R12 Financials Why Upgrade - Oracleopnpublic/... · • Inter & Intra – Company Balancing....
Transcript of R12 Financials Why Upgrade - Oracleopnpublic/... · • Inter & Intra – Company Balancing....
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Business Case for Upgrading toE-Business Suite Financials Release 12
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The following is intended to outline our generalproduct direction. It is intended for informationpurposes only, and may not be incorporated into anycontract. It is not a commitment to deliver anymaterial, code, or functionality, and should not berelied upon in making purchasing decisions.The development, release, and timing of anyfeatures or functionality described for Oracle’sproducts remains at the sole discretion of Oracle.
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Agenda
• Introduction & Overview
• Upgrade Paths
• Business Goals• Standardization
• Centralization
• Simplification
• R12 Upgrade Impact• Process Improvements
• Detailed impact in key feature areas
• So, Why Should you Upgrade to Release 12?
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Business Case for UpgradingUnderstanding the Options
11i
11.5.10
12
Fusion
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Complexity AboundsBarrier to Finance Effectiveness
Source: The Agile CFO, IBM Business Consulting Services
Data warehouses
ERP instances
Planning/forecasting tools
Finance common platforms
Functional best practices
Process simplification
Common processes
Standard policies and rules
Standard chart of accounts
17%17%
24%24%
27%27%
27%27%
12%12%14%14%
35%35%
38%38%
56%56%
0 20 40 60
Pro
cess
Tech
no
log
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Fewer than 50% of
companies haveachieved their processand technologyimprovement goals
Percent of Companies Implementing Process and Technology Improvements
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Key Decision-DriversGeneric Reasons to Upgrade
Think, Manage & Work:Think, Manage & Work:GloballyGlobally
Fusion MiddlewareFusion Middleware
300+ New Features300+ New Features
Applications UnlimitedApplications Unlimited
Fusion BaselineFusion Baseline
New Financials ArchitectureNew Financials Architecture
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UpgradeUpgrade
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Business Goals
CentralizeCentralize
StandardizeStandardize
SimplifySimplify
Business Processes& Information
Business Functions
Business Systems& Maintenance
Business Processes& Information
Business Functions
Business Systems& Maintenance
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Key Driver: Standardization
50%50% Senior executives say simplificationSenior executives say simplification
is driving theis driving the finance agendafinance agenda
Source: PWC Management Barometer
Reducing reliance on spreadsheets33%33%
Optimizing the finance organization and itsreporting structure
52%52%
Adopting best practices58%58%
Standardizing and integrating finance systems59%59%
Standardizing policies and business rules66%66%
Standardizing operating practices and controls69%69%
Identified as a Major Focus AreaIdentified as a Major Focus Area
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StandardizationIdentifying the benefits
•• Consistency & UnderstandingConsistency & Understanding
•• Broader View of Financial DataBroader View of Financial DataInformationInformation
•• ComplianceCompliance
•• Improved CommunicationImproved CommunicationBusiness Policies & RulesBusiness Policies & Rules
•• Improved EfficiencyImproved Efficiency
•• Lowered costsLowered costs
•• ConsistencyConsistency
Best PracticesBest Practices
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Business Goals
CentralizeCentralize
StandardizeStandardize
SimplifySimplify
Business Processes& Information
Business Functions
Business Systems& Maintenance
Business Processes& Information
Business Functions
Business Systems& Maintenance
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CentralizationIdentifying the benefits
•• Improved ConsistencyImproved Consistency
•• Less DuplicationLess DuplicationDataData
•• Focused UsersFocused Users
•• Improved EfficiencyImproved Efficiency
•• Cost ReductionCost Reduction
FunctionsFunctions
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Responsibility Responsibility Responsibility
Role-Based AccessMore Productive Shared Services Operations
Holland
Legal Entity
Denmark
Legal Entity
Belgium
Legal Entity
Perform multiple tasks across operating unitswithout changing responsibilities
ResponsibilityResponsibility ResponsibilityResponsibility ResponsibilityResponsibilitySingle Responsibility
Functional TasksAccounting
Billing, Dunning& Collections
Procurement
Order Management
Payments
Data Management
Holland
Operating Unit
Denmark
Operating Unit
Belgium
Operating Unit
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General LedgerThe Center of ERP
Purchasing
GeneralLedgerGeneralLedger
Cash Mgmt
Receivables
Inventory
Assets
Projects
Payables
Other
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Other
Release 12 – Evolutionary New ArchitectureCentralizing Key Architectural Components
Purchasing
GeneralLedger
Cash Mgmt
Receivables
Inventory
AssetsPayables
Projects
GeneralLedgerGeneralLedger
CentralizedAccountingCentralizedAccounting
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Release 12 – Evolutionary New ArchitectureCentralized Accounting
Purchasing
GeneralLedger
Cash Mgmt
Receivables
Inventory
AssetsPayables
ProjectsGeneralLedgerGeneralLedger
CentralizedAccountingCentralizedAccounting
Other
• Centralized Rules &Policies
• Centralized AccountingDefinitions
• Multiple Representations
• Single Source ofAccounting
• Improved Reconciliation
• Improved Reporting
• Drilldown Enabled
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Release 12 – Bank Account ChangesCentralized Bank & Bank Account Definitions
Intercompany
TradingCommunity
GlobalTax
CentralizedAccountingCentralizedAccounting
Banks &Branches
Purchasing
Cash Mgmt
Receivables
Inventory
AssetsPayables
Projects
Banks &AccountsBanks &Accounts
Other
• Internal & Customer &Supplier Banks
• Single Account forMultiple Operating Units
• Improved Reconciliation
• Centralized Credit CardData Model & Encryption
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Intercompany
TradingCommunity
GlobalTax
CentralizedAccounting
Banks &AccountsBanks &Accounts
Other
Purchasing
Cash Mgmt
Receivables
Inventory
AssetsPayables
Projects
CentralizedAccountingCentralizedAccounting
GlobalTax
GlobalTax
• Centralized Rules &Determination
• Improved Reporting
• Effective Dated Setup
• Tax Simulator
Release 12 – Global TaxCentralized Tax Determination & Reporting
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CentralizedAccounting
Intercompany
TradingCommunity
GlobalTax
GlobalTax
CentralizedAccountingCentralizedAccounting
Banks &AccountsBanks &Accounts
Release 12 – Trading Community ArchitectureCentralization Extended
Projects
Other
Purchasing
Cash Mgmt
Receivables
Inventory
AssetsPayables
TradingCommunity
TradingCommunity
• Suppliers
• Banks & Branches
• Tax Geographies
• Improved Consistency
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Release 12 – IntercompanyAdvanced Global Intercompany System
Intercompany
TradingCommunity
TradingCommunity
GlobalTax
GlobalTax
CentralizedAccountingCentralizedAccounting
Banks &AccountsBanks &Accounts
Other
Purchasing
Cash Mgmt
Receivables
Inventory
AssetsPayables
Projects
IntercompanyIntercompany• Intercompany Account
Definition
• Integration with Payables& Receivables
• Improved Reconciliation
• Inter & Intra – CompanyBalancing
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Release 12 – Centralized ArchitectureSolving Problems Now and in the Future
Intercompany
TradingCommunity
GlobalTax
CentralizedAccounting
Banks &Accounts
Cen
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Arc
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Arc
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Purchasing
Cash Mgmt
Receivables
Inventory
AssetsPayables
Projects
Other
• Improved Data Integrity
• Simplified & ConsistentUser Interface
• Shared Service CenterEnabling
• Groundwork for Fusion &Service-OrientedArchitecture
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Business Goals
CentralizeCentralize
StandardizeStandardize
SimplifySimplify
Business Processes& Information
Business Functions
Business Systems& Maintenance
Business Processes& Information
Business Functions
Business Systems& Maintenance
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SimplificationIdentifying the Benefits
• Consistency
• No RedundanciesCommon Understanding
• Simplified Processes
• Fewer Corner Cases
• Improved Efficiency
Cost Reduction
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Accounting Setup ManagerSingle Page for Accounting Setup
•Legal Entities
•Ledgers
•Currencies
•BalancingSegments
•SubledgerAccounting
•OperatingUnits
•BalancingOptions
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XML PublisherMaking Reporting Manageable
Separate data / layout / UI translation
Reportoutput
Flexibility
Reduced maintenance
Data Logic
Layout
Translation
XML Publisher
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Financial Reporting with XML PublisherNearly 400 Configurable Formats
23Tax25Internal ControlsManager
17SubledgerAccounting
92Globalizations
10Receivables14General Ledger
6Public Sector21FinancialsConsolidation Hub
120Payments10Common Modules
9Payables15Collections
6Loans3Cash
2IT Audit22Assets
FormatsProductFormatsProduct
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Upgrade Impact
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Upgrade Impact
• R12 Upgrade Details• Process improvements
• Upgrade details
• How you can be successful
Thursday 10/26: Technical Perspective on the EBS R12Financials Upgrade
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Upgrade Impact
• Works like 11i until you decide to use the new features• Technical Upgrade
• Transition to R12 new features incrementally and at your own pace
• Before and After: How we get you from 11i to 12?• Data Management with TCA
• Legal Entities and where they are used
• Tax and how you can use eBTax rules
• Ledger
• Multiple Organizations
• Subledger Accounting and how you can use SLA
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Data Management with TCALeveraging centralized data model
Oracle Fusion MiddlewareOracle Fusion Middleware
TradingCommunityArchitecture
TradingCommunityArchitecture
ERPERP CRMCRM 3rd Party3rd Party
PayablesPayablesPayablesPurchasingPurchasingPurchasing
Global TaxGlobal Tax PaymentsPayments
Suppliers
Geographies PartyInformation
CashCashManagementManagement
Banks andBranches
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• Suppliers defined in AP
• Supplier sites often replicated inmultiple Ous
• Could only pay a supplier
• Banks defined in AP/AR/CE,Payroll and Treasury
• Bank accounts often replicated inmultiple Ous
• No geography model
Before R12Before R12 R12R12
TCA in R12Centralized Storage and Maintenance
• Supplier becomes TCA Party
• TCA Party Site for each distinctaddress. No more replication.
