In for a Euro in for a Pound

Guy Clapperton follows up last week's look at the single Europeancurrency by revealing some of the vital implications for the channel

Let's start with an intelligence test. Which of the following is not a bona fide policy statement? We will join the single European currency if we are elected. We will definitely not join the single European currency if we are elected. We will wait and see whether it is worth joining the single European currency after we are elected. We will decide nearer the time.

The odd one out, of course, is number two - nobody has actually ruled out migrating to a single currency, the euro, as a means of trading over the next few years. But nobody has actually ruled it in for the moment.

None of this is particularly new or revolutionary and, presumably, computer resellers intend to continue trading beyond the end of the century whether in pounds, euros or nice shiny beads , as long as they can run a decent business. The only difficulty will arise if they plan to sell anyone an accounting system over the next couple of years, especially if it is designed to last longer than the end of the decade.

Here we have one of the biggest potential problems to face the software industry. In the UK, the trouble could be just as significant as the year 2000 issue - maybe more so because few people know about it. But many accounting software manufacturers haven't the faintest idea how they are supposed to run their R&D beyond the next year or so. Dealers could be hard pressed to find reassuring things to say to clients: yes, the company assures us it's year 2000 compliant, but we can't say what will happen with the euro because nobody knows yet.

One person trying to make people more aware of the issue is Dennis Keeling, director of the Business and Accounting Software Developers' Association.

He confirms that large developers are building the ability to cope with dual currency into their software - indeed, the technology is pretty accessible.

Keeling says: 'If you look at a cross-channel ferry, where you can pay in francs or pounds, those tills are clever enough to accept both currencies.'

Unfortunately, this sort of functionality is some way off for small developers.

It is these developers that will sell through dealers, whether at the retail end for the Microsoft Money class of product or at the small to medium enterprise end with Sage Sterling.

For larger systems there does not seem to be much of a problem. Fourfront MD Chris Sharp believes there are five areas to address, all of which his product does. First, the ability to manage more than one base currency may be important, depending on whether the UK adopts the euro.

Second is the need to hold multiple price lists, which in turn will need to be date sensitive. 'If you had to update your price list every day, it would be a pain,' says Sharp.

Third, some sort of intelligence is needed to ensure the system always defaults to the correct one of the two base currencies would be desirable.

Fourth is the ability to revalue items swiftly, and fifth, the ability to hold customer balances in different currencies.

'There may be other issues and we'll have to revisit them,' says Sharp.

'But I don't think it's going to affect us really.'

Sage is less sanguine about the problem. Whereas the technology to handle multiple currencies exists in Sovereign, and could be engineered backwards into Sage Sterling, marketing director David Pinches agrees there is a great need for the government to make up its mind about the single currency.

'Dual currency would not be a problem for us,' says Pinches, 'but what might need some notice would be if European monetary union were taken further, for example, pan-European VAT, taxation rulings and similar considerations.'

Such issues would need a policy, a date and a clear statement on implementation timetables - none of which have been forthcoming from the government.

What is worrying, according to Keeling's accounting software industry newsletter, is that the government does not see the single European currency as a technology issue.

Gillian Kent, consumer product manager at Microsoft, plays down any problem with MS Money because the software can already handle multiple currencies. 'Whenever the decision is made, it is not going to happen overnight,' she says.

There will certainly be discussions about how to get customers to make the transition from one system to another, but the company that pulled everyone off Dos on to Windows and orchestrated last year's Windows 95 campaign is not at all put out by moving customers. You can see why not.

Corporate users are perhaps a little more cautious because of another event that is going to be happening at the same time. Mili Lewis, British Telecom's year 2000 manager, confirms that BT's IT staff are by no means convinced that they can handle both issues at the same time. A large installation can only be altered by a certain number of criteria before it becomes unstable.

US consultant and author Peter De Jager, who has been campaigning on the year 2000 issue for five years, is convinced that corporates will have to let the currency issue slide until the problem is sorted out.

'You can't do both,' he says.

All of this is fine if you know in which currency you are likely to be paid in three years' time. De Jager, as an American, does; the British don't.

Consultant John Tate also acknowledges a larger problem than the accounting companies want to own up to. 'The leading mid-range packages - Systems Union, Coda, JBA - already have multi-currency handling built in, so they have a good chance of handling the single currency,' he says. 'As for the smaller companies, a lot of their existing multi-currency handling is woefully poor.'

The standard advice on offer from Tate Bramald is to buy from only the best-established names in the field.

One of the better-known names to single users will be Quicken, developed by Intuit. Quicken handles multiple currencies and marketing manager Alex Merryfield believes it will manipulate concurrent currencies. But Quick Books does not have this feature.

'We're continuing to look at the needs of our customers and whether or not they want that particular feature,' he says. He concedes that exchange rates in a single currency environment would be a challenge for both products.

For Keeling, the issue remains complicated. Substantial re-engineering of software is necessary even if the UK does not adopt the euro. 'Already we are hearing of high street shops that are planning to offer dual prices in 1999, so retailers will need to be able to operate in pounds and in euros,' he says. This is happening whether the UK goes in or not - apparently, it would be impossible to decide otherwise without hammering the tourist trade.

The main difficulty for Keeling is that software will still have to be able to look at previous accounts to generate comparative reports. 'It has got to be able to compare euros and pounds,' he says.

'The point is, whether we like it or not, it's going to happen and companies will have to offer an RRP in euros and accept account payments in euros.

It will be a retail currency.'

So, will the UK join up? I believe it probably will. The pressure on whoever is in power when the decision has to be made will be considerable.

London has for centuries been recognised as a centre for high commerce.

BCCI and Barings notwithstanding, that is still very much the case.

To take the UK out of a single currency grouping when the rest of Europe, including Germany, is going into one would be to marginalise it and by extension the City in a manner that many voters and politicians would find unacceptable. Trading with the UK would become harder for our partners in Europe, which could otherwise trade in their own currency, and to our partners elsewhere who could work with a single currency or a single currency plus sterling.

So, if that were the case, what do software developers and their dealers do about it? The answer is, frustratingly, not a lot for the moment. Until the government of the day - or a cross-party group - starts admitting that the euro is on the cards, there is no timetable confirmed for the UK - just a framework agreed by other countries which will apply if, and only if, we decide to go in on day one.

Products cannot be designed yet because the parameters have not been set. Larger companies already dealing in multiple currencies have the edge, beyond a doubt.

The same applies if the single currency does not happen in the UK. It will still happen elsewhere, as planned. Accounting packages will need to work with sterling as well as the euro for overseas trade, and there is little point building that into packages until it is certain whether the UK is going to be using the euro.

The situation couldn't be worse - not even if the whole mess were set up to coincide with the year 2000 problem. And as we are already aware, the two events will coincide almost exactly.