FCR(98-99)17
For discussion
on 17 July 1998ITEM FOR FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Census and Statistics Department
New Subhead "Rectification of the computer systems of the
Census and Statistics Department for Year 2000 compliance"
HEAD 26 - CENSUS AND STATISTICS DEPARTMENT
Subhead 001 Salaries
Members are invited to approve -
- a new commitment of $28,899,000 for rectifying the computer systems of the Census and Statistics Department for Year 2000 compliance; and
- an increase in the ceiling placed on the total notional annual mid-point salary value of all non-directorate posts in the permanent establishment of the Census and Statistics Department in 1998-99 from $389,838,000 by $7,208,160 to $397,046,160 for creating 17 non-directorate posts for the implementation of the proposed project.
PROBLEM
A number of computer systems of the Census and Statistics Department (C&SD) are not fully Year 2000 (Y2K) compliant; if not rectified in time, this will impair the operations of the department and its services to the public.
PROPOSAL
2. The Commissioner for Census and Statistics, in consultation with the Director of Information Technology Services and with the support of the Secretary for Financial Services, proposes a non-recurrent commitment of $28,899,000 to rectify the computer systems of C&SD to ensure Y2K compliance.
JUSTIFICATION
3. C&SD uses information technology widely to support its day-to- day operations for providing statistics-related services to the public and other user departments. These include computer systems for producing the Statistics on Labour Force, Employment and Wages, Social Statistics, Trade Statistics, National Income, Prices Statistics, Industrial Production Statistics, Statistics on Distribution and Services and Census and Demographic Statistics, etc. From May 1997 to May 1998, C&SD conducted a technical study on Y2K compliance for the existing computer systems of the department. The results indicate that a total of 113 computer application systems comprising 5 169 programmes are non-Y2K compliant and require rectification. Meanwhile 604 machines and 189 system software types are also non-Y2K compliant and require replacement/upgrading.
4.To ensure that the computer systems of C&SD can continue to function efficiently and effectively, the affected hardware, system software and application programmes must be rectified before the turn of the century. The scope of rectification work required covers -
- replacing six non-Y2K compliant mid-range machines by two Y2K compliant mid-range machines;
- upgrading/replacing 33 PC-LAN servers, 548 PC workstations and 17 sets of equipment supporting the backbone infrastructure;
- upgrading/replacing about 189 types of system software; and
- modifying/converting about 5169 application programmes to make them compatible with the upgraded system software and hardware.
5. If the proposed rectification is not implemented, many of the computer systems in the department will not be able to function properly. As a result, the statistics produced will be error-prone and the release of the statistics cannot be as timely as scheduled. This will have significant implications for both the government and the private sector as many of the official statistics are the bases for monitoring the performance of the economy, formulating policies and strategic plans and making major business decisions. Disruption to the release schedule of official statistics will also affect our ability to fulfil the commitment to comply with the requirements of the Special Data Dissemination Standard established by the International Monetary Fund. These will undermine Hong Kong's image as a leading financial and business centre.
Cost-benefit analysis
6. The proposed rectification work is essential in ensuring the continued effective operation of the various computer systems in the department in the Year 2000 and beyond. The normal cost-benefit analysis is therefore not entirely applicable in this case. However, the timely release of accurate statistics will bring about substantial benefits by facilitating strategy and policy formulations and major business decisions.
FINANCIAL IMPLICATIONS
Non-recurrent expenditure
7. The Commissioner for Census and Statistics estimates that the implementation of the proposal will incur a non-recurrent cost of $45,468,000 over a three-year period from 1998-99 to 2000-01. This comprises $28,899,000 for the acquisition of computer hardware and software and related services and $16,569,000 for additional in-house staff for planning and implementing the project. Detailed breakdowns are as follows -
|
|
1998-99
|
1999-2000
|
2000-01
|
Total
|
|
|
$ million
|
$ million
|
$ million
|
$ million
|
|
|
(a)
|
Hardware and site preparation
|
9.27
|
-
|
-
|
9.27
|
|
|
(b)
|
Software
|
6.10
|
-
|
-
|
6.10
|
|
|
(c)
|
Implementation services
|
0.55
|
-
|
-
|
0.55
|
|
|
(d)
|
Training
|
0.56
|
-
|
-
|
0.56
|
|
|
(e)
|
Contract and temporary staff
|
6.47
|
3.33
|
-
|
9.80
|
|
|
(f)
|
Contingency
|
2.29
_____
|
0.33
____
|
-
____
|
2.62
_____
|
|
|
Sub-total
|
25.24
_____
|
3.66
____
|
-
____
|
28.90
_____
|
|
|
(g)
|
Staff costs
|
9.89
_____
|
5.64
____
|
1.04
____
|
16.57
_____
|
|
|
Sub-total
|
9.89
_____
|
5.64
____
|
1.04
____
|
16.57
_____
|
|
|
Total
|
35.13
_____
|
9.30
_____
|
1.04
____
|
45.47
_____ |
8. As regards paragraph 7(a), $9.27 million is for the acquisition and installation of computer hardware, site preparation and the acquisition of consumables and backup tapes, etc.
