end of next year, the savings add up to a hefty $200 billion.

The Gartner estimate is reasonable. I've found such opportunities to save money in companies wherever seasoned computer professionals have given up the custody of the PC playgrounds to enthusiastic office amateurs.

That raises an inevitable question: Why haven't the computer managers found a way to avoid such excessive spending on PCs to begin with? A saving isn't a saving if it eliminates something that could have been avoided. One doesn't save money by stopping foolishness.

The business world is sure to ask this $200 billion question; it's too large a sum to ignore. Add it to the cost of fixing the year 2000 problem if you assume it will cost only $300 billion and you get about $513 billion, equal to the pretax 1995 profits for the 2,992 U.S. corporations in my database. That accounts for about 87% of the U.S. gross domestic product.

And $200 billion per year also would pay for almost all the annual software development and maintenance costs last year. The idea of cutting avoidable costs is clearly one whose time has come. But will that be the only topic on the top executives' agenda?

A Matter Of Trust

Executives also will start to wonder what may show up next. Can they trust the counsel that advised them to move from mainframes to PCs, from PCs to client/server, from client/server to Internet, from Internet to intranet to outsourcing, and now back to mainframes-in-disguise as network computer controllers?

The intoxicating computer-guzzling party is coming to a climax. Top managers still treat information as an unavoidable expense and hate any costly, avoidable surprises. The emerging sense of distrust will begin in the U.S. and spread worldwide. CIOs, consultants and vendors will be equally affected. CIO turnover, already excessive, will accelerate. Consultants may have to offer insurance coverage or performance bonds to get new business.

This distrust won't diminish the role of computers in society. But it will sober up executives who have become inebriated with technocompulsions during 50 years of unjustified squandering of a valuable tool. It will augur a discernible shift in expectations from hopeful promises to demonstrable results. There will be little tolerance for any IS executive who wastes money to fix avoidable problems.

Strassmann's new book, The Squandered Computer (The Information Economics Press, April 1997), explains why a new era in information management practices is dawning. His E-mail address is paul@strassmann.com.