Only 60 per cent of European companies have strategies in place to handle European monetary union, even though it will impact them in under a year. And only one-third have allocated specific funds for IT conversion for EMU.
Technology compliance alone will cost European corporations #19 billion - an average of #11 million per large company - yet a quarter have not set aside a separate budget to cover transition.
Of 77 major companies surveyed by management consultancy KPMG, 91 per cent estimated that IT conversion will account for at least 60 per cent of the total EMU bill. But only 34 per cent had allocated funds specifically to cover this.
Of those who have put money aside, over half plan to divert funds from other key projects, including Year 2000 conversion and Internet initiatives.
Malcolm Stirling, director of KPMG's EMU and Year 2000 services, said: "If companies have already set budgets to use IT for the achievement of a competitive advantage, then they will need to check where the diversion of these resources will leave them."
He also issued a strong warning about the skills crisis provoked by EMU and Year 2000 conversion needs, pointing out that IT resources and skills will be thin on the ground by 1999 and urging companies to "book their resources now if they are planning to wait until the last minute for EMU compliance".
On the positive side, he claims that, although European governments have focused on the political rather than the practical issues of EMU, the number of companies that are planning for compliance has almost doubled since last year. "This would suggest that more companies are seeing the benefits of being compliant and want to capitalise early," he added.
The survey found that almost 60 per cent of companies are doing reviews and making decisions on whether to prioritise Year 2000 or EMU conversion. But many are planning to cope with Y2K first, even though EMU comes into force in 1999.
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