Despite the warnings, EMU and the year 2000 may arrive with many companies unprepared.
Talk corporate information technology these days, and almost inevitably the conversation turns to the problems of the year 2000 and European monetary union. Dubbed the "terrible twins" of the millennium in a report published today by the accountants and management consultant Price Waterhouse, they have fuelled countless stories of impending chaos and mounting skills shortages as organisations battle to prepare themselves.

Price Waterhouse's study of IT in the financial services industry in fact finds that there is a great divergence between the year 2000 problem and EMU in terms of readiness. More than a third of respondents claim to be fully prepared for the year 2000, with only 2 per cent admitting they have not thought about the implications. In contrast, only about 3 per cent of organisations claim to be fully prepared for EMU.

However, as Alan Johnson, a financial services partner at PW, points out, it is unclear how much real progress has been made even with regard to the year 2000 issue. "Real and anecdotal evidence suggests there is still much to be done by many organisations; time is running out and many have realised the significance of the changes relatively late," he says.

Meanwhile, financial services organisations are set to spend more on IT than they have for several years, according to this latest annual survey of the field. Among senior IT executives, 63 per cent of are ready to increase their budgets, double last year's figure.

Moreover, the average overall level of IT spending has risen to nearly 17 per cent of companies' total costs, while in investment banking it is nearer 25 per cent. And just under half of those responding to the survey foresee increased investment in systems development, which has previously had the lowest investment predictions.

However, the survey also finds that, despite the expected increase in IT expenditure, the success rate of projects - in terms of delivery on time and within budget - has fallen. The number of organisations reporting a success rate of less than 25 per cent has more than doubled since the 1994 survey. Overall, a quarter of executives report a success rate of less than 50 per cent.

Mr Johnson attributes that fall to the continuing challenges facing IT specialists. There is still "a lot of change happening in technology and the environment", he says. "There has been a greater effort to integrate IT more fully into the business strategy, so there are lessons to be learnt throughout the organisation."

Nevertheless, fresh issues are emerging. For the first time, ensuring the effective delivery of systems has become the top priority for nearly 60 per cent of respondents. That is closely followed by the need to improve the systems development process. Together, says the report, those issues represent a significant shift in the priorities of IT executives and highlight the pressures they are likely to face in the future.

The trend is also contributing to predictions of significant increases in staff numbers: more than half of respondents to the survey expect big growth for the first time in the seven years that PW has conducted the survey.

However, while the "double trouble" of the year 2000 and EMU is creating a demand for people with "old skills", more demanding users and the moves towards greater integration of traditionally isolated IT departments with the rest of business are leading to a need for different skills. In particular, there is a demand for people who can escape from the jargon that afflicts any specialism, and genuinely assist colleagues in conducting their businessn