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The Tale of Two Cities: A Global Implementation of Oracle 12.2.3
Prepared by:Paul Kirch, FusionCloud Consulting
Session ID#:
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Date/Time Location Session Session Title Presenter (s)
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Summary:Paul is a senior program manager with over 25 years experience managing programs, with 10+ years delivering large complex global business transformation projects. Paul has worked on and/or delivered 17+ Oracle full life cycle implementations, and has extensive international experience working in Asia, Europe, South America, the Middle East, and other principal countries.
In addition to his package and cloud-based implementation experience, Paul has also led ERP-vendor selection programs, business process reengineering/ transformation programs, business case development , and supply chain effectiveness initiatives. Paul has led programs utilizing Oracle Financials, Supply Chain, HR/Payroll and Projects modules in all releases from Oracle 9.4.2 through Oracle R.12.2.3 and Fusion Release 9.
Paul lives in San Francisco, California and is currently working in the San Francisco area on a global implementation project.
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Experience:Director, Oracle EBS and Fusion Practice at large India-based Integrator Developed proposals and led practice for India-based system integrator. Responsibilities
included creating artifacts for project delivery methodology, creating implementation methodology for Fusion project and hiring staff into the Fusion Practice. Successful in selling Fusion projects to 1 regional restaurant chain and to a government national lab.
Client: Major High End Clothing Retailer | Role: Program/ Project Manager Led a 12 month Oracle R12 Assessment and Implementation project in which project team
assessed the impact of migrating over 400 custom objects to Oracle R12 (12.1.6). Project scope included Oracle R12 functional and technical upgrade and reimplementation of Oracle Projects modules (Project billing, costing, management modules) Project solution included Oracle STT eB Tax solution, Oracle Procurement, iSupplier, HR/ Payroll and OIC. Project value: $4.2 million.
Client: Major Games Software Development Company| Role: Financials & Tax Lead Led a Order to Cash (OTC) project team tasked with implementing Oracle SOA Suite of products as
part of an Oracle R12 (12.1.6) upgrade project. Team reversed engineered a number of major modifications created during the Oracle 11.5.10 implementation, using Oracle SLA, Ledger/Ledger Sets, and eB Tax to replace customizations with standard “out of the box” functionality. Project team size: 25 consultants. Project scope: Worldwide, including Asia Pacific and Europe.
Client: Major Construction Company (Brazil & U.S)| Role: AP Lead and U.S Tax SME Led a project team engaged in the United States implementation of Oracle R12 (12.1.4). Project
scope included: Oracle Financials, including Oracle eB Tax (Sales & Use Tax), Supply Chain, HR and PeopleSoft Payroll. Project team developed a template to allow company to implement a global sourcing/ procurement company for Brazilian-based construction project teams.
Paul Kirch, Principal
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■FusionCloudConsulting■Inflection Point■Offering Overview■FusionCloud Consulting■Methodology and Deliverables■Website■LinkedIn Page
■“A Tale of Two Cities”
Introduction
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FusionCloud Consulting
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The Public Cloud
■ Public clouds are owned and operated by third-party service providers. Customers benefit from economies of scale because infrastructure costs are spread across all users, thus allowing each individual client to operate on a low-cost, “pay-as-you-go” model.
■ Public cloud infrastructure is typically larger in scale than an in-house enterprise cloud, which provides clients with seamless, on-demand scalability.
■ Customers on public clouds share the same infrastructure pool with limited configurations, security protections and availability variances, as these factors are wholly managed and supported by the service provider.
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■ On-Premise Private Cloud: The on-premise, private cloud is an “internal cloud” where applications are hosted in the organization’s own data center. An on-premise private cloud provides standardized processes and protection, but is limited in size and scalability. The firm continues to incur the capital and operational costs associated with the physical infrastructure, but contracts out patch application and day-to-day management of the data base and applications to a 3rd party services provider.
■ Externally-Hosted Private Cloud: The externally-hosted private cloud model is a ERP application managed by an external cloud computing services provider on infrastructure or equipment physically located outside of the enterprise walls. The service provider facilitates an exclusive cloud environment using multi-tenant security features on fully dedicated or shared servers.
The Private Cloud
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ERP Software is at an Inflection Point
Development of ERP Software
1995
1999Widespread adoption of the internet
Emergence of ERP SAS offerings
2011
Widespread adoption of ERP as a SAS offering on “the cloud”
2020?
