Transcript International and Global Oracle Implementations Myths and

OAUG Collaborate06
eBS Release 12
Impacts on Multi-Nationals
- Organizations, Accounting
& Taxes
Hans Kolbe, Celantra Systems Inc.,
Alex Fiteni CMA, Fiteni International LLC
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Why this Session?

BECAUSE… The last major release of Oracle applications, Release 11i, has
brought us many key advantages in technology and functionality
–
The initial problems in that release have often overshadowed the functionality
enhancements
– For many companies it has taken years until they were able to integrate new
functionality and take advantage of the new architecture

WHEN ….. Oracle E-Business Suite Release 12
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Currently said to be made available by the last quarter of 2006
Limited information and presentations available**
Indications are that great opportunities for multi-national companies
Oracle promises to get through the limitations of multi-org segmentation to a new
paradigm of “Data Segmentation AND Processing Efficiencies” in support of a
Shared Service Architecture for international implementations
– Improvements in development, testing, and release processes will hopefully
provide a less risky migration

THEN ….. An early start to the discussion on the content and functionality of
the upgrade now may assist users to prepare for and evaluate their
implementation options
** Openworld 2005 Presentations
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Goal of this Session:

Review Key initiatives of Release 12 in the finance area and their
impact:
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Multi-Org Access Control
Ledger and Ledger Sets
Sub-Ledger Accounting
New Information Delivery
Tax Compliance Functionality
These elements impact different organizations in very different ways
For discussions purposes, we have divided existing Oracle
implementations into three groups of organizational structures and we
will review the Rel 12 architecture on each group:
– “Top Down” structures with global processes and shared service
implementations
– “Customized” structures with modules and feeder systems spread across
multiple instances and environments
– “Bottom Up” structures with separated entities and processes,
collaborating in consolidation and planning only
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What This Session Is NOT About!

Solving specific issues in 115i and/or 12
 Detailing specific functionality in R12
– In fact, we are limiting discussion to slides
24-25 of Seamus Moran Release 12 preview –
Sep 2005

Providing specific advice or
recommendations on upgrade or
implementation strategies for Release 12
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Multi-Org – Now and Then
Set of Books
Ledger
(Accountability)
Legal Entity
Organization
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Organization
(User Access
& Security)
Legal Entity
(Compliance)
BSV
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Multi-Org Access Control
Objective: Support SSC – Avoid duplication of data
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Question: Access - Multi-Org paradigm “Legal Entity above
Operating Unit” remains?
Considerations: Most SSC’s operate for multiple LE’s and across
countries and languages. This may help, but greater flexibility is
needed. Need to be able to flexibly nominate data and transactions to
legal entities. We will be able to use this capability to resolve certain
operational problems
Question: Can data be nominated to be available to multiple OU
and LE s?
Considerations: It seems this also stays within the same paradigm.
Bank accounts is mentioned specifically to be setup across OUs within
one LE. We need this for customers, vendor addresses and sites – like
inventory
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Multi-Org Access Control
Objective: Access to Transactions across
across LE and OUs
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Examples:
AR: Receive payment for one entity’s invoice into another entity’s bank
account
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AP: Make payments for one entity’s invoice from another entity’s bank
account
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Automatic Credit Limit calculation and updating for one customer across many
entities
AP: Enter Invoice in SSC without regard to legal owner
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automatic IC balancing with additional rules
AR: Book one cash receipt and apply cash to invoices from multiple legal
entities
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automatic IC balancing with additional rules
Application finds correct owner based on PO or other parameter
NOTE: IF they occur within the same LE, some of those will be possible (AR
Receipts and AP Payments)
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Inter-company Transactions
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UNFORTUNATELY, NO STRONG STATEMENT
FROM ORACLE AVAILABLE
– Product movement: Returns and changes on internal orders,
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Pricing, Audit Trail
Inter-company Non-Product transactions
Non-billable or non-shippable items (demos, consignment
inventory, samples)
Fixed Asset Inter-company Transfers
Reconciliations
Banking Off-Sets
Overall, important improvements in 11.5.10 functionality
that will continue to be expanded, but no overall integrated
solution visible
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Sub-Ledger Accounting

Separating the Accounting from the Transaction itself
is a GREAT STEP forward:
– Rules are more flexible and can be maintained in one place
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Accounting is stored in separate tables, simultaneously
accessed from GL and sub-ledger. No GL to sub-ledger
reconciliations anymore
Current modules are operating this way:
– OPM (Sub-Ledger Accounting Setup and Tables)
– AX Global Accounting Engine

