The millennium programme has been designed and developed from the business perspective by integrating progressively the internal and external risk factors in the integral business chains which operate in all the businesses, including the sales offices and production units.

The Philips millennium programme has identified six inter-related millennium impact areas: customer base, supply base, IT applications, IT infrastructure, facilities and services and corporate core processes.

The programme prescribes a standard procedure consisting of three phases -- business impact cycle, strategy definition and action planning and execution which includes remediation, testing and contingencies.

All sectors and groups in thecompany tailor the programme as appropriate for six impact areas. The steering committee supported by external solution and service providers is active in all these sectors.

A substantial portion of the total compliance cost is associated with the modification and testing of software and replacement of non-compliant systems.

The agenda of the millennium programme is to identify the internal and external risk factors which can impact millennium areas and relationship between them. According to the company, the likelihood of disruption of business continuity as a result of internal risk factors is relatively small.

Philips expects the programme's progression to result in reduced uncertainty relating to the company's Y2K compliance and reduced likelihood of interruptions to its operations.

The Philips contingency policy considers internal and external risk factors with external risks having a priority. Based on continuous information gathering and qualitative analyses, contingency alternatives are beingstudied and developed.

The millennium programme essentially concerns the company's business continuity risks in Philips' integral business chains including the supply base and customer base, caused by systems, products and equipment with date-sensitive components that may fail to recognise the year 2000.