UK firms warned over euro hype

UK businesses should not get caught up in the hype and rush into euro conversion programmes, a leading retail body has warned.

The British Retail Consortium (BRC), whose members account for 90 per cent of UK retail sales, said only those that already accept foreign currencies need to worry about the introduction of the euro in the 12 eurozone countries.

"As a smaller business if they don't accept foreign currency then the changeover to the euro does not change that. It is a cold hard business decision aimed at tourist customers. If they are already accepting foreign currency, then their IT should already be up to accepting the euro," said David Southwell, head of media at the BRC.

Twelve countries across Europe, including Germany and France, ditched their own currencies on 1 January for the euro. The UK, along with Sweden, has yet to make a decision on whether to opt in, but a referendum is expected during the term of this government.

Yet over half of Britain's leading retailers, including Debenhams, Marks & Spencer, John Lewis, WH Smith, HMV and Safeway, are accepting the single currency in High Street stores from 1 January, although change will be given in sterling.

UK businesses should, however, be thinking now about the future IT implications of a decision by the government to opt in to the euro, explained Southwell.

"It is much easier to make [systems] euro ready now than retro fit them. If the kit has a life span of 10 years it is best to spend 2p per unit now than more later if and when the UK decides to opt in," he said.

And some say that the cost of euro-enabling IT systems has been over hyped.

Consumer goods giant Unilever said the conversion of its SAP enterprise resource planning (ERP) system went smoothly and cost £7.5m - less than one per cent of the company's annual global IT budget.

Companies using leading software application packages should not have major headaches, according to Andrea Di Maio, research director at analyst firm Gartner.

"The conversion and possible disasters have been a bit over hyped. Those who are using a major ERP system such as SAP or Oracle have not had major problems," he said.

But Charles Hom, senior analyst at Forrester, estimates that it will cost companies up to five times as much as dealing with the millennium bug. That could mean £2m to £3m to go through each application and modify or upgrade for the euro.