• Oracle Payments can makepayments to any payee
• Bank and Branch become TCAParties
• Bank Account in CE, owned by aLegal Entity. OUs granted usagerights. No more replication.
• TCA Geography Model
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Legal Entity
• A Legal Entity is an entity identified through a registrationwith a Legal authority
• Legal Entities have the right to• Own property (assets, inventory, receivable, other LEs)
• Trade (borrow, sell, buy, incur expenses, employ)
• And the responsibility to• Repay debt (liabilities, equity)
• Pay Taxes
• Account for themselves (legal reports, audits)
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• GRE/LE in HR Organizations
• Weak association with otherentities and transactions
• Legal information scattered
Before R12Before R12 R12R12
Legal Entities in R12Not your old “HR Orgs”…
• New Legal Entity User Interface
• LEs own bank accounts
• LEs used in tax determination
• LEs store accounting in ledgers
• Centralized legal information
• Identification
• Address
• Contacts
• Establishments & Registrations
Facilitates compliance
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Legal EntityUpgrade Impacts
• Migration of 11i HR Organizations• GRE/LEs migrated as Legal Entities and Main Establishments
• LE’s country derived from country of location
• OUs (and inventory orgs) associated to the GRE/LE migrated asEstablishments
• TCA Parties for all!
• Migration of country-specific legal entity information
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Legal EntityWhere is it used?
• Default Legal Context• Specified for an OU
• Transactions entered for OU
• OU ties to LE through GL’s Accounting Setup flow
• Legal Entity stamped on transactions during upgrade• Payables
• Receivables
• Used for…• eBTax 1st party LE determination
• Statutory reporting
• Funds disbursement
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• User determines tax by assigningTax Codes
• Tax rules in code
• Global descriptive flexfields forcountry-specific tax attributes
• Granular setup at OU level
Before R12Before R12 R12R12
eBusiness TaxTax determination, not just tax codes…
• eBTax determines tax based onfacts about each transaction
• Tax rules you can see
• Tax attributes collected in fields onkey entities
• Configure tax rules once per regimeand share with your legal entities
Facilitates compliance
Improves auditability
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eBusiness TaxBusiness Benefits
• Minimize the need for detailed regional tax knowledgeMore accurate tax calculations than picking tax code
Increases data accuracy and facilitates compliance
• Simplify your tax rules with TCA’s Geography modelGroup countries
Compound rates for state, county, city
• Standard repository of tax lines for productsEasier reporting
Easier reconciliation to transactions and accounting
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E-Business TaxRegime-to-Rate Flow
•Tax ClassificationCodes and Rates
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eBusiness TaxProduct Uptake and Upgrade Impact
• Transaction Taxes for Procure to Pay and Order to Cash
• Replaces:• Global Tax Engine
• Automatic Tax Calculation
• Brazilian AP/PO
• General Ledger Automatic Tax Calculation
• Migrated in the context of 11i tax setup• Each OU becomes a Party, mapped to an Establishment
• Each Country of OU becomes a Regime
• 11i tax codes migrate to rule setup w/in a regime
• country-specific tax information rolled in
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eBusiness TaxTransition Options
• Identify opportunities• Look at your tax exceptions or manual processing (e.g. item,
intended use, place of supply)
• Look for commonalities and define simpler rules
For example: set up a classification rule to apply to manysuppliers or utilize the TCA Geography model
• Gradually layer eBTax rules on top of 11i Style tax• For example: set up rules for VAT recovery so system can
determine domestic vs. foreign transactions for you
• For example: Set up rules for USE tax
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• Set of Books
• MRC
• AX Posting Set of Books
• AP Cash books
• FA tax book
• HR Organizations: GRE/LEassociated with a Set of Books
Before R12Before R12 R12R12
General LedgerUpgrade Impact
• Ledger & Accounting Setup
• Primary Ledger with ReportingCurrencies
• Secondary Ledgers
• Accounting Setup Manager: LegalEntity associated with Ledger
One place to manage globalaccounting rules, currencies,ledgers and sets
Link maintained to OUs
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Responsibility Responsibility Responsibility
Role-Based AccessMore Productive Shared Services Operations
Holland
Legal Entity
Denmark
Legal Entity
Belgium
Legal Entity
Perform multiple tasks across operating unitswithout changing responsibilities
ResponsibilityResponsibility ResponsibilityResponsibility ResponsibilityResponsibilitySingle Responsibility
Functional TasksAccounting
