The lack of certainty on entry to the European single currency is leaving UK retailers and their IT departments in limbo, leading industry bodies have warned.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
A referendum on the euro may be as many as three years away, after Chancellor Gordon Brown said that only one of the five economic tests required for entry had been met.
The British Retail Consortium (BRC) said the euro would be “the largest retail IT project the UK will ever have to undertake” should the UK public agree to join.
However, it said there was no new information in the Treasury’s statements on the euro that would help retailers plan system and process changes for possible entry.
The most important factor for retailers is the time given between a “yes” referendum vote and euro entry, the BRC said.
It believes UK retailers will need a period of at least two years before the introduction of euro notes and coins, if the changeover is to be managed smoothly.
“There was nothing new on lead time which is one of the major issues for retailers,” said David Southwell, head of media at the BRC.
“The longer that companies have to spread the cost of new systems, the easier it will be. The estimates of cost for changeover have varied massively - from £1.5bn to £4bn - and this is all dependent on how much time retailers have.”
Despite the lack of certainty from the government, most of the UK retail IT departments have been planning for the eventual entry to the euro, Southwell said.
“A lot of future proofing has been going on in the background as making small changes on a step-by-step basis is more cost effective than making wholesale changes all at once,” he said. “This does not mean retailers are making assumptions about the euro, it is just good business sense.”
The British Chamber of Commerce, which represents 135,000 UK businesses, agreed that companies of all sizes should begin planning IT changes now.
"Small businesses are, understandably, reluctant to spend substantial amounts of money on preparing for the possibility of UK entry into European monetary union," said Antony Goldstone, president of the BCC.
"However, there are steps that businesses can and should take now that will save them money in long run and minimise any risks of not being ready in time, should Britain decide to join."
The euro: What should IT directors be doing?
British Chamber of Commerce guide
For businesses about to renew their software, the most important question to ask the supplier is, "Explain how, using your software, we would change the base currency of accounting from sterling to the euro?"
Other important questions to ask are whether the software can handle the conversion of historical data and whether it can handle a situation in which some customers want to be invoiced in sterling and some in euro.
Even if a company is not looking to change systems now, there are actions that can be taken now to minimise future risks. For example, companies should ask if there are any existing users in the euro-zone which were using the software before transition and then upgraded.
Companies with IT outsourcing contracts should investigate whether or not any changes to software, necessitated by UK entry, would be covered under the terms of the contract. Some contracts deem this to be such a fundamental change that it would be considered an add-on, at extra cost.