Early planning will give competitive edge

THE two greatest dangers for the business sector in the introduction of EMU are that firms will underestimate the amount of work involved, or, alternatively, overestimate the size of the task.

So believes Mr John Travers, the chief executive of Forfas and the man charged with overseeing the EMU Business Awareness Campaign, launched last week.

The transition to EMU is not simply a case of another currency change. It is a complicated process and requires that firms make adequate preparation, says Mr Travers.

At the same time he fears that firms may overestimate the amount of change involved and, especially in the case of small firms, feel that it is all beyond their capabilities.

One immediate and relatively simple step which all firms should take is to appoint a "euro manager".

This person would "establish clearly what EMU will mean for their business and the actions they need to take to deal effectively with it," Mr Travers says.

The arrival of the euro will be felt throughout most aspects of any firm's activities. Each company will need to review "its overall business strategy, its marketing plans, its product ion activities, its internal management procedures, its financial management and accounting and its overall management of risk," he says.

Enterprises will need to consider to what extent their computer systems will be able to cope during the transition period.

This is likely to last for 3.5 years, - from January 1st, 1999, to the end of July, 2002.

Computer systems will need to be able to cope with dealing in two currencies and with the fact that suppliers and customers will choose to changeover to the euro at a time of their own convenience.

The implications for a company's hardware and software systems "need to be addressed now as there will be a premium on the availability and buy-in of services to look at these issues as January 1st 1999, approaches."

Financial and accounting systems will also be affected as will the way invoicing is done and how accounts are handled.

Marketing is another function that will require consideration, according to Mr Travers.

"The elimination of exchange rate risk between countries that join EMU will mean that currency transaction costs and related uncertainties will be removed. Contacts with customers across a new and wider market area will be facilitated. Existing sales strategy and distribution channels will need to be reviewed."

Catalogues, pricing displays and price lists will have to be changed.

The deepening of the single market brought about by EMU will create new sales opportunities and new challenges. The range of products and services that a firm offers will require re-evaluation.

Within each firm each member of staff will need to understand the implications of the transition to the new currency.

"The training needs of enterprises for the changeover will only be fully determined once the detailed functional changes have been identified and a plan drawn up for their implementation. Clearly, the sooner individual firms start on reviewing these issues the better."

While the government and professional and business organisations have launched campaigns to encourage awareness of EMU, the responsibility for making adequate preparation rests with each individual firm, Mr Travers says.

"Irish firms will take best advantage of the new situation brought about by EMU if the response developed is part of a wider strategy of increasing their competitiveness to best international levels."

A central point is made by Mr Travers by the Minister for Enterprise and Employment, Mr Richard Bruton, and by the Minister for Finance, Mr Quinn Early preparation will result in competitive advantage and reduce the difficulties and costs involved in transition. The time to start is now.