Emerging solutions demystifying_r12_financials-5-28_webcast


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  • As this cartoon portrays, upgrades have been around for a long time. All of us working with software applications are continually advised to take advantage of the latest and greatest version of whatever programs we have.
    In some cases, for example, MS Word, the pain may not be great, but with a major ERP system such as Oracle EBS, an upgrade isn’t always an easy choice.
    What we want to do this morning is walk you all through some of those kinds of considerations for Oracle’s most recent version of R12.
  • Our agenda will be to give some background on what’s new in R12, focused on Financials, and what it might mean for your organization. Some of you may have already seen some of Oracle’s description of what it offers, but since many of you may not have seen a lot as yet, I’d like to set some context.
    Then we’ll talk about what good and bad about these changes. Having lived through the past year with R12, I can say that, in general, I like it, but there are some cautions I’ll discuss.
    After that we’ll summarize some of the considerations you should think about if you’re contemplating an upgrade.
    At the end, we’ll have a chance for some Q&A. If you have questions during the webinar, just use the Q&A menu option on your meeting screen to submit your questions, and then we’ll try to respond to them in the order received.
  • As you may have seen, when Oracle released R12 early last year, it touted it as the “Halfway to Fusion” version. Fusion apps, which are supposed to begin rolling out in the next year or two are Oracle’s exercise in merging the best of EBS, PeopleSoft and JDE to evolve into a single ERP vision for the future.
    At the same time, the EBS suite has been criticized for not supporting very well companies that have been evolving their global, cross-organizational operations. R12 incorporates a number of structural changes that move EBS forward in supporting globalization, particularly in the Financials area, since Financials underly all of the modules, We’ll walk through an overview of the most important of these changes.
    Finally, R12 also brings an improved web-based user interface, (which looks suspiciously more like PeopleSoft than earlier Oracle forms-based screens). This interface is used for all of the new wizard-type functionality in R12, however, most of the areas that haven’t changed much remain in forms-based mode, with not much more than a change in color scheme.
  • What Oracle has done in R12 is to “tease out” the functionality in individual modules that support some pervasive foundational concepts and consolidate them into “layers” of centralized functionality, so that definitions, rules and processes can be configured in one place on a globally consistent basis.
    Ledgers are comparable to Sets of Books in earlier versions, but now all
  • What has changed between Release 11i and this new feature?
    In Release 11i
    One approach, found in much of Oracle’s documentation, suggested modeling Legal Entity as one or more balancing segment values in the Set of Books, as the Set of Books itself, or as an Operating Unit – dependant on each customer’s needs. Global enterprises operating in countries with strong sequencing, reporting, and auditing requirements, were advised to create a Set of Books for each Legal Entity – an assumption around which all of our localizations were built.
    Another approach, centered on Oracle HRMS, allowed users to assign to an organization a Legal Entity classification (GRE/Legal Entity), and attach various attribute level information.
    Oracle Manufacturing had a ‘legal’ cost group concept, where a cost group was made up of various Inventory Organizations representing a Legal Entity. (The cost group was then linked to a “dummy” Set of Books, utilizing its calendar and periods to set the periodicity of the average cost that is calculated for that legal entity.)
    These approaches felt short of providing the full functionality of Legal Entity as required by many global enterprises. Such ambiguity behind the concept of Legal Entity in Oracle Applications has left the concept open to misuse and misinterpretation, Therefore, this new feature provides a secure setup to define a Legal Entity together with Establishments and Registrations in one place such that this Legal Entity definition can then be used across the E-Business Suite for reporting and other legal compliance tasks handled by the application.
  • This feature supports various modules in the E-Business Suite via Maintenance APIs that allow users to create and update a Legal Entity, as well as stamp the Legal Entity which owns the transaction on transaction headers.
    Legal Entities exist as TCA parties classified as Legal Entities with legal information stored in the Legal Entity Data Model. The subsidiaries of the Legal Entities are defined as Establishments. The Establishments are also defined as parties with legal information stored in the Legal Entity Data Model. Intercompany Parties are also associated to a Legal Entities using TCA Relationships. The Intercompany system uses the Transacting Entity Flag to know if the initiator and the recipient of a transaction operate on the same Oracle instance.
