So far, everything seems to be working. At Siemens VDO, ask an employee for a budget number and the answer is likely to be in euros. And why not? The advantages have been considerable:
FEWER EXCHANGE RATE COMPLICATIONS.
Camp Dresser & McKee, a Cambridge, Massachusetts, environmental engineering consultancy, upgraded its project accounting and financial application software in 2002. Before the euro, it would have included routines to convert dollars and financial reports to assorted European currencies, so that employees in Europe and the United States could get real-time access to project numbers. After the euro, says CFO Bob Anton, the company was spared the time and expense of all but one conversion process.
REDUCED TRANSACTION COSTS.
Bankers throughout Europe, says Keith Stock, a global vice president for Cap Gemini Ernst & Young, are probably still scrambling to find ways to replace the revenue lost from changing money. U.S. and European companies no longer need extensive hedging systems to account for currency fluctuations, further cutting costs. A typical multinational would have had extensive currency hedging operations in each country in Western Europe; now it needs just one.
CUT RISK IN ASSESSING BUSINESS DEALS.