Happy 1997. You now have only 36 months to plan your millennium celebrations. But for many IT people, there is a more pressing deadline ahead. In comparison, it could make the year 2000 conversion seem like routine software maintenance.
European Monetary Union will force IT departments to make substantial changes to their applications. But most people in the industry have not even started thinking about it. Make no mistake, this is not just a problem for banks and multinationals; nor is it a factor you can ignore if the UK decides not to join the union. If you haven't yet assessed the implications of EMU for your organisation, you could be in for a shock.
Phase one of the EMU timetable begins early in 1998, with a decision on which countries are in and which are out. At that point, the UK and Denmark will decide whether to exercise their opt-ins.
January 1999 sees the beginning of the second phase, when the Euro will become legal tender in the participating states. Initially, it will be used for commercial bank deposits, transactions between banks and large customers, as well as new government debt. National currencies will still be used in retail, but exchange rates will be locked.
In January 2002, Euro notes and coins will appear. The two currencies will co-exist for a further six months, after which the pound sterling may be gone for good.
It is the second phase that will cause the most upheaval for computer systems. The Euro is not just another currency. The point is that it is a dual currency. Financial institutions, government departments and large corporations will have to work partly in Euros and partly in pounds. Somewhere within their systems, a frontier will exist. As money passes over that line, it will have to be converted from one currency to another. So, computer systems must be modified to handle it.
Clearly, this will be more difficult than adjusting for the year 2000. The date change is a mechanical problem that can be partly automated. EMU affects the very infrastructure of the applications. It will involve much more work than adding a couple of digits to a date field.
Even if you are certain your company will never use Euros and pounds at the same time, you still face making a one-off conversion to every currency field in every record in every financial application.
In 1995, the British Bankers' Association estimated that banks and building societies would need to spend u436m on IT changes. For the country as a whole, it could cost between u2bn and u3bn.
Given the scale of the problem, it would seem a good idea for IT departments to plan for EMU right now. But many appear to be doing nothing until the Government settles the UK's position. So they will have less than a year to implement any changes.
It's true that if we start changing systems now, we will be wasting money if the UK stays out. But the wasted work will be as nothing compared to the consequences of not being ready in time. This is not only a UK problem; the rest of Europe is as uncertain and ill-prepared.
Nevertheless, the lack of enthusiasm for EMU on the part of the Government must be one of the main reasons for procrastination in the UK. Although we will have a year's breathing space before the political decisions, it is simply not enough.
It is interesting to compare EMU with decimalisation in 1971. Then, the country had three-and-a-half years to prepare. Successive governments provided guidance and leadership at every step. What a difference from the muddle, indecision and lack of direction today.
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