    Legal Entity enhances the ability to manage one’s legal corporate structure and track data from the legal perspective. The solution provides the foundation for features that help daily operations comply with local regulations. For example, strengthening the recognition of legal ownership enables accurate intercompany documentation as well as sophisticated tax calculations specific to local jurisdictions. The legal functions set for each legal entity provide basic process controls that facilitate internal control management. Tracking one’s data from the legal perspective enables detailed reporting at legal entity, establishment, and registration level.
  • In 11i the accounting and transaction models were closely related. Each application had its own way of setting up the accounting rules necessary for creating the journal entries. Each subledger had its own set of programs that is used to transfer the accounting entries to GL.
    With the introduction of Oracle Subledger Accounting in Release 12, the infrastructure has been put in place to:
    Separate the accounting model from the transaction model.
    Uniformly define and derive the accounting through out the company.
    As Oracle Subledger Accounting has partitioned the accounting rules and journal entries by application we see separate boxes for each of these applications.
  • Hierarchy of AMB, how components fit together.
    The transaction objects and the sources carry transaction information into the rules defined for each component of an entry.
    These components ie. journal line type, account derivation rule, journal entry descriptions, are attached together as a journal line definition for a particular event. For example, you will set up a JLD for an invoice validation event, another one for a payment creation, another one for payment clearing. The set of such rules for a particular subledger application is called the application accounting definition. And the set of AADs for multiple applications is called the subledger accounting method.
    Remember that it is possible to maintain multiple accounting methods. You can set up as many components as you like, and use them for different accounting methods. You can set up an accounting method that creates entries in compliance with US GAAP, and another one with IFRS. Because the JE components are modular, these two methods could share components, such as entry descriptions.
    The accounting methods would then be assigned to each ledger, which would determine what rules are applied when accounting is being generated for a particular ledger. If you have a setup with a primary and a secondary ledger, you could have different accounting methods attached to and used for each.
  • Tax Jurisdiction is a geographic area where a tax is levied by a specific tax authority.
    Some examples of Tax Jurisdictions:
    TaxGeographic ZoneJurisdiction
    ICMSSão PauloSao Paulo ICMS
    IPIBrazilBrazil IPI
    State Sales TaxCalifornia (State)California State Sales Tax
    County Sales taxSan Francisco (County) SFO County Sales Tax
    GSTCanadaCanada GST
    PSTOntario Ontario PST
    Excise TaxIndiaIndia Excise Tax
    GSTSingaporeSingapore GST
  • This is a sample report created by the offline accounting program. It shows any errors encountered during the process, and suggests the ways to correct the errors.
    Accounting report and other standard reports provided, such as journal entries report, account analysis report, and third party balances report all utilize the XML technology and allow you to change the layout of the reports, change the default sorting and grouping, customize further by adding company logos etc.
  • Emerging solutions demystifying_r12_financials-5-28_webcast

    1. 1. Welcome Today’s presentation will begin soon… For audio, call: Toll-free: (888) 433-2826 Participant code: 8473401119
    2. 2. 2 Introduction to Emerging Solutions • Professional Services firm, Founded in 1997 • We provide: – Strategy / Guidance / Software Selections – Implementation, Upgrades & Integration Services • Oracle Certified Advantage Partner Microsoft Gold Partner • Oracle Specialties: – Oracle E-Business Suite – Oracle Transportation Management – Demantra – Hyperion Planning, HFM and Strategic Finance – PeopleSoft Enterprise Applications , HCM & FSM • Offices: Chicago, Minneapolis (National delivery capabilities)
    3. 3. 3 Introduction Octavio Perales Oracle National Practice Director, Emerging Solutions Stan Korwin Chicago Oracle Practice Lead, Emerging Solutions
