PraxIS June 2001

Managing reality in Information Systems - strategies for success

Systems Modelling Ltd.


Welcome - please read YahooGroups announcement!

Euro features

Testing, certification, and carefulness
Complaints on compliance
The big clean up
How to read a compliance survey
Double trouble
Euro counterfeiting detection workshop
Other euro sources

Information Security

The virus that wasn't.

On the lighter side

27 Web links in this newsletter

About this newsletter, Feedback, and Archives


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Euro Features


I had an article in the Irish Independent [7] newspaper and a clarifying followup [8] on the subject of taking a careful look at euro software. Here are the two key points:

1) What should companies look for to get the assurance that their accounting software has independent certification?

They should look for the expression: "BASDA Full EMU accreditation" and the suppliers must be able to give them the date it was achieved. They may also display the BASDA [4] logo showing that text.

2) What should they be cautious of?

Terms like "conforms to BASDA", "complies with BASDA", "follows BASDA guidelines". If the word "accreditation" is missing - ask if they have accreditation and when they got it. A truly accredited company can display the logo with the words 'FULL EMU ACCREDITATION'. If the company displays the older (1998) BASDA logo, (for what is now called "level 1") simple conversion, triangulation, and rounding, they are now out of date with respect to their user's needs. Such packages have NOT had their base currency conversion accredited, and that is what users need now.

"Complaints on Compliance" 

Computerscope [27] magazine in Ireland 5/2001 had an article under that title which quoted statements that to be sure of euro compliance, Irish companies should be buying Irish software rather than UK software. I replied to the editor to make three points:

Firstly, what does BASDA mean by "compliance"?

The mark "BASDA Full EMU Accreditation" means that the accumulated data and functionality the software gave you up to now in pounds can be verifiably brought forward accurately into the euro and its functionality will continue in euro. This accreditation is however limited to the core financials: SL/PL/GL; and I have extended it to price lists. It is not for stock control, order processing, payroll, or all the other modules. These often require specialist attention, such as dealer-supported export to spreadsheet / convert / re-import. Don't be number 1,285 in the queue for dealer support in December 2001.

Of course the euro changeover is much more than an accounting and IT issue. But there will be enough problems around the changeover without adding to the risk with inadequate or defective converters. Where management and staff spend time on manual workarounds, chasing, explaining, and correcting data pollution, currency confusion, conversion errors, reconciliation problems and rounding differences, there is an increase in stress, cost, cashflow problems from disputes, and loss of business to better prepared competitors.

Secondly, ask for proof.

It is sensible for a user to ask for proof of whether a product complies with a standard hammered out over two years by a standards body with over 300 members in the software industry.

The assertion by an Irish supplier that "if customers want to be sure of compliance, they should be buying software from Irish firms", is a generalisation but users need specific assurance. Compliance is demonstrated by objective proof, not a country of origin. It is a result of good software management, irrespective of nationality. Many Irish software companies have not had the lead time of that supplier who to their credit were the first Irish accounting software company to show me a customer account and base currency conversion routine back in 1999 (even though they have not submitted it for BASDA accreditation).

Equally, the speaker at a euro conference in Dublin is right to caution against relying on mere "promises" of converters; but the alternative is not to go with a different crowd, but to demand proof. I have been consulted by a UK software company with only one client in Ireland, because that client has demanded that they demonstrate due diligence. So whatever about the generalities, it is up to businesses to assure themselves with hard evidence on a case-by-case basis.

Thirdly, encourage a culture of compliance to standards

It would be of more practical benefit to Irish companies, and help to promote standards in the marketplace, if they had an attitude like the French respect for "NF Compatibilite Euro Certifiée" backed by representatives of the French Ministry of the Economy. About sixty products so far have been presented with certificates. This is not a matter of company size, but of a quality culture. It requires a certain level of software capability maturity to recognise the value of independent verification and validation (IV&V). Quality managers know from experience that developers "don't know what they don't know". Rather than let customers find the problems, they reduce their risk by engaging IV&V. A small software company in Ireland once told me they lost IEP70,000 in one year because of multiple product bug fix re-releases. Against that, the charge of about IEP7,000 for our testing (even lower for single-currency packages) looks good value.

This is not solely a matter of testing against the BASDA standard. Our work includes euro testing generally, to assist managers in finding out the weak spots in their conversion programme, before their users do. In May, I pointed out to one important organisation that they had the wrong conversion rate on their web site. To another, I explained that the reason for their incorrect results was a misapplication of Commission regulation 1103/97.