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The Market
Forrester Research
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Forrester Research
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Offering Overview
■ Consulting ■ Management■ Functional ■ Technical
■ Training■ On-site■ On-line■ Mobile
■ Staff Augmentation
Training
Func TechConsulting
Staffing
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FusionCloud Consulting
■ Oracle R12 “Globalization in a Box” offering:■ Oracle global implementation consulting, including:
▪ Intercompany transactions for global implementations▪ Worldwide tax configuration and testing
■ Oracle Fusion Applications offering:■ Oracle Fusion Cloud or On-premise Applications
▪ Cloud Strategy Consulting (i.e. Which vendor?)▪ Oracle Fusion Cloud or On-premise Implementation Consulting
■ Workday Applications offering:■ Workday (Cloud) Applications
▪ Workday to Oracle R12 Integration Consulting (HR/Payroll)▪ Workday Financials Implementation Consulting
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Methodology and Deliverables
Analyze & Prepare
Fit/Gap &“Imagine”
ConfigureDeploy &
TrainSupport
Questionnaires and pre-prepared workshop materials
Rapid prototyping,
data extraction and load,
process re-design
Configuration using “best practices”
configuration and templates
Development of company specific
training materials and process documentation
1 2 3 4
On-shore and off-shore support and maintenance
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Methodology
Deliverables•
Questionnaire
• Presentation
• Process Design
• Data Load Scripts
• Initial Configuration
• Final Process Flows
• BR100
• Loaded Data
• Training Materials
• Detailed Process Docs
• Test Procedures
• Test Cases
• Test Results
• Support Procedures
• Management/ Admin
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Fusion Applications
■ Human Resources▪ Identify Management▪ Human Resources▪ Payroll
■ Financials▪ General Ledger▪ Receivables▪ Payables▪ Fixed Assets
■ Intercompany
■ Projects
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Fusion Applications Implementation and Project Management
■ Implementation: access to the most experienced Oracle Fusion Applications talent available
■ Project Management: seasoned management team with individual experience of 25+ years in Oracle, and 15+ years managing Oracle projects
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Cloud Consulting Strategy
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Website
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LinkedIn Page
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AgendaA Tale of Two Cities
■Project Overview■Multi-Org Concepts■Intercompany■Conceptual Understanding■Introduction to eB Tax
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Project Overview
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■ The R12 project envisioned re-implementing Oracle R12, rather than performing a technical upgrade. The driver behind this decision was that the Oracle 11i environment was heavily customized and did not take advantage of Oracle’s features.
■ This said, the R12 project’s stated goals were to:▪ Globalize▪ Standardize▪ Simplify
▪ The “Two Cities” in the presentation title are:▪ Newark, California▪ Cork, Ireland
Project Overview
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■ Representation from EMEA, China, and the Americas managed by first by IBM and, later, by in-house Program Management Office (PMO)
■ Project scope: redesign of the multi-org structure taking full advantage of Oracle R12 functionality and incorporating the use of Secondary Ledgers for IFRS reporting and HFM upload
■ Project team engaged in redesign of intercompany processes used to move materials between the manufacturing organization based in China and the distribution centers based in the major markets around the world
■ Project includes migration to a single global banking partner. ▪ Project envisions integration with Oracle Web Center for AP invoice capture and imaging
functionality.■ Project is slated for completion in April, 2015 on Oracle 12.2.3. This will be one of the first
projects to go live on the latest release of Oracle.■ Project modules in scope included: GL, AGIS, Oracle eB Tax, Oracle Payables, Oracle Purchasing
and iProcurement, iSupplier, Oracle Advanced Supply Chain, Oracle Advanced Planning, Oracle Order Management, Oracle Receivables, among others
Project Organization and Scope
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Multi-Org Concepts
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■ Ledgers and Ledger Sets
■ Company Codes/ Balancing Segment Values (BSVs)
■ Legal Entities
■ Business Group
■ Operating Units
■ Inventory Org
Multi-Org Concepts
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■ In Oracle R12, Oracle introduces the concept of a Legal Entity in Oracle General Ledger. The Legal Entity or Establishment captures the VAT Registration Number and creates a legal address
■ Oracle uses company codes or Balancing Segment Values (BSV’s) to define the level at which debits=credits in Oracle General Ledger.