    4. 4. Demystifying Oracle R12 Financials Presented by Stan Korwin May 29, 2008
    5. 5. Agenda • What is different about R12 Financials? • What is good and not so good about the changes? • What do I need to worry about for upgrade? • Q & A
    6. 6. What is Different about R12 Financials? • “Halfway to Fusion” • Foundational restructuring to support globalization • Improved Interface
    7. 7. R12 Financials Structures R12’s globalization approach has restructured six key foundational dimensions of EBS financials by consolidating functionality into separate layers. These layers now underlie all of the applications. •Ledgers/Ledger Sets •Multiorg/MOAC/Legal Entity •Subledger Accounting •E-Business Tax Engine •Intercompany •Cash/Banking Management
    8. 8. Global Financial Management Shared services and single database operations with streamlined processing, reporting, and access across operating units Single Global Database Shared Service Center Org 3Org 2Org 1 Examples: Payables, Purchasing, Collections, HR Shared Services with R12 Financial Management Initiatives Think Work Manage
    9. 9. Global Financial Architecture BankBank ModeMode ll TaxTax EngineEngine InterInter CompanyCompany General LedgerGeneral LedgerLedger & LedgerLedger & Ledger SetsSets General LedgerGeneral LedgerLedger & LedgerLedger & Ledger SetsSets Subledger Accounting (SLA)Subledger Accounting (SLA) DrDr CrCr ProjectsReceivable s Inventor y Work in Process Purchasing Payable s Multi-Multi- OrgOrg AccessAccess ControlControl 6 Major Initiatives 1. Ledger and Ledger Sets 2. Multi-Org Access Control 3. Subledger Accounting 4. Tax Engine 5. Intercompany 6. Bank Model
    10. 10. MOAC In Action Setup – Define Security Profile Select OU Classification Setup – Define Security Profile Select OU Classification Reporting Across OUs Reporting Across OUs Selecting one or all OUs in an AP action Selecting one or all OUs in an AP action
    11. 11. Legal Entity Setup Description Support for Registrations Single Legal Entity Data Model Support for Establishments Legal Entity IN 11i Legal Entity IN R12.0 HR Organization - GRE/LE (General Reporting Entity/Legal Entity) HR Organization – Operating Unit (OU) HR Organization – Inventory Org (IO) SOB (Set of Books, Ledger in 11i11) BSVs (Balancing Segment Values) Customer account sites and site uses Reporting Entities
    12. 12. Legal Entity Setup Dependencies and Interactions Legal Entity GL DataModelApplications TCA Intercompany E-Business Tax Legal Reporting to enable… APARIBY APIs and UIs CE Legal Entity provides a foundation
    13. 13. Legal Entity Configurator
    14. 14. Oracle Subledger Accounting Integration Release 11i Accounting model and transaction model are tightly integrated Release 12.0 Accounting model is separated from the transaction model Subledger Products Projects Payables Receivables General Ledger Subledger Products Projects Payables Receivables Subledger Accounting AR Rules & journal entries PA Rules & journal entries AP Rules & journal entries General Ledger
    15. 15. Introduction to Subledger Accounting Accounting Methods Builder FR Statutory Ledger Standard IAS Subledger Accounting Method Payables Application Accounting Definition Journal Line Types Account Derivation Rules Journal Entry Descriptions Payment Journal Line Definition Transaction Objects Sources
    16. 16. SLA Introduction to Subledger Accounting Dependencies and Interactions Transactions Accounting Events Subledger Application Accounting Configurations Journal Entry Setup Accounting Program Subledger Balances Subledger Journal Entries GL Journal Entries and Balances General Ledger
    17. 17. Tax Transactions Taxes, Rules Oracle E-Business Tax Processing taxes for transactions and reporting Determine Regimes Taxable Basis Calculate Tax Amount Tax Status & Rate Applicable Taxes Single Interface for TransactionsSingle Interface for Transactions Transparent Integration with Tax Partner ServicesTransparent Integration with Tax Partner Services Parties Places Products Processes Payables Receivables Purchasing Transactions Sales Orders … Tax Reports - PDF, HTML, RTF - Security enabled  Extensible  Service Oriented Architecture  Compliance, Assurance  Efficiency, Global Visibility
    18. 18. Tax Authority Tax Regime Tax California State Board of Equalization California Sales Tax State Sales Tax California (State) HM Customs and Excise (U.K.) UK VAT UK VAT UK Canadian Customs and Revenue Agency (Canada) Canadian Goods and Services Tax GST Ontario Federal (Brazil) Secretaria da Receita RICMS - Regulamento do ICMS CMS São Paulo Oracle E-Business Tax Key Concepts Tax Jurisdiction
