Opinion

Twelve days still gives you time to get euro-ed

It is not too late to start thinking about the impact the introduction of euro notes will have on your business

Just because the Y2K date change problem did not result in the expected crop of disasters, there is a widespread feeling that the IT industry's current call for action over the euro is alarmist.

So, when organisations are urged to get ready for "e-day" on 1 January suppliers risk being accused of scare tactics, designed to drum up business.

Lulled into a false sense of security by the Y2K experience, users are not exactly springing into action. Many are planning to sit tight until January, see what happens and make the necessary changes then. That may be why, according to Dennis Keeling of business software developers association Basda, 60% of companies are not in a fit state to face the euro.

Failure to prepare adequately for the euro will mean that these companies will be in for a rude awakening on 1 January when European Union countries in the first wave of monetary union will start using euro notes and coins.

One company, a UK operation with European subsidiaries, was blithely assuming that its European operations had made all the necessary adjustments, even though the UK headquarters produces consolidated accounts for the whole company.

In this scenario there are several potential complications. For example, what about the treatment of historical data? The package this company was using did not have a straightforward mechanism for converting data, which posed difficulties for several modules.

Another problem was that its year-end fell in July. Having missed July 2001, it was going to have to change its functional currency to the euro in mid-year.

But there are companies cutting things even finer. And make no mistake, more than a few UK companies are going to be affected by e-day.

Firms that buy and sell in continental Europe may find their European (or US) trading partners starting to insist on euro payments - it is so much more convenient for those partners.

If the alarm bells are ringing at this point, the good news is that there is still time to tackle the euro problem - but only just. Businesses need to analyse the gap between where they stand and where they need to be, examining both the IT side of the euro and the general business aspects. Banking arrangements, staff training and customer relations have to be considered, alongside the capabilities of the software.

Getting ready to face the euro is going to cost money, but burying the corporate head in the sand could cost even more. Businesses which do not act risk lengthening their payment cycle and being hit where it hurts - in the cashflow.

David Rankin is managing director of Tenon Technology

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This was first published in December 2001

 

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