9. As regards paragraph 7(b), $6.10 million is for the acquisition of computer software.
10. As regards paragraph 7(c), $0.55 million is for the acquisition of expertise and consultancy services for the implementation of the project.
11. As regards paragraph 7(d), $0.56 million is for training of the project teams on using the upgraded/replaced/modified hardware and software.
12. As regards paragraph 7(e), $9.80 million is for employment of contract staff (74 man-months of Contract System Analyst, 76 man-months of Contract Programmers) to supplement Analyst/Programmer grade staff and for employment of temporary staff (150 man-months of temporary Statistical Officer II, 14 man-months of Assistant Clerical Officer) to supplement Statistical Officer grade staff in carrying out the Y2K rectification work.
13. As regards paragraph 7(f), $2.62 million represents a 10% contingency on the cost items set out in paragraph 7(a) to (e).
14. As regards paragraph 7(g), $16.57 million represents the total staff cost comprising 323 man-months of C&SD staff. Of this requirement, C&SD will absorb 121 man-months which is equivalent to $5,605,000 staff cost by internal redeployment. A breakdown is at Enclosure 1. For the additional 202 man-months which is equivalent to a staff cost of $10,964,000, we need to create 17 additional posts at a total notional annual mid-point salary value of $7,208,160 and to increase the establishment ceiling of C&SD accordingly. Details are set out at Enclosures 2 and 3.
Recurrent saving and expenditure
15. We estimate that the additional expenditure for maintenance arising from the rectification work is $0.84 million for 1998-99, rising to $2.54 million in 2003-04. However, as from 1999-2000, this additional cost is more than offset by the reduced maintenance cost of the existing non-Y2K compliant hardware. We expect that there will be a net saving of $2.35 million in 1999-2000, rising to $2.79 million in 2003-04. Details are at Enclosure 4.
Implementation Plan
16. C&SD plans to implement the proposal according to the following schedule -
|
Major activities
|
Target completion date
|
|
|
(a)
|
Formation of project teams
|
August 1998
|
|
(b)
|
Site preparation
|
October 1998
|
|
(c)
|
Procurement of hardware and software
|
January 1999
|
|
(d)
|
System upgrade/replacement, programme
modification 1 and testing
|
June 1999
|
|
(e)
|
Post-implementation monitoring
|
December 2000 |
We will draw up comprehensive test plans to ensure that Y2K compliance will be achieved by June 1999. Since some of the systems will not need to handle Y2K date until mid or late 2000, post implementation monitoring actions will be continued until December 2000.
BACKGROUND INFORMATION
17. Most existing computer systems use a two-digit year configuration in order to economise on computer resources such as memory, processing power, storage capacity and data transfer speed. As many computer processes are triggered by data comparisons, problems will arise when performing computations based on dates in the Year 2000 and beyond. Components affected include the operating systems which control and manage the operation of the central processing unit and the input/output devices; system utility software which handles the data transfer between devices and sorting of data; application software which defines the manipulation of data according to the business requirements; and other hardware devices such as internal timers.
18. The process of rectifying a non-compliant system is similar in nature to a system enhancement. It involves application programmes modification, hardware and software upgrade, and possibly data conversion followed by system testing and user acceptance.