A leading example of a company with a culture of compliance with standards, for the benefit of their customers, is the Irish software company Convertall [9]. Their parent company is an engineering company used to working with standards organisations. Therefore they saw the benefit of having a test of their desktop converter for Word documents and Excel spreadsheets. The press release is planned for June, announcing that they are to receive certification from Systems Modelling Ltd. that ConvertAll conforms to EC regulation 1103/97 for conversion, triangulation, and rounding.

Are you sure your software applications can support all the requirements for the business changeover to the euro? Get an independent assessment on their "compliance" or "euro-readiness" with our euro software certification service. [6]


I would expect most conversions to fail at first. This is a frequently reported fact in discussions with project leaders. All euro converters depend on the assumption that the data integrity is clean. Accountants expect accounts to balance; and so they may on paper. But these converters follow the money trail better than a tribunal lawyer in the Caymans. (For the benefit of non-Irish readers, I should explain that we have tribunals of enquiry in progress investigating payments to politicians that have hitherto been hidden in a maze of offshore accounts.) If the user has ever had a crash, a forgotten suspense posting, a "back-door" patch to make things look OK, a converter will find them and mercilessly process them. These undead postings now come back to haunt the user. Allow several tries to kill off these zombies. The norm for big companies is about four conversion attempts until you get it right. It is always possible that some corrupted history data can escape the data integrity checker and cause problems on conversion. That's why I look for an audit trail (e.g. a CSV output) that can be quickly scanned using tools to isolate the important variances from the many "fly-speck" adjustments. The audit should be done by the data owners, ideally assisted by skilled auditors. It is risky to outsource this conversion. The typical dealer can only support the software in a generic fashion and cannot know the specifics of each company's chart of accounts, usage, and data history. Some have consultants who can perform this task, but such auditing is not part of the price of the euro conversion tool!

It is good practice to perform an acceptance test. For some people, a full parallel run in the euro is possible, for most, it is not. Less than 100% parallel requires judgement from the IT manager to select the "most likely to be troublesome" transactions for testing. After a period of confidence building, the final switchover is made.

How to read a compliance survey

Businessplus Magazine [10] published the results of a survey into the euro readiness of accounting software in their June 2001 issue. Here is a guide to readers in interpreting the results:

Score a point each word of content in the reply. "Yes" has no content. "No reply" is minus 5.

One supplier claims "BASDA certified for rounding and triangulation". Yes, that's the basic single-point conversion back in 1998. Today, users need more. They need base currency conversion and the detail/total reconciliation rounding differences handled. So the 1998 certification is only a beginning; they would need to update their certificate to the "Full EMU Accreditation" mark if it is to be taken seriously. Two of the packages listed do indeed have full accreditation from Systems Modelling Ltd for their base currency converters: Exchequer and TAS.

Other suppliers say that the user can make a journal entry to correct rounding differences. The problem is, rounding adjustments are typically one-sided corrections, and a user cannot enter those. Also, there could be one per account, even one per open item, so too much for users to do. So give credit to the supplier who uses the key word "automatic generation" of journals.

One said "in our tests no rounding differences occur". They can't have looked very far. Here's a simple one:

    In Pounds  in euro 
Amount 100.00  126.97 
VAT     20.00   25.39 
Total  120.00  152.37 

Note that 120 IEP = 152.37 euro, but the total of the Nett & VAT is 152.36. Where do they put the odd cent? Do they expect the users to enter those?

One supplier wins the "oops!" prize. In reply to "Does the software comply with EU requirements on rounding and triangulation", the devastatingly honest answer is "we have not compared the product to the stated spec". As this is EU law and has been known for five years now, we can only hope that the questionnaire was filled in by some hapless junior employee.

Full marks to those who answered the question on "how rounding differences are handled" by actually describing exactly how it is done. You see, they knew what the question meant.

Other useful euro resources on the web site are

Ten Vital Questions About The Euro [11] 23/05/01: Cap Gemini Ernst & Young has produced a test for companies to see if they're ready for the euro. focusing on the programme management aspects.

Euro Compliant Accounting Software [12] 23/03/01: The euro is right around the corner and now is the time to get euro compliant accounting software. Here's what to look for. By Julian Clarke.focusing on small business accounting.

Check out our EMU/Euro index page [2] for other news items.


