Euro adds to the
Year 2000 odyssey
By Karlin Lillington
Just when you thought it was safe to drain all your information
technology (IT) resources coping with the Year 2000 problem, along
comes a headache with an even closer deadline and a perhaps greater
cost: the euro.
Yes, it's not just for economists anymore. According to a recent Gartner
Group study, the euro is likely to delay and reshape major IT
deployment, demand 15-20 per cent of worldwide IT resources through
2000, and account for 50 per cent of an organisation's IT budget over
the next three years.
"It's probably more expensive for businesses than Year 2000," says Ms
Martha Bennett, vice president for research in Europe for IT industry
analysts Giga Information Group. "In many ways it is a more complex
problem because it affects businesses in more ways."
A Giga report points out that while Year 2000 IT projects are intended
to enable existing systems to continue to function normally, EMU
projects will involve completely new system requirements to cope with
the currency changeover.
Euro projects can be divided into two categories: system changes
which will enable organisations to handle the dual currency period from
January 1st, 1999 to December 31st, 2001, and the final conversion to
the euro, when the euro completely replaces the Irish pound.
In effect, most Irish businesses must be euro-ready in less than a year,
because organisations may begin trading in the euro from this coming
January 1st. This launches the three-year "no compulsion/no
prohibition" period, when no one can be forced to use the euro but,
conversely, anyone may start to use it (hard currency, which will not be
introduced until January 1st, 2002, will bring further hardware and
software demands).
But Ms Bennett predicts that many companies inadvertently will be
forced to use the euro from the launch date because larger trading
partners will expect them to be able to handle it. "And," she says, "I
have good news for any financial institutions which aren't ready on
January 1st, 1999 - they won't have a Year 2000 problem."
Of course, financial institutions are actually expected to lead the way in
euro introduction and have clearcut IT needs, but other organisations
will find it a murkier business, For now, the euro problem is primarily a
software application problem, according to Mr Dermott Flynn, manager
of euro services for IBM Ireland.
Anywhere a company handles financial records - transactions, billing,
accounting, payroll, pricing, historical records with financial data - all
must be euroconvertible.
"There are rules on how the euro is handled in accounting terms, and
how that's translated into IT systems," he says. At present, many
businesses are under the mistaken impression that most applications
can simply add on a function which will convert a given currency to
euro.
The rules - designed to eliminate discrepancies in the way euro values
are calculated - are based around the concept of "triangulation", which
means that calculations from currency to currency are not made directly
but instead pass through an intermediary euro stage. A payment from
Irish pounds to French francs would move from pounds to the euro
value and then to francs.
So, spreadsheets, for example, must be completely rebuilt specifically
for the euro. Likewise, current software programs designed to handle
multiple currencies cannot just add on the euro as another unit.
Applications must be altered at their most basic level - the source code
- and computer operating systems themselves must be altered to deal
with the euro symbol (it is not simply a matter of issuing new
keyboards, as the computer will not recognise what a euro key means).
The conversion factor also needs to be expressed in six digits, and
complications with rounding figures means all company data needs to
be converted in an orderly way. Similarly, trading partners will need to
co-ordinate their use of electronic trading software such as EDI
systems. Retailers will have to make decisions on whether or when to
use a joint pound/euro pricing and accounting system, and regear
systems accordingly.
Taxes can be calculated and paid in euro or pounds until the full
changeover, which means accounting software will need to
accommodate both approaches. The Revenue Commissioners say they
are ready to handle either method (and can be contacted at 01 679-2777
for some hand-holding and advice).
And an Irish-only IT political problem may well arise, too. The EU plans
to have "control E" represent the euro sign on keyboards. But "control
E" places fadas on letters. "Ireland would probably not want to give up
the Gaelic character for the Euro," says Ms Bennett.
Noting that most Irish businesses seem unaware of the euro's
implications for IT systems, Mr Flynn recommends that companies do
an assessment - which usually takes two to three weeks - to ascertain
what IT changes they may need to implement and when. Ms Bennett
suggests that euro project teams then work closely with Year 2000
teams to make sure they don't either duplicate efforts or alter systems
so that they can't cope with both problems.
Systems managers should perhaps stock up on aspirin, though. Says
Bennett: "One would not be unreasonable in predicting that a certain
amount of chaos will ensue."
Karlin Lillington is at klillington@irish-times.ie |
