In the public’s mind, 1999 is likely to go down in history as the year of the bug. Homes and businesses have been inundated with images of yellow and black millennium nasties in the shape of the now-familiar bug logo. It has appeared on television, billboards and on leaflets pushed through our letter boxes. In anticipation of bug-related problems, the government set up Action 2000, chaired by Don Cruickshank, to help small and medium-sized companies to prepare for all eventualities. But although the great majority of IT media hype throughout the year has centred around millennium compliance, accountancy software companies have been concentrating their efforts on e-commerce software and the introduction of the single European currency. Most planning, ordering and implementation of software is carried out two to three years in advance. So while scary Y2K stories have been appearing in the national press, the larger accountancy firms have already put their systems in place and are well and truly tested. Millennium compliance may be good news for accountants, but it has been partly bad news for systems providers. In particular the top five software houses – SAP, JD Edwards, Baan, PeopleSoft and Oracle – all suffered poor results compared to 1997 and 1998. Dennis Keeling, chief executive of BASDA, the UK accountancy software developers’ trade association, says that this year has stretched the IT world’s survival tactics. ‘The last time I witnessed a sales slump like this year was in 1971 when we converted into new money. There were massive redundancies and it took 18 months to two years before people settled down,’ he says. However, amid the doom and gloom it became clear that the saving grace for software developers would be the demand for e-commerce, both customer-to-business and business-to-business systems. Experts have reiterated throughout the year that demand for e-commerce capabilities would mushroom. XML software in particular proved popular, mainly due to its price and the ease with which it can be implemented. In the US, XML projects have been dubbed by experts as ‘bigger than the Internet’ in their potential for growth. The launch of the euro prompted a surge of euro-compliant financial packages at the start of the year. Companies breathed a sigh of relief in January as its introduction passed off without any major hitches. BMW, which reported its 1999 accounts in euros, said at the time ‘the introduction is not so difficult’. Euro-related activity in the finance IT market may have dropped off midway through the year, but not everyone mirrored BMW’s confidence. Developers said changing calculation routines and database field sizes was ‘more of a challenge than Y2K’. And because the timing of the UK’s entry into the single currency is by no means settled, compliance projects are likely to loom large in the near future. As Keeling confirms: ‘If anyone thinks the Y2K problem was the worst thing ever, they are wrong. We are all just limbering up for EMU. All accounting amounts and documents have to balance. The average down-time for firms will be three days with larger firms more likely to take five or six days to undertake EMU conversion.’ Other talking points during the year included the Accounting Standards Board turning down a call from London-based Britannia Software to class company websites as fixed assets. ASB technical director Allan Cook said in March: ‘As websites have no clear market value, they could not be capitalised.’ In April the first firm to file a 1999/2000 tax return via the Inland Revenue’s electronic lodgement system warned that returns submitted in this way were being treated as ‘an afterthought’ by Revenue officers. The Revenue, meanwhile, spent much of the year on a project to convert 50,000 PCs to run on Windows NT: the work was completed in October. Sage launched a free Internet access package in May for small businesses in a bid to move itself away from the small business accountancy provider towards becoming ‘a more dominant player in the e-commerce field’. In the same month the government was panned for announcing plans to launch a scheme to improve IT advice for small firms as part of its technology strategy. Software trade associations called the adviser skills initiative a ‘dead duck’. The government’s e-commerce Bill was launched last month amid confident claims from e-minister Patricia Hewitt that the UK would aim to become the world’s leading centre for e-commerce – but not before critics, including Tory shadow trade and industry minister Angela Brown, said the Bill ‘was sending out ‘mixed messages’. The turn of the year may or may not see the resolution of millennium bug-related problems. But accounting and software gurus will be facing up to a good many issues long after the champagne has gone flat.
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