The question of "double rounding" was raised in the euro2002 discussion group last month. This is where figures are rounded twice and thereby distorted. Companies thinking of their own convenience in rounding should first read these stories of how an American insurance company got into trouble with this practice. The Texas Attorney General 'Double Rounding' Insurance Case [13] and its followup Texas insurance commissioner criticized [14] from the Corpus Christi Caller Times.  These describe a $2 million settlement in a law firm's private lawsuit against insurance companies that alleged improper calculation procedures that adversely affected customers. The suit challenged the practice of `double-rounding' when figuring auto-insurance premiums. With double rounding, a $100.50 premium for one year would be rounded to $101, and the $50.50 six-month rate would be rounded again to $51, for a total annual cost of $102.


EUbusiness held an online discussion workshop [15] "Counterfeit detection during the cash changeover" [16], sponsored by De La Rue on 30 May.  They also have a Factsheet [17] on euro counterfeiting.


Up to date information regarding the cash changeover can be found in the following Commission reports: "Survey of the choices made by banks in preparing for the transition to the euro" [18] May 2001 highlights their choices on issues related to the changeover to the euro, from the early changeover of bank accounts to the cost of exchange in 2002. 

"Report on the preparations for the introduction of euro notes and coins" April 2001 both are available as PDFs via the Commission Europapers web page [19] and directly from the FEE web site in PDF [20].  Greece is now considering sub-front loading starter kits to the public, the last country to do so.

Marion Bywater of euro-impact magazine has produced an excellent piece of work for IBM on "Managing the introduction of euro notes and coins" [21] on the IBM euro web site.

Other euro sources

FEE Euro conference Brussels May 28-29 How to handle the most difficult changeover problems. You can download the presentations [22] from the FEE web site.

EXCHANGE is a EUROCITIES project supported by the European Commission under its PRINCE programme for information activities on the introduction of the euro. Their web site [23] features a downloadable document: Guide to Strategic Basic Principles for the Changeover to the Euro by Local Authorities 

This year is the last chance for companies to make the euro changeover, so we remind you of our consultancy services in euro training [5], euro compliance software testing and BASDA certification [3], and the book+CD on euro conversion [1], to help you succeed!

Information Security

The virus that wasn't.

Why go to the trouble of writing a virus to delete Windows system files when you can simply ask people to do it for you? I received a batch of emails and phone calls about the so-called SULFNBK virus. SULFNBK is actually a file needed Here is what McAfee have to say:

"An email HOAX has been circulating recently that has received a lot of press and public attention. The subject line may contain '***Virus Alert***' or mention SULFNBK.exe. If you receive a copy of this message, you should ignore it. Do NOT pass it on as this is how an email hoax spreads. You may receive a copy of this message from addresses that you recognize.

DO NOT DELETE ANY FILES FROM YOUR COMPUTER. SULFNBK.exe is a standard part of the Windows operating system and SHOULD NOT BE REMOVED."

Next time, please check the Symantec [24] or McAfee [25] virus information sites first.

Project Management Proverbs

A verbal contract isn't worth the paper it's written on.

If you don't attack the risks, the risks will attack you.

The lighter side

This is the ideal solution for all those students who send me their exam questions to answer for them: Your term papers written for you! [26] ( at $9/page) 


[1] Managing the Euro in Information Systems: Strategies for Success

[2] Euro & EMU index page

[3] BASDA approve SML as software tester for EMU Accreditation

[4] Business Application Software Developer's Association.

[5] Euro IT Workshop

[6] Euro compliance software certification service

[7] "Taking a careful look at euro software" (Irish Independent)

[8] "Check euro software up to scratch", followup article

[9] MS Word & Excel converter

[10] BusinessPlus magazine, Ireland

[11] Ten questions checklist from CGEY

[12] Euro Compliant small business accounting software

[13] The Texas Attorney General 'Double Rounding' Insurance Case 

[14] Texas insurance commissioner criticized

[15] EUbusiness workshop

[16] Counterfeit and forgery detection workshop

[17] EUBusiness fact sheet on counterfeiting

[18] EC Survey of choices by banks on changeover

[19] Commission Europapers web page

[20] Report on the preparations for the introduction of euro notes and coins

[21] Managing the introduction of euro notes and coins

[22] FEE Euro conference Brussels May 28-29 presentations

[23] Guide to Strategic Basic Principles for the Changeover to the Euro by Local Authorities

[24] Symantec Anti-Virus centre

[25] McAfee hoax alert site

[26] Term papers for sale

[27] Computerscope

Patrick O'Beirne

Copyright 2001 Systems Modelling Limited, . Reproduction allowed provided the report is copied in its entirety and with this copyright notice.



"Praxis" means model or example, from the Greek verb "to do". The name is chosen to reflect our focus on practical solutions to IS problems, avoiding hype. If you like acronyms, think of it as "Patrick's reports and analysis across Information Systems".

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