IT: small businesses must be ready to do trade in euros
Unlike the well-publicised threat to computer systems posed by the onset of the year 2000, the introduction of a single European currency and its subsequent effects on an organisation's IT systems has not been well flagged.
In around a year from now the euro will be a reality. Such news should have resulted in a flurry of activity as small businesses consider how they will need to alter their current practices to cope, and how they will take advantage of the new circumstances. But, as yet, it hasn't.
As the single currency is such a big and wide-ranging change, it would be wise to begin exercising a little imagination.
Making the IT changes for the euro is on a different level to those needed for the year 2000. While the year 2000 is primarily a technical challenge with business implications, preparing for the euro is a major business challenge with IT implications. That said, information from SMEs in continental Europe who have already risen to the challenge indicates that over 50% of the task and costs of preparing for the euro is IT related. And many of those in the forefront have spent over 18 months already working on this issue.
It is likely that once you have assessed your risk and opportunity profile for the single currency (an essential first step) you will need to ensure that firstly, you can trade using the euro, and secondly, alter your information systems to support any new initiatives you may develop. For many, such 'euro-compliance' will require either upgrading or replacing existing systems. It is perhaps obvious that one of these will be accounting software but others, possibly not so obvious, such as marketing, manufacturing and personnel systems which process financial transactions or hold financial information, will need to be changed. Doing this will place great reliance on software providers; indeed one of the first steps that should be taken is to contact your existing software suppliers to ask for information about how or when their systems will be able to handle the euro.
It is imperative that even smaller businesses now begin to instigate euro projects at board level with a budget for investigating the issues and addressing them. This project needs to have broad representation from across your company, to investigate the policies and requirements of your banks, suppliers and customers (see also SME Professional Counsel), and assess the likely impact on business processes, marketing, payroll, and logistics. The resultant plan will allow you to approach the advent of the euro with confidence. It may well be that following an assessment, you conclude that the euro will not affect you until the UK goes in for definite. Even so, it is very sensible to at least know what you will do when it does happen. The day when you have to process your first payment or invoice in the euro is nigh.
Rob Wirszcyz is head of the Computer Services and Software Association.