Billing, Dunning& Collections
Procurement
Order Management
Payments
Data Management
Holland
Operating Unit
Denmark
Operating Unit
Belgium
Operating Unit
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Multiple Organization Access ControlUpgrade Impact
• 11i Operating Units preserved in R12
• “11i Style” single org access preserved after upgrade
• OU field on user interface• All transactions
• setup data specific to OU, like transaction type
• Enhanced Multi-Org Reporting and Processing• For example: submit the Payables Open Interface Import and import
records for all Ous
• To take advantage of Multi-Org Access Control• Define security profiles
• Assign security profiles to responsibilities w/MO:Security Profile profileoption
• Optionally set MO: Default Operating Unit
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Subledger AccountingCentralized Rules, Common Repository: Global Control
Payables InvoicePayables InvoicePayables Invoice
French RulesFrench RulesPlan ComptablePlan ComptableFrench CalendarFrench Calendar
EUREUR
LedgerLedger
SubledgerAccountingSubledgerSubledgerAccountingAccounting
DrDr CrCr
• Faster, EasierReconciliation
• Corporate Rules =AccountingStandardization
• Local Rules =Improved LocalCompliance
• Automate “Apples toApples” Adjustments
• Improved Audit-ability
• Improved InternalControl
Some Benefits
• Accounting Rules
• SarBox & 8th Dir.
• User Editable
• Subledger Daybooks(Journals)
• Subledger Balancing
• Reports, inquiries, openitems, et cetera
• MultipleRepresentations
• Common Posting to GLLedgers
• Real time or Periodic
What it is
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Subledger AccountingProduct Uptake and Upgrade Impact
• Two styles of SLA uptake:1. Complete SLA setup seeded, migrated from 11i
• AX
• Payables
• Costing
• Loans
2. Hybrid SLA setup
• Receivables – AutoAccounting + SLA
• Assets – Workflow Account Generator + SLA
• Projects – AutoAccounting + SLA
• Procurement – Workflow Account Generator + SLA
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Subledger AccountingHow does SLA determine what accounting toperform for a transaction?
SLA looks at the link between the transaction's OUand the ledgers linked in the GL Accounting Setupflow. Each ledger has accounting method specified.
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Subledger AccountingTransition Options
• You get:• Visibility and access to balanced subledger accounting
entries• Centralized repository defining Accounting Rules
• Multiple Accounting Representations
• Control Accounts
• Reporting Currencies
• You can: Identify opportunities• Obsolete complex customizations
• Use the power of SLA sources to minimize manual overridesand plug gaps
• E.g. Use customer category to drive accounting
• E.g. Use supplier type to drive accounting
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Upgrade ImpactDeciding to Upgrade
• Your 11i implementation will work in R12
• Pick and choose the features you want to implement• Over 300 to choose from!
• “Architectural” features too:
• eBTax for location-based taxes
• eBTax for VAT recovery
• Build a unique account w/SLA
• Define Ledger Sets for processing efficiency
• Allow access to multiple OUs with Multi-Org Access
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Create and maintain tax rules centrally Generate multiple accounting representations
concurrently
Standardize financial processes Create and maintain accounting policies centrally Centralize financial systems Implement shared services Move to self-service reporting
Integrate performance management across thebusiness
Harmonize financial and management reporting Synchronize financial and operational data Analyze profitability across all dimensions
Manage multiple compliance frameworks with oneplatform
Integrate financial accounts and controls Monitor compliance, risk and performance
indicators together
Globalization“How do I manage complexity ofcomplying with internationalregulations, tax codes, and financialreporting standards?”
Complexity and Costs“How can I spend less money and timeon transaction processing whilesupporting business growth?”
Regulations and Oversight“How do I get a return on the expenseof managing increasing regulatory andoversight demands and risk?”
Profitable Growth“How do I partner with the business tomake the right investments in products,people, projects, and processes todrive growth?”
Challenge Best Practice
Path to Finance Transformation
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• Do you want to…• Secure your bank and payment instrument data?
• Get reports you need faster?
• Get tax calculated and reported correctly?
• Retire your accounting customizations?
• Automate tax decisions?
• Have fewer payment runs?
• Reconcile tax to accounting to transactions more easily?
• Track changes to your processes?
• Integrate with third party applications?
• Have happier end users?
So, Why Should you Upgrade to Release 12?
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