Overall, very powerful improvements for accounting
flexibility and dual posting requirements in international
roll-outs.
– Unfortunately user gain will be limited, because sub-ledger
accounting still occurs
the strict
frame work
Release within
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About
Us:
Celantra Systems provides international program management
services with a strong focus on multi-org, inter-company, and global
compliance and implementation issues. Celantra Systems also offers
specialized software tools to augment application functionality in
global implementations. Celantra’s consulting and technical services
can add valuable impact in the integration of Oracle Apps with
boundary systems such as SAP, People Soft, trade and customs
compliance systems and others.
Hans Kolbe has managed and advised software implementation
projects for over 15, global projects for over 6 years. His extensive
knowledge on Oracle applications is combined with a formal
background as a German attorney, trained in international and
comparative law.
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Order
Management
Procurement
Advanced tax
Engine
Accounts
Payable
Requisitioning
Oracle
Taxes R.12
Powerful functionality.
Alex Fiteni
Oracle Release 12 Seminar
Direct and Indirect Taxes
Tax Ledger
 R11i and prior

Tax Calculation
Separate tax
engines for each
transaction flow
 Release 12

 Regime Based
 US Sales Tax
Outside Tax
Engine
Hooks
Single
Source of
Truth
FX Reports
 Transaction
Data driven
 Value Added
Tax
 Tax Rules and
Formulae
 Movement
Taxes in L.A.
Multiple Taxes
On Transaction
 Tax
Registrations
tied to Legal
Entities
 Withholding
Tax


Single Tax Engine
across all flows
Tax reporting
Ledger is view and
extract based

External tax
engines for US only
Tax Reporting
Ledger integrated
with XML Publisher

Multiple External
Tax Engines
supported
E-Business Tax
R12 Considerations
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
Implementation
Upgrade
– Leverage new Tax
– Upgrade ‘as is’ may not
Registration and Legal
Entity structures
– Create own rules or use
seeded rules to meet local
compliance needs
– Carefully design tax
classifications to meet
larger needs
serve all local compliance
needs well
– Develop a plan for
including under-served
markets
– Leverage Tax registrations
& Legal entity structures
– Create value with custom
rules
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Fulfillment
Cycle
Procurement
Cycle
R12 Accounting
Engine
Asset
Management
Projects & ERP
Costing
Oracle
Accounting
R.12
Powerful functionality.
Alex Fiteni
Oracle Release 12 Seminar
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Accounting Approaches
Accounting
Rules
 R11i and prior

Embedded
accounting in
each product

Inconsistent
methods of
configuration
Accounting
Engine
Multiple
Accounting
Representations
Single
Source of
Truth
Ledger(s)


 Release 12
AX accounting
engine limited
to certain
regimes
Difficult to
modify
accounting
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
Multiple
Accounting
Representations of a
transaction

Centrally
defined
Accounting
Rules

Single
repository
for all
accounting
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R12 Considerations
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Implementation
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Upgrade
Accounting drivers may differ for
– Exclusive and Shared Ledger
each reporting requirement
models will be supported:
 Exclusive – One Set of Books and
Separate accounting for
One Operating Unit
Management Performance
 Shared – One Set of Books, Many
reporting from local GAAP
Legal entities and Operating Units
requirements
– AX will be upgraded
Automate certain compliance
reporting with Multiple
 Pre-Upgrade
Accounting Representations
– Leverage Ledger Sets: Impacts of
(MAR)
separating Legal Entities (as
Impacts of an MAR environment
BSV’s) into Ledgers within a
on shared services, transaction
Ledger Set
processing, chart of accounts,
– Allow time to test, review &
ledger structures, etc.
reconcile results
Monitor OLTP performance
 Post-Upgrade
Leverage IASB and XBRL
– Leverage MAR: Re-configure
standards to improve financial
Ledgers & Accounting where
reporting supply chain
compliance is performed mostly
Importance of audit, reconciliation
off-line
and controls to ensure quality of
accounting information system
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About Us:
Fiteni International LLC
Our goal is to provide our clients with a global perspective of the impacts of local regulatory
requirements on their IT infrastructure and back-office systems, and providing feedback on
compliance risks and mitigation.
Our expertise in Oracle eBusiness Suite implementations, especially project management and
applications configuration optimization has helped clients to meet their fiduciary, indirect tax
compliance and internal control requirements. We have been used successful in a wide variety of
business sectors, as well as the not-for-profit sector, and government agencies.
Our focus on client needs is designed to ensure that an organization develops global business practices
that create value throughout the financial reporting supply chain.
Alex Fiteni CMA
Alex Fiteni is a principal of Fiteni International LLC, and brings a wide range of experience in both
accounting and information systems to his clients. Alex rose through the financial organization,
completing his career in that sector as CFO. As an information management specialist, he has held a
variety of positions in as a contributor and in management, most recently as a Director of
Applications Development with Oracle Corp. Alex is a a current member of the Society of
Management Accountants of British Columbia, Canada; and is a member of the OASIS Tax XML
Technical Committee.
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Thank you !
Hans Kolbe, Celantra Systems
[email protected]
+ 1 (415) 730 – 1131
Alex Fiteni, Fiteni International LLC
[email protected]
+1-650-799-5949
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