Breaking through the Multi-Org barrier with EBS R12 & Fusion Concepts

Transcription

1 Breaking through the Multi-Org barrier with EBS R12 & Fusion Concepts Session ID#: Many Legal Entities - Single Operating Unit in EBS R 12, a breakthrough in Multi-Org design Prepared by: Hans Kolbe Managing Partner, Celantra Systems REMINDER Check in on the COLLABORATE mobile app

2 Hans Kolbe Hans Kolbe has managed and advised global software implementation projects for over 15 years. His extensive knowledge on Oracle applications is combined with a formal background as a German attorney, trained in international and comparative law. Chair of Multi-National SIG Group Specialist in Intercompany and multi-org configurations, international compliance and transaction tax hanskolbe@celantrasystems.com Visit the Celantra Booth 1230 at Collaborate

3 San Francisco, CA , Global Implementations and Process Alignment: Plan, Design, and Execute Celantra Systems provides innovative solutions to today s most vexing issues in multi-national ERP configurations. Celantra specializes in helping large organizations tackle the challenges of operational efficiency and process synchronization while improving and automating financial, legal, and trade compliance. Celantra has a proven track record of success in simplifying multi-national implementations, reducing implementation timeframes, and satisfying challenging local incountry requirements. We address and specialize in - