Euro Switch Pulls Rank on Y2K
Step aside Year 2000. In just a few short weeks the European currency transition begins, where 11 of 15 European Community nations will officially adopt the euro as their currency. A three-year conversion process will commence January 1, eventually phasing out the German mark, French franc and Italian lira.
The problems resulting from this transition can best be summarized as such: the Year 2000 crisis cuts wide and shallow, the euro challenge is narrow and deep. Experts agree that while the two problems have similarities, the euro problem penetrates much further than Y2K into systems and business processes, though it will impact a more limited group of North American companies. Among the affected companies, Windows NT-based systems are not as removed from the euro crisis as they are from Year 2000.
The European Monetary Union (EMU) is very much an issue in North America because many North American and European organizations share code and financial information, according to Nick Jones, research director for GartnerGroup (Stamford, Conn.). GartnerGroup estimates that the worldwide problem may cost at least $100 billion to fix. A recent study from International Data Corp. (IDC, Framingham, Mass.) puts the total euro fix at $145 billion, mainly to be incurred between 1996 and 2002. About 60 percent will be internal expenditures, with 40 percent going to consultants and outside services. One major auto maker in Germany estimates that the cost of converting its accounting systems will cost $67 million.
There are a number of details that need to be addressed in preparing for the euro. At the most basic level, systems, particularly databases and accounting packages, will have to be prepared to handle the euro currency symbol. Microsoft announced last spring that it is integrating the euro currency symbol into its operating systems. This fix is included in Service Pack 4 for Windows NT 4.0, and will be included in Windows 2000. In addition, Microsoft declared that new releases of its Office products will offer euro character support, as long as the operating system and printer fonts support the new symbol. The company, however, will not update any client-side Windows versions before Windows 95, including all Windows 3.x versions and MS-DOS. The company is mum about support for Windows NT 3.51.
For enterprise-scale applications, major upgrades in systems code may be required to handle the new currency, as well as the use of dual currencies during the transition period. SAP is shipping free hot fixes for sites using R/3 versions 2.0 and 3.0, while versions 4.0 and 4.5 include euro functionality. Oracle added euro support to release 10.7 and 11 of its application package. Baan Co. announced that its Baan ERP and Baan IV packages are euro compliant, and began offering a tool to help customers analyze their entire IT infrastructure for euro compliance issues.
For companies trading with or operating in Europe, this changeover has the potential to be as disruptive as the Year 2000 could be. North American currency trading and financial institutions have the most to lose, but multinational corporations and companies that engage in international trade are also at risk. Other North American industries at risk are software and IT consulting firms, many of which have more than half of their sales from overseas markets.
For companies in the thick of Year 2000 remediation work, the EMU presents a daunting challenge. "Personally, I am not aware of any company or organization that can effortlessly handle the work involved with the Year 2000 problem and deliver a solution on time," says Year 2000 guru Peter deJager of deJager and Associates (Toronto). "To ask any company to complete the Year 2000 project and at the same time attempt to complete the changes necessary to accommodate a common currency is to expect us to run a four-minute mile with a bathtub strapped to our backs."
"These [are] the first two cross-organizational problems that have had to been dealt with by the computing community since the dawn of computing," says Harry Woodson, director with Systems Integration Group (SIG, Houston). While the euro and Y2K are separate projects, they require the "same methodology and toolsets."
Windows-based tools on the market consist primarily of workbench maintenance tools that were originally designed for Year 2000 remediation work. Some tool vendors that have announced euro functionality include Ravel Software, with its suite of Unravel euro tools, which run on Windows NT and 95/98 systems, and identify and analyze the impact of currency-related variables in Oracle, PL/SQL, and Cobol. Intellisoft CPI (King of Prussia, Pa., www.intellisoft.com) offers PowerLink 2000, an impact analysis tool that runs on a desktop PC and analyzes a range of languages, and claims the tool can be used for euro analysis.
Another PC-based Year 2000 analysis tool that can be used for euro analysis is Breakpoint/2000 from B-Squared Designs Inc. (Cary, N.C., www.b2d.com).
Skills and procedures for the Year 2000 fix and the euro conversion have similarities. But GartnerGroup’s Jones and other industry experts agree that this is where the similarities end. "You can't just take your average scanner and look at code currency symbols," says Dr. Bill Cureton, chief architect of the Unravel euro tools for Ravel Software Inc. (San Jose, Calif., www.unravel.com).
The euro conversion process is "going to be a much longer solution window than Year 2000," Systems Integration Group’s Woodson observes. "The euro deals with business rules, and Year 2000 deals with very simple technology issues. Euro-dollar is not simply a technology change, but it's a business rule change that then generates technology modifications. Compliancy deals with the configuration of those systems more than it does the architectural structure of those systems."
Organizations may need to "make considerable changes" to systems currently coded to deal with European currencies, says Carlton Schowe, president of IMI Systems Inc. (Melville, N.Y.). "Screen and report layouts may have to be updated to display new currency labels and changed currency field widths. Databases may need to be changed to support new currency field widths. Programs may need to be modified to ensure that data types and calculations allocate appropriate space and formats." Conversion of historical data will also be a challenge, Schowe continues. "Organizations will need to build and manage parallel systems to handle both legacy and euro currencies. Interfaces to external systems may need to support multiple currencies."
While software needs to be flexible enough to accommodate still-shifting rules, this may increase its complexity to midmarket or Windows NT sites. "Being flexible is a two-edged sword," Woodson says. "A great deal of flexibility means you have a high degree of configurability. But the more you're able to configure a product, the more difficult it becomes to do that, to the point that it takes an analyst and almost quasi-programming effort to create that configuration. If you have a system that's flexible enough to deal with the situation, you probably have a very complex configuration problem facing you."