Re: BPCS CD and the Euro. Definitive Answer

Having  been  working  on  triangulation and euro database conversion since
early 1998 I thought I might clarify a few points:

As  previously stated, for an application to become Euro enabled involves 2
steps:

Implementing Triangulation from 1/1/1999 to 31/12/2001
Converting   base  reporting  values/rates  (and  within  BPCS  the  global
values/rates) to Euro by the 1/1/2002

These  steps  are  exclusive  - implementing triangulation does not help in
converting  a  database  to Euro and converting a database to Euro does not
mean you are compliant with the triangulation rules.

Triangulation
The  rules  for  triangulation  were  only finalised in December 1997 to be
implemented  by 1/1/1999 - some 12 1/2 months later.   This was clearly not
enough  time  for  SSA  or  most  other  package  suppliers  to  make their
applications  perform  full  triangulation   -  as  mentioned  nearly every
program in BPCS needed to be changed.

There are no penalties imposed by any of the member countries regarding the
implementation  of  triangulation  although  there  are  many companies who
wanted to be fully compliant for a number of reasons.   We at MS400 created
a  package that converted source code to perform full triangulation in 1998
without   database  modifications.   This  was  very  succesfull  and  Ciba
Speciality  Chemicals,  among  many  others,  have  been  succesfully fully
triangualtion  compliant  since  early  1999.    Although our triangulation
package  is still available we do not recomend that organisations implement
it  at  this late stage as no company within the current group of 12 member
countries would even get 1 full financial year using triangulation.

There are two points I would make:

1.    If you convert BPCS base reporting data for a company to Euro it does
not mean you are triangulation compliant (except when using 4.05CDE & 6.1).
If  you  have  transaction  data  in  a  member  NCU currency and your base
currency is Euro then the transaction to base exchange rate will need to be
an inverse conversion factor - this is NOT allowed.
To  convert  any  NCU to Euro you MUST divide by the appropriate conversion
factor.    All BPCS rates are multiply rates and so BPCS will check GCC for
a  NCU/EUR  rate  to  multiply the     transaction value with.   This means
that  if  you  converted  a  BPCS  database  to  Euro the Euro value of new
transactions   will   not  be  calculated  using  the  rules  whenever  the
transaction  data  is in a member NCU.  The only triangulation issue to 'go
away'  after  a  database  is  converted  to  Euro  is  in  the case of OUT
tranasaction  data.    Applications,  like MACPAC, that always divide by an
exchange  rate  do  become  essentially  triangulation compliant when their
database is converted to Euro.

2.    What about other countries joining the Euro?  Denmark, Sweden, Uk etc
There  is  a  possibility  that  there  will be transition periods, for the
current  members  1/1/1999  to  31/12/2001,  in which triangulation will be
'required'.   Although there will be other countries joining and there will
be  transition periods I cannot see it becoming a legal requirement, in the
UK for example,  to perform   triangulation when the current 12 countries (
Greece  have  a  shorter transition period) have not been compelled to make
the change.

Database Conversion
By  the end of the current year all base reporting data (and global in BPCS
if applicable) must be converted to Euro with no net financial change to an
organisation.    An organisation can still transact in NCU up until the end
of  the year but no new NCU transactions can take place starting 1/1/2002 .
You may still be sent cheques in NCU in the first few weeks of 2002 but you
should  lodge them within BPCS as Euro's (they will be credited to yor bank
account  as  Euro's  -  problems  with  3  way  matching ).  All electronic
transfers will be in Euros from that date - there is no choice.

Database  layout  changes are not required and there will be very few or no
program  changes  (certainly  none required in any version of BPCS) -  hard
coded  currency  symbols  are  displayed/printed,  where there are hardcode
value tests (eg   COST IFGT 100) and where hardcoded rounding routines have
been added. In Italy things are more complex if inhouse or Italian specific
packages  have  been designed to operate with no decimal places.   All code
and  databases layouts will need to be changed and then all data converted.

You  should not underestimate the task of DB conversion .   Most BPCS users
have  other AS400 appliactions and nearly all files on your AS400 will need
to  be  converted.   In BPCS (as well as other integrated ERP applications)
you  cannot safely convert a subset of files or a subset of a file by date.
Not   all  package  suppliers  have  created  conversion  tools  for  their
customers.   We have seen an average of more than 200 files that need to be
converted  on  a  typical  AS400.    To write these manually and include re
balancing  of  GL,  variance tracking, conversion control, auditing etc may
take a few weeks!
Multi  company  databases.  Some  companies  will  be OUT and should not be
converted, you may want to convert companies individually, you may be using
the  BPCS workaround to get costs in local currency using the 'fake' global
currency   method,  you  may  want  to  convert  global  before/after  base
conversion or perhaps your global is OUT.

To actually go live and convert your databases nearly every record in every
file  will  need  to  be updated - time to re assess history and get rid of
hard/soft  deleted records and all of those redundant members (if have seen
ECH/ECL  with 2,500 members).   We have GL integrity checking reports which
can  be  used  to gauge the conversion times for GJD/GJH/GGM or GLH/GHH/GSB
(when using our tool) - multiply the run time by 2.
When  will  you  go  live?    Not  at  the  end  of December because if the
conversion  goes wrong you cannot use your systems until the conversion has
worked  properly.    Our tool converts at any point in time but finance (as
they  will do reconcilliation) prefer a period end.  Are you using calander
period  ends?    If so they you only have the choice of the following dates
if  you  want  to  convert at a period end (remember your normal period end
processing  needs  to  take  place, backups, database duplication etc)  Sat
31st March, Sun 30th June, Fri 31st Aug, Sun 30th Sept, Fri Nov 30th.

I agree with the comments that upgrading to CDE for data conversion may not
be  the  answer  for  those  companies  considering it.   Not all files are
converted  by the SSA tool and the GL is not kept in balance.   V 6.1 still
has  the  same  issues  re  the  conversion tool but if an organisation can
implement  this before the end of the year the extra functionality of V 6.1
may  make  this  attractive.  Of course non BPCS databases still have to be
converted and the SSA tool will not do these.

Our  company, based in Ireland, created a triangulation conversion tool for
BPCS  in 1998 and started work on our DB conversion tool in mid 1998 (EM4).
We  had  around  10  locations  live with triangulation on 1/1/1999 and our
first  DB  conversion  went live in May 2000 (1st month end after financial
year  end  -  seems  to  be the most desired conversion time) and we have a
number  who went live on 1st Jan and more will go live every month end from
now  on.   We  always  work  with  a  customer  when designing software and
designed   both  triangulation  and  DB  conversion  with  Ciba  Speciality
Chemicals and Leo Laboritories.  It was designed from the outset to convert
ANY AS400 externally defined database.   All programs are generated on site
based  on  the  databases  selected  for  conversion  with the exception of
supplied  programs for the BPCS GL.   We also supply a popup calculator for
BPCS  that  uses  GCC  and  the  Euro  conversion  factors to perform fully
triangulated  caclulations  -  very  handy  during reconcilliation and post
conversion for the users. EM4 will convert any currency to any currency, by
company (a field up to 10 alpha can be used for company code) and/or global
data, just by generating the appropriate conversion factor.   It is easy to
convert  back from the Euro if a country decides to leave (you never know -
there  is  no  legislation to stop a country from going back!) although you
would have 2 balancing lines for each journal.
I will be happy to answer any questions on or offline regarding all aspects
of  the  Euro.    I  had  an  article  in  the March 2000 issue of News/400
outlining some of the issues that should be looked at.


Bill Chisholm
Technical Director





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