If information technology professionals didn’t have enough to worry about with Year 2000 issues, Europe went ahead and created a common currency. That means companies doing business with European countries are faced with new technological demands, ranging from tweaking computer programs to adding the symbol for the new currency to keyboards.
“There is very little discussion about it, yet this could be something akin to the Y2K problem,” said independent economist Gary Cimenero of East Greenwich. “There could be some sharp, nasty problems.”
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Unlike the Y2K dilemma, the European problem begins as early as two months from now. Eleven European nations (not including Great Britain) will begin a shift away from their individual currencies on Jan. 1, 1999 by using both the old currency and the Euro. The expectation is to use the single “Euro” currency exclusively by 2002.
Cimenero said he fears that companies in the United State that are not prepared for the change could be “disconnected” electronically from the European companies in which they do business. He said the disconnection could occur if the computer systems used in the electronic exchange of currency is not compatible with the Euro. Also, bookkeeping and record keeping systems handling the 11 currencies will have to be modified in databases to incorporate the one currency.
“It is not as bad an issue as Y2K, because it should be short term. My concern is that it is right around the bend and not many people are talking about how to handle it,” Cimenero said.
Stephen Arlinghaus, U.S. Department of Commerce regional advisor, said there will be some confusion here as Europe moves toward the single currency. During the three-year transition each of the 11 countries will be using their own currency as well as the Euro.
“During the transition period companies in Europe will have the option of dealing with the old currency or the Euro. The government cannot force them to use one or the other. There will not be any exchange advantage to use one or the other either,” Arlinghaus said.
He said in order to stay on top, businesses here will need to communicate with their European clients or suppliers. American companies will need to know what currency they will be dealing in during the transition period and make the needed adjustments, something they should be moving toward by 2002 anyway.
Lois Scheirer, owner of Lexington, Mass-based e*Vantage International, a global risk management consulting firm, said the adjustment for business owners will need to be made with an understanding of how the new European Central Bank will convert the various currencies. Scheirer said computer programs will need to be adjusted to deal with the different way of converting one currency into another, because now the Euro will be part of the equation.
“Today if we wanted to convert a French franc into a German mark it is simple,” she said. “But with the changes there are specific requirements that you go through the Euro during the conversion. The system is reconfigured.”
Scheirer added, “Basically, the important part is getting the information to your system correctly and making sure that your interfaces are compatible.”
She said the costs of making the changes to software will vary based on the size of the company and scope of European business. She stressed that the advent of the Euro could be a great time for companies to jump into the European market.
“If you are not willing to do pricing or business in anything but the dollar you could lose a competitive advantage if the Euro is strong,” Scheirer added.
At least one New England company is taking advantage of the Euro at this point. In January, Bitstream Inc. of Cambridge will have a software package available for fonts that include the symbol for the Euro, a small ‘e’ with two lines through it. The software will run from $30-$50 depending on the computer format that it will be installed on.
“We knew watching the European community that we should create this product. Companies are already gearing up for the common currency and have asked us about the symbol,” said Greg Porell of Bitstream.
He said industries showing interest include the computer peripheral market, digital television, the bar code market and Internet related companies. The symbol will be typed by using a special command. Porell predicts the symbol could soon be joining the dollar sign and other symbols on the keyboard.
“It might be in the future for the PC makers to get in tune with what is happening and add it to keyboards. It won’t be long before everyone will need the symbol,” he added.
