Last year my IT department spent a large part of our budget on Y2K compliance, egged on by the doom-mongers working for consultancies and among the IT press. As everyone knows, the predicted apocalypse didn't happen. Now we are being told of the importance of euro compliance and how we must be prepared for the change-over. Is this a real problem to look out for or just another money-spinner for IT services companies. How do I convince the board that it isn't another case of the boy crying wolf?
Define your needs for the euro
IT director, Corporation of London
Congratulations for having achieved Year 2000 compliance successfully. You seem to think that your company overspent on this vital work. I wonder if this is based on a post-implementation review of the project or on gut feeling. Most of us who were involved would say that we spent wisely, though some expenditure was on contingency planning which, like insurance, you hope will never be needed.
In my experience, the only compliance work that was not strictly necessary was forced upon us by software and hardware vendors who refused to validate old versions of their systems, encouraging us to upgrade to the supported versions. Arguably, this was just good housekeeping.
The need to rely on what the vendors tell you will be much reduced with euro conversion. Either the software copes with multi-currency working or it doesn't; you can test out how it does it for yourself. Your problem at this stage is more likely to be defining what your business needs for the euro are (if you trade in euro zone countries) or will be (if and when the UK joins the zone) and analysing the cost. With Y2K, defining the business requirement was the least of our problems.
If you have an urgent business requirement for euro conversion work, then it should be obvious to the board. If it isn't, then you must convince them with business, not IT, arguments. If the requirement is more distant then why bother trying to make the case at this stage? There are a lot more urgent things to tackle.
Plan for euro adoption
The changes required for IT systems to enable full euro compliance are significant. UK businesses are still in the fortunate position of being able to observe the efforts made by their European neighbours to see just how great a challenge it is. At present it is likely that UK businesses will continue to have the euro as simply an additional currency. This does not in itself pose significant systems problems. Changing your business systems to have the euro as a base currency will become a requirement, however, should the UK adopt it formally. Although such a change is unlikely to be imminent it would be wise to plan for it within the context of any significant systems change or upgrade. Hopefully, if your financial application systems are based on third-party packages, your supplier should already have this in hand. It would, however, be worthwhile asking the question to ensure that full euro compliance is on their agenda.
Business systems will be significantly affected by full adoption of the euro and a number of rules must be followed, for instance, in the data conversion process to ensure rounding amounts are accounted for correctly. Many questions have to be answered by the company's IT function, such as "Will we convert all historical data?" and "Is there a simple conversion upgrade available?".
Once these have been considered it is important that a well-structured project is followed to ensure compliance of all business systems, and that the IT function bears in mind that it may be necessary to synchronise the conversion within the separate applications where they interface with one another. Indeed, the IT euro project should form part of a business-wide euro programme that should cover all business areas which would be hit by the change to euro.
From an IT perspective, it is important that the amount of time and resources dedicated to any IT euro project is not underestimated as the process will require extensive testing and may require upgrades to existing applications to obtain Euro functionality.
The euro is far removed from Y2K
Visiting professor in information systems, Cranfield School of Management
There is a huge difference between the issues of Y2K and of the euro. Y2K was a specific IT problem, brought about by the negligence of IT practitioners. It only hit IT, with no business implications other than the potential for IT failure. The euro is a business issue, which will require some IT enablement.
So this time the boy doesn't need to cry wolf; he needs to ask the business what it plans to do, then respond with the IT implications. At the moment, most businesses have no idea how they will use the euro, other than handling it as another currency. From the tenor of your question, I suspect that is the case for your company.
If, at some future date, your company decides that it will change its base accounting currency to the euro, then you will need to modify relevant programs and develop a transition plan and systems. This will be a significant piece of work for larger businesses, but nothing like Y2K. After all, the euro is a currency with one large unit and one hundred sub-units, just like pound sterling, so most programs will need no amendment other than replacing the '£' with an 'E' in displays and prints.
It may well be that your company will decide to change some business processes when they convert, requiring further IT input, but that will be a business issue.