The euro is not just a computer problem, like the year-2000 bug, but many U.S. banks are treating it that way, a software executive says.
The people in charge of euro projects should be financial or business people, not technical people, said John Wookey of Oracle Corp. last week at a New York conference on the euro.
Oracle began selling software to manage euro conversions two years ago. Mr. Wookey is its vice president of financial applications.
"A phenomenon in the U.S. is the desire to link year-2000 and euro projects and categorize them the same way," he said. But apart from timing and the need to act quickly, there are few similarities between the two problems, he said.
"The year-2000 is pretty binary-it either works or it doesn't," Mr. Wookey said. "The euro is complex. It has a long time line and is unpredictable."
The euro "is not an information systems issue," he said. Euro systems conversions should reflect business decisions such as changes in pricing policies, the way trading partners are managed, and the packaging of products and services for pan-European consumers.
"You need systems that will support your business strategy, not dictate it," Mr. Wookey said.
He noted that Gartner Group had estimated that U.S. companies would spend $30 billion to become euro compliant.
Mr. Wookey spoke at a one-day conference on the euro organized by the Foreign Policy Association, the U.S. Council for International Business, and London's Royal Institute for International Affairs.
Not only are the euro and year-2000 issues different, the euro is more important, another speaker said.
Ninety-eight of European companies agree, said John Devereaux of PricewaterhouseCoopers, but 98% of U.S. companies hold the opposite view, according to a survey by the firm.
"I'm afraid on this one the Europeans have got it right," said Mr. Devereaux, who is a partner in charge of the firm's European Monetary Union practice in New York.
"There is a massive paradigm shift occuring in Europe and everyone is starting at ground zero," he said. "But the Europeans have recognized the strategic impact far ahead of the Americans."
U.S. financial institutions are much better prepared for the euro than U.S. product companies, Mr. Devereaux said.
A study of 200 Fortune 500 companies compiled by PricewaterhouseCoopers found that only 40% had prepared a euro strategy.
U.S. banks are under more pressure to develop a strategy, he said, partly because banks on the Continent are forming pan-European alliances.
"There have been many predictions that only a handful of the 250 U.S. banks will remain after the transition to the euro," Mr. Devereaux said.
The main information technology job that companies confront with the euro is installing a multi-currency system, he said. This could cost 50% to 100% more than year-2000 conversions, he estimated.