Toyota euro call heralds compliance bonanza

Toyota's call for its UK suppliers to bid for new contracts in euros is a wake-up call for UK industry. It highlights imminent...

Toyota's call for its UK suppliers to bid for new contracts in euros is a wake-up call for UK industry. It highlights imminent headaches for IT managers.

Nick Huber

Industry analysts, who see Toyota's euro stance as the shape of things to come, have warned that the euro will be the biggest software bonanza for suppliers since Y2K.

The Toyota announcement, which asked around 5% of its UK suppliers to produce new quotes for car parts in euros to cut costs, has re-ignited the debate over the cost of making company and supplier IT systems euro-compliant.

Systems conversion challenges will be compounded by the IT skills shortage and the need to run a dual reporting system - to report VAT receipts to HM Customs and Excise in sterling - while Britain is out of the euro zone.

Michael Draeger, managing consultant for PA Consulting Group, said IT managers should be prepared to argue for minimal euro-upgrade charges from their suppliers.

"There are two views as to whether euro-enhancements from suppliers should be upgraded with minimal costs or whether there should be substantial one-off extra payment to the supplier. I have seen debates between IT managers and suppliers on this," he said.

Companies could also struggle to find the right IT staff to make systems euro compliant due to the number of UK IT contractors cashing in on demands for euro-conversions in continental Europe, Draeger added.

Dennis Keeling, chief executive of software suppliers association BASDA, said that only a handful of software suppliers could currently handle dual reporting requirements.

He added that euro-conversion costs would create considerable work for in-house teams and software suppliers.

This was last published in August 2000

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