■ At the subledger level, Oracle uses the concept of Operating Units to define separate business units
■ The Legal Entity can be used to “lock down” BSV’s. This functionality is extremely important in Oracle eB Tax in determining the appropriate rates to use on a specific transaction (place of supply)
■ Inter-company transactions are defined as transactions between related-company legal entities; Intra-company transactions are transactions between BSVs that belong to the same legal entity
■ Intercompany transactions need to be understood from a transaction processing, tax compliance, and accounting perspective
Definition of Terms
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IFRS
IFRS EUR
Secondary Ledgers
Legal Entity/BSV’s
OU- Manufacturing
Inventory Org
OU- Distribution
OU- Sales
HQ Company
EMEA Ledger Set
4
EUROPE EUR
423 429
K
4373
H
Russia RUB
Primary Ledger
6
M ON L
Global Inventory INV
4 6 UK ES IR Nordic EU OPSNOK
RU
54348 444482493 4279
494
1
1
E
FR4248
IT4269
JIA
Europe USD
4226
8 DE4288
4314
442
5
74326
IT24388 450
NL PL458
FI4849
UAE9997
HRV4898
TR9999
SA8880
Ukraine
4910
GR
4920
RO4957
EUROPE EUR
2
4605
IFRS EUR
3
3
G
4517
4559
RU
RU4568
2
FB
C
D
9923
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Intercompany Transactions in R12
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■ Operating Unit Intercompany Functionality: Oracle’s Operating Unit is designed to hold an operational entity and its transactions separate from others OU's. In order for Oracle’s Shipping Networks/ Intercompany Transaction Flows to work correctly, two operating units must be defined which transact with one another. Oracle uses the two operating units structure to enable intercompany transactions for OM, INV, PA , AR, and AP transactions.
■ Balancing Segment Intercompany Functionality: The GL Balancing Segment is designed to maintain an entity’s financial information. With its automatic balancing of I/C journals Oracle’s GL module provides I/C functionality that is independent of the OU concept, described above.
■ AGIS Intercompany Functionality: In Oracle R12, Oracle’s AGIS extends the GIS functionality created in 11i and allows users to create intercompany transactions, including the underlying I/C AR/AP invoices. The relationship and entries between Initiator and Recipient in AGIS define which entities can transact and create intercompany AR/AP transactions, and whether these transactions require approval.
Intercompany Overview
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Asia Europe
0% VAT – Manufacturing
Export
Reseller/Distributor
HQ
Bill From
Ship From (EU Registration)
Ship To (Registered/ Non Registered) ** Reseller in Netherlands, then NETH
21%. Other member state, VAT Registration, etc.
#1 Internal SO/IR
#4 AR
#3 Interco AR/AP
#4 Material# 3 Interco AR/AP (0%
markup, No VAT)
HQ Country Registration/ No
VAT
#2 Material
Import from CNY
NETH Offset VAT of 21%
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Supported Transactions flows: (from Oracle White Paper)
▪ Internal Drop-Ship (older functionality – 10.7)
▪ External Drop-Ship (released in 11.5.3)
▪ Standard Single Hop Inter-company (11.5.9)
▪ Global Purchase Agreements (GPA) (11.5.10)
▪ Global Intercompany/ Advanced Intercompany System (GIS/AGIS)
▪ Double Hop Inter-company (not supported in Oracle R12)
History of Intercompany in Oracle
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Conceptual Understanding
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Customer
Entity ASelling Entity
INV-Org A
Bill-to Ship-to
Entity BShipping
EntityINV-Org B
OM: Book Sales Order - Reserve with Ship-From Warehouse
of Inv Org B
AR: Trade Invoice To Customer
OM: Pick Release, Ship-Confirm, Inv Interface, Costing
AR: Create IC Invoice To Entity A
AP: Create IC AP Invoice from Entity B
Drop Ship
IC Invoice
Sale and Invoice Shipment
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Customer
Entity A“Selling
Entity”INV-Org A
Bill-to Ship-to
INV-Org B
PO: Internal RequisitionPO: Create Internal Order
OM: Import Internal Sales OrderOM: Reserve, Pick Release, Ship-
Confirm, Inv Interface, Costing
AR: Create IC Invoice To Entity AAP: Create IC AP Invoice from Entity B
Sale and Invoice – not directly related
Entity BShipping
Single Node Intercompany
Shipment and IC Invoice