Financial Services Bureau
July 1998
Enclosure 1 to FCR(98-99)17
Total In-house Staff Cost
|
|
By absorption by in-house staff
|
By creation of post
|
Total
|
|
Monthly staff cost
$
|
Man-month
|
Staff cost
$
|
Man-month
|
Staff cost
$
|
Man-month
|
Staff cost
$
|
|
Systems Manager
|
86,750
|
15.10
|
1,309,925
|
21.00
|
1,821,750
|
36.10
|
3,131,675
|
|
Analyst/Programmer I
|
55,657
|
22.60
|
1,257,848
|
26.00
|
1,447,082
|
48.60
|
2,704,930
|
|
Analyst/Programmer II
|
32,340
|
25.10
|
811,734
|
33.00
|
1,067,220
|
58.10
|
1,878,954
|
|
Computer Operator I
|
31,722
|
4.10
|
130,060
|
-
|
-
|
4.10
|
130,060
|
|
Data Preparation
Supervisor
|
29,218
|
0.60
|
17,531
|
-
|
-
|
0.60
|
17,531
|
|
Assistant Data
Preparation Supervisor
|
25,038
|
1.30
|
32,549
|
-
|
-
|
1.30
|
32,549
|
|
Statistician
|
69,968
|
3.54
|
247,687
|
-
|
-
|
3.54
|
247,687
|
|
Senior Statistical Officer
|
66,465
|
-
|
-
|
38.00
|
2,525,670
|
38.00
|
2,525,670
|
|
Statistical Officer I
|
48,981
|
15.14
|
741,572
|
83.75
|
4,102,159
|
98.89
|
4,843,731
|
|
Statistical Officer II/
Student Statistical Officer
|
28,092
|
25.79
|
724,493
|
-
|
-
|
25.79
|
724,493
|
|
Senior Statistics Supervisor
|
62,791
|
2.00
|
125,582
|
-
|
-
|
2.00
|
125,582
|
|
Statistics Supervisor
|
43,990
|
2.70
|
118,773
|
-
|
-
|
2.70
|
118,773
|
|
Clerical Officer
|
35,751
|
0.30
|
10,725
|
-
|
-
|
0.30
|
10,725
|
|
Assistant Clerical Officer
|
25,400
|
3.00
|
76,200
|
-
|
-
|
3.00
|
76,200
|
|
Total
|
-
|
121.27
|
5,604,679
|
201.75
|
10,963,881
|
323.02
|
16,568,560 |
Enclosure 2 to FCR(98-99)17
Additional In-house Manpower Resources Required by Type of Post
|
1998-99
|
1999-2000
|
2000-01
|
|
|
Rank
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Total
|
|
SM
|
-
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
21
|
|
A/PI
|
-
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
26
|
|
A/PII
|
-
|
3
|
3
|
3
|
3
|
3
|
3
|
3
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
33
|
|
SSO
|
1
|
1
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
38
|
|
SOI
|
2
|
4
|
8
|
8
|
8
|
7
|
7
|
6
|
5
|
5
|
5
|
2
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
1
|
84
|
|
Total
|
3
|
12
|
17
|
17
|
17
|
16
|
16
|
15
|
10
|
10
|
10
|
6
|
5
|
5
|
5
|
4
|
4
|
4
|
4
|
4
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
2
|
202
|
Abbreviation:
| SM | Systems Manager
|
| A/PI | Analyst/Programmer I
|
| A/PII | Analyst/Programmer II
|
| SSO | Senior Statistical Officer
|
| SOI | Statistical Officer I
|
Enclosure 3 to FCR(98-99)17
Additional Notional Annual Mid-Point Salary (NAMS) Required by Type of Post
|
|
1998-99
|
1999-2000
|
2000-01
|
|
NAMS value
|
Number of posts
|
NAMS value
|
Number of posts
|
NAMS value
|
Number of posts
|
NAMS value
|
|
(a)
|
(b)
|
(c) = (a) x (b)
|
(d)
|
(e) = (a) x (d)
|
(f)
|
(g) = (a) x (f)
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Systems Manager
|
681,180
|
2
|
1,362,360
|
1
|
681,180
|
-
|
-
|
|
Analyst/Programmer I
|
481,020
|
2
|
962,040
|
1
|
481,020
|
-
|
-
|
|
Analyst/Programmer II
|
333,480
|
3
|
1,000,440
|
1
|
333,480
|
-
|
-
|
|
Senior Statistical Officer
|
481,020
|
2
|
962,040
|
2
|
962,040
|
1
|
481,020
|
|
Statistical Officer I
|
365,160
|
8
|
2,921,280
|
5
|
1,825,800
|
1
|
365,160
|
|
Total
|
|
17
|
7,208,160
|
10
|
4,283,520
|
2
|
846,180 |
Enclosure 4 to FCR(98-99)17
Savings in Maintenance Cost
|
1998-99
|
1999-2000
|
2000-01
|
2001-02
|
2002-03
|
2003-04
|
Total
|
|
$ million
|
$ million
|
$ million
|
$ million
|
$ million
|
$ million
|
$ million
|
|
Maintenance cost arising from rectification work = (A)
Maintenance avoidance
|
0.84
|
1.55
|
1.68
|
2.02
|
2.19
|
2.54
|
10.82
|
|
Non-Y2K compliant mid-range machines
|
-
|
3.65
|
3.94
|
4.25
|
4.59
|
4.96
|
21.39
|
|
PCs, LAN servers
|
-
|
0.25
|
0.28
|
0.31
|
0.34
|
0.37
|
1.55
|
|
Sub-total = (B)
|
-
|
3.90
|
4.22
|
4.56
|
4.93
|
5.33
|
22.94
|
|
Additional recurrent cost (saving)
= (A) - (B)
|
0.84
|
(2.35)
|
(2.54)
|
(2.54)
|
(2.74)
|
(2.79)
|
(12.12) |
1.Programme modification will be embarked upon the formation of project teams.
