Millennium Programme costs
The effort associated with the Millennium Programme falls into two main categories:
1) The diversion of existing internal resources. This includes development staff who would otherwise be deployed on other projects and operational staff involved in the implementation at customer sites.
2) Incremental external resources, largely contractors and consultants, who will not remain following the completion of the programme.
Details of the costs incurred in 1998 and budgeted for 1999 are set out below.
| Costs (£m) | 1998 | 1999 budget |
|
| Internal effort | | |
| – Development | 10 | 6 |
| – Implementation | 14 | 8 |
| External effort | | |
| – Development | 18 | 7 |
| – Implementation | 13 | 7 |
|
| Total | 55 | 28 |
Internal and external costs for 1998 were in line with expectations. Incremental capital expenditure arising as a direct result of the programme was £33 million in 1998. No estimation of the cost of assets replaced in the normal business cycle has been made.
The 1998 internal development effort of £10 million represented 5% of total group development expenditure. The £14 million of implementation activity represented 8% of client site activity. Accordingly, Reuters believes that the Millennium Programme has not resulted in any material deferrals of product developments or decreases in service quality at client sites. As internal resource plans have considered Millennium Programme requirements since 1996, it is not possible to assess whether forthcoming product development might have occurred sooner in the absence of this programme.
No material costs are currently projected for the year 2000 or beyond. However, due to the number of variables and dependencies involved, Reuters does not consider it possible to identify, avoid or quantify the damage that could result from all possible millennium-related problems.
Reuters has used, and expects to continue to use, internally generated funds to cover the cost of the Millennium Programme.
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