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Global Purchase Agreement(Centralized Procurement)
Supplier
Entity A“GPA Entity”
INV-Org A
PO Pay
INV-Org B
PO: Purchase Order (Auto)
PO: Create Requisition
AR: Create IC Invoice To Entity AAP: Create IC AP Invoice from
Entity B
Receive Purchase Order, Ship to
ShipmentEntity B
“Procuring”
Requisition for ItemOn GPA
INV-Org C
INV: Create Intercompany ARINV: Create Intercompany AP
INV: Create
AP: Create IC Invoice To Entity AAR: Create IC Invoice to Entity B
Entity C“Accounting” Intercompany AR
Intercompany AP
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Customer
Entity A“Selling Entity”
INV-Org A
Bill-to Ship-to
INV-Org B
OM: Import Internal OrderPick, Pack and Ship
PO: Create Internal RequisitionPO: Create Internal Order
AR: Create IC Invoice To Entity CAP: Create IC AP Invoice from Entity C
Not directly related to transaction
Shipment Entity B“Procuring”
IR/ISO
INV-Org C
INV: Create Intercompany ARINV: Create Intercompany AP
INV: Create
AP: Create IC Invoice To Entity AAR: Create IC Invoice to Entity B
Entity C“Accounting” Intercompany ARIntercompany AP
Multiple Hop Intercompany
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Global Tax
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■ Oracle’s Stated Direction: Oracle plans to eliminate tax integration with 3rd party tax-rules engines such as Sabrix, Taxware and Vertex. With Oracle Fusion, Oracle will not support 3 rd party tax rules integration, though the upload of content (e.g. tax rates) will still be possible.
■ Integration: Oracle eB Tax is tightly integrated with Accounts Payable, as well as Oracle Accounts Receivable, Order Management, Purchasing and Oracle Channel Revenue Management modules. By using Oracle eB Tax, companies eliminate the need to develop or implement integration to the 3rd party tax rules engine.
■ Fusion: Oracle eB Tax is one of the few modules that remains virtually unchanged in Oracle Fusion. (The other modules) are the Payments Engine and the Supplier Master in Oracle AP and Multi-Org in GL, which is mostly configuration and not necessarily a module.) With Fusion, Oracle has built an enhancement that will allow for the creation of tax regimes, rates and rules in a spreadsheet for automated upload.
Why is eB Tax Important?
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General Ledger
Accounts PayableAccounts
ReceivableeB Tax
Purchasing
Order Management
Oracle Channel Revenue
Management
Oracle Lease Management
Tax
InvoicesCredit Memos
Tax
InvoicesCredit Memos
AP Invoices
Purchase OrdersRecepts
TaxCredit Memos
Tax
Journals
Journals
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Tax Reporting
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Conclusion
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Release GA Date Premier Extended Sustaining11.0.3 May, 1999 February, 2002 Not offered. January, 200911.5.1-11.5.6 May, ‘00-Jan, ’02 July, 2006 “ Indefinite11.5.7 May, 2002 May, 2007 “ “11.5.8 November, 2002 November, 2007 “ “11.5.9 June, 2003 June, 2008 “ “11.5.10 November, 2004 November, 2009 December, 2014** “12.0.0 January, 2007 January, 2012 January, 2015 “12.01 April, 2007 April, 2012 April, 2015 “12.02 July, 2007 July, 2012 July, 2015 “12.03 October, 2007 October, 2012 October, 2015 “12.04 January, 2008 January, 2013 January, 2016 “12.05 May, 2008 May, 2013 May, 2016 “12.06 November, 2008 November, 2013 November, 2016 “12.1.1 May, 2009 May, 2014 December, 2018 “12.1.2 December, 2009 TBD TBD “12.1.3 August, 2010 TBD TBD “
12.2.1 September, 2013 TBD TBD “
12.2.2 October, 2013 TBD TBD “
12.2.3 May, 2014 TBD TBD “
** 11.5.10 desupport notice from Metalink, (Doc ID 806593.1)
Oracle Desupport Dates
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The basic questions for companies that are on Oracle (11.5.10
or R12) are:
Do we upgrade to Oracle R12.1.3 or do we go for Fusion?
Should we develop a “cloud” strategy?
What are our options?
E-mail: [email protected] Phone: 408-316-5899
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Please complete the session evaluationWe appreciate your feedback and insight
You may complete the session evaluation either on paper or online via the mobile app
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Appendix