    19. 19. Web UIWeb UI OpenOpen Interfaces /Interfaces / APIAPI ExcelExcel (Web ADI)(Web ADI) Advanced Global Intercompany System SubledgerSubledger Invoices &Invoices & DocumentsDocuments  Generate subledger invoicesGenerate subledger invoices  Control transaction entry withControl transaction entry with Intercompany CalendarIntercompany Calendar  Fully Configurable Approval RulesFully Configurable Approval Rules  Flexible Security ModelFlexible Security Model  Centrally defined IntercompanyCentrally defined Intercompany AccountsAccounts OnlineOnline ReconciliationReconciliation ReportingReporting XMLXML PublisherPublisher ReportsReports Advanced Global Intercompany System SubledgerSubledger AccountingAccounting DrDr CrCr GeneralGeneral LedgerLedger ReceivableReceivable ss PayablePayable ss
    20. 20. • Bank account is now associated with LE entity rather than Operating Unit • Single bank account serves multiple Operating Units • Any and all Operating Units associated with a ledger can be permitted to use the bank accountAssets Project s Receivabl es PayablesPurchasin g Project s Receivabl es Payables InventoryInventory Plu sCentralized Credit Card Model Credit Card Encryption Supplier & Customer Banks in TCA Centralized Banking Shared Services Disbursements Work inWork in ProcessProcess LE OU A OU B OU C
    21. 21. A New User Experience for R12 • Reduced pop-ups and duplicate screens • Re-designed and streamlined entire workflows • Reduced the number of steps to complete key tasks • Improved overall look & feel and visual style • Increased personalization capabilities • Campaign Management • Customer Support • Collections & Payments • Loan Management Improved Workflow in Targeted Areas • Financial Consolidation • Online Candidate Registration • Absence Management • Salary Administration • Self-Service Purchasing • Sourcing • Supplier Collaboration • Business Intelligence Think Work Manage
    22. 22. One dashboard (R12) vs. multiple steps across many forms (11i) Assign/view legal entitiesAssign/view legal entities Define ledger (set of books)Define ledger (set of books) Define operating unitsDefine operating units Define legal entities dashboardDefine legal entities dashboard Accounting Setup Manager
    23. 23. Accounting Setup Manager
    24. 24. Accounting Setup Manager-Organization
    25. 25. Tax Managers
    26. 26. New Look for Standard Reports
    27. 27. Daily Results,Daily Results, Flexible PeriodsFlexible Periods Flexible ComparisonsFlexible Comparisons MultipleMultiple CurrenciesCurrencies Graphs /Graphs / TrendsTrends PerformancePerformance Measures (KPIs)Measures (KPIs) Real-Time Operational Reporting Reports w/Reports w/ DrilldownDrilldown • Out-of-the-box mgmt reporting system • Role-based dashboards • Seamless drilldowns • New in R12: - 6 dashboards, 49 KPIs, 90 rpts - A focus on global sourcing, spend, and supplier mgmt Drag & DropDrag & Drop PortletsPortlets Think Work Manage
    28. 28. Diagnostics Tools
    29. 29. Diagnostic Tools-cont’d
    30. 30. What is good and bad about the changes? GOOD • “Globalized” features more flexible • Navigation more intuitive • New wizards are extremely helpful for setup • Enhanced diagnostics are more useful
    31. 31. What is good and not so good about the changes? GOOD • New structures allow much greater flexibility for organizations with complex organizational structures • Better ability to accommodate organizational changes • New interface does navigate more easily
    32. 32. What is good and not so good about the changes? NOT SO GOOD • System documentation still in “catch up” mode • Bugs – though improving • Dual navigation methods annoying and sometimes confusing
    33. 33. What Do I Need To Worry About For Upgrade? • Think carefully about foundations – Organization structure – Tax jurisdictions – Legal Entities – Security, roles and responsibilities • Be prepared to relearn some concepts • Confirm hardware capacity
    34. 34. 35 Next Steps  Contact Emerging Solutions for a complimentary R12 Upgrade Workshop  Utilizes proven analytical tools and our extensive industry expertise to identify quantifiable improvements in your transportation operations and to your bottom line. www.emergenow.com/R12-Workshop
    35. 35. Question and Answers
    36. 36. 37 Additional Questions? Contact Stan Korwin skorwin@emergenow.com www.emergenow.com