(COMTEX) B: INTENTIA: Research report -- UK manufacturers give EMU th
B: INTENTIA: Research report -- UK manufacturers give EMU the commercial cold
shoulder
JUL 2, 1998, M2 Communications - More than two thirds of UK
manufacturers that export to Europe say they are unprepared for trading
in the 'EMU market' from January 1 next Year. And while half claim they
plan to price in Euros, just 33 per cent are giving a high priority to
getting the company ready.
These alarming results are contained in a joint report published by
Intentia, the global ERP (enterprise resource planning) software group
and IBM. It is based on research among 100 UK manufacturers that
currently trade with customers and suppliers in countries that plan to
join in economic and monetary union next Year.
The report, "EMU -- is UK manufacturing ready for the commercial
challenge?", reveals an apparent disinterest and a lack of
understanding about EMU's wider commercial impact. While 54 per cent of
companies plan o dual price in Euros and sterling, just 27 per cent
have bothered to talk to customers and suppliers to ascertain their
intentions.
"If companies are not ready to trade in Euros next January it will
send out negative messages", says Mike Nutter, managing director of
Intentia's UK business. "The ramifications of EMU go much wider than IT
systems, changing data and dual pricing. UK companies have got to
create the right commercial attitude and approach.
"EMU will change the market dynamics and companies need to understand
this is more fundamental than dual accounting. Politicians and the
electorate still have to make up their minds but for business there's
no choice. For once we have to wholeheartedly embrace the inevitable at
the outset rather than grudgingly being coaxed in bit by bit."
The report goes on to confirm that while EMU is discussed in the
majority (82 per cent) of the UK's Boardrooms, there appears to be a
lack of leadership, planning and positive action. And this is despite
67 per cent of companies saying EMU will create major benefits.
However, conversely, 71 per cent of companies believe EMU will create
problems such as pricing issues, high cost of upgrading IT and currency
conversion.
The report is divided into six parts, and the following are the key
findings of each.
If EMU's inevitable who's going to take
responsibility?
While 84 per cent believe the introduction of EMU is inevitable and
82 per cent of companies discuss it at Board level, just 65 per cent
have appointed someone responsible for conversion, while 35 per cent
haven't. Among those with someone responsible, 42 per cent said it is
the financial director, 14 per cent the managing director and 33 per
cent said the treasurer, financial controller or accountant.
Those companies with someone responsible for EMU were asked if a task
team has been established. Forty one companies (63 per cent) said yes
but 24 companies (37 per cent) said no. However, among those with a
task team, half have been established less thin six months.
Mike Nutter says: "Companies have got to quickly understand that EMU
is a reality. They've got to take action now."
Time to wake up and face the commercial issues Companies say they are
becoming more competitive by getting closer to customers and suppliers.
However the research doesn't support this claim. When asked if they are
aware of customer intentions to trade in Euros just 27 per cent said
yes, while a massive 73 per cent said no. And when asked the same
question about suppliers, 61 per cent said no.
When asked if they are aware the Government has been urging business
to be ready to trade in Euros on January 1, 52 per cent said yes and 48
per cent said no. However, 71 per cent are aware that banks offer Euro
accounts.
On the issue of dual pricing there is an even split. While 54 per
cent said they will dual price, 20 per cent say they won't and 26 per
cent don't know.
Mike Nutter says: "If UK companies claim to be customer driven they
should be talking and listening to their customers, and take down any
barriers to making it easier to do business."
Self denial over impact of EMU
Among the overwhelming 86 per cent of those interviewed who said EMU
is a positive step, 48 per cent said it will stabilise/standardise
currency a-id 19 per cent said it will simplify trading/make life
easier. However, surprisingly, 61 per cent said EMU will have
"no/limited impact" on the business.
When asked if EMU would be beneficial, 67 per cent said yes and 33
per cent said no. Among those that said yes, five key benefits emerged:
stable pricing, better financial control, removal of trading barriers
and opening up markets, standardisation of transactions and common
trading patterns.
Conversely, 71 per cent believe EMU will create problems such as
pricing issues, high cost of upgrading IT, currency conversion, and
maintaining dual accounting.
Mike Nutter says: "From a business perspective there are only
positive benefits that all companies have to embrace from day one."
Be prepared -- set up a task team and upgrade IT? Year 2000 is still
uppermost in the minds of many companies with 85 per cent still giving
it "high priority". By comparison, just 33 percent are giving EMU "high
priority" with 67 per cent giving it "low/medium priority".
Based on this response it was unsurprising to find that just 31 per
cent of companies said they feel "totally prepared" for EMU, while 38
per cent feel "moderately prepared" and 31 per cent feel "not at all
prepared".
Of the 69 per cent that feel "totally/moderately prepared", the
actions taken, in order of priority, include set up a task team,
upgrade IT systems, train and brief employees, purchase new software,
notify suppliers, notify customers and create Euro invoices.
The 31 per cent "not at all prepared" mentioned similar actions
likely to be taken, but in a different priority: notify suppliers, open
a Euro account, notify customers, create Euro invoices, upgrade IT
systems, set up a task team, train and brief employees and purchase new
software and hardware.
Mike Nutter says: "While Year 2000 clearly has a more fundamental
impact, companies cannot afford to ignore EMU preparations. The
commercial opportunities are too great"
EMU serves up an IT conundrum
A third (33 per cent) of companies believe EMU win have. "no/little
impact" on IT systems, 42 per cent said it will have "some impact" and
25 per cent said a "great impact". However, when given six statements
and asked to give a view on a scale of 1 to 5 - where 1 is completely
disagree, 3 is uncertain and 5 is completely agree - there are clear
contradictions.
"I am confident our current IT systems are EMU compliant" -- 57 per
cent "completely disagree/uncertain" and of these, 65 per cent have
either already upgraded or plan to invest in new IT systems for EMU
during the next 12 months.
"The impact of EMU means we will have to upgrade existing IT systems"
-- 50 per cent "completely disagree/uncertain" and of these 54 per cent
have either already upgraded or plan to invest in new IT systems for
EMU during the next 12 months.
"The impact of EMU means we will have to purchase new IT systems" --
83 per "completely disagree/uncertain" and of these 62 per cent have
either already upgraded or plan to invest in new IT systems for EMU
during the next 12 months.
"EMU is a good opportunity to review our IT systems" -- 74 per cent
"completely disagree/uncertain" and of these 61 per cent have either
already upgraded or plan to invest in new IT systems for EMU during the
next 12 months
"I trust our software supplier to solve any EMU-related problems that
might arise" -- 39 per cent "completely disagree/uncertain" but 61 per
cent "completely agree".
"EMU is an IT issue that has little relevance to the rest of the
business" -- 85 per cent "completely disagree/uncertain" and it is
unsurprising to find that an overwhelming 88 per cent of all companies
are treating Year 2000 and EMU as separate issues.
Mike Nutter says: "There appears to be confusion. EMU doesn't require
companies to spend GBP millions on new IT systems. Many will need to
upgrade software and the issue is time and resource to make the changes
to data."
In the media we trust
Given the need of companies for information it appears that IT
suppliers and consultants in general are not very highly regarded. When
asked where they would turn to for information about EMU, IT suppliers
were mentioned by just 27 per cent of companies, IT consultants by 23
per cent and management consultants by 19 per cent. The top five
mentioned were newspapers, magazines/journals, television,
colleagues/company briefings and government sources.
When asked to give an estimation of the overall cost of EMU
(including marketing, training, sales, accounting, new processes and
packaging) 53 per cent didn't know. However, the remainder (37 per
cent) gave wildly varying estimates ranging from as little as GBP 1
million to more than GBP 20 million.
Mike Nutter says: "The Government and business organisations have got
to get the message across that UK companies need to be on the EMU train
'before it leaves the station'."
Editor note: Intentia is a top ten global ERP (enterprise resource
planning) software group. It operates in 40 countries around the world
and plans to be one of the top three leading players by 2002. Its
products have been Year 2000 compliant since 1992.
Intentia web site: <www.intentia.com/uk
-0-
(C)1994-98 M2 COMMUNICATIONS LTDCONTACT: Richard Barwick, Intentia
Tel: +44 (0)1422 377611
James Kirkcaldy, i.works
Tel: +44 (0)976 703560
*M2 COMMUNICATIONS DISCLAIMS ALL LIABILITY FOR
INFORMATION PROVIDED WITHIN M2 PRESSWIRE. DATA
SUPPLIED BY NAMED PARTY/PARTIES.*
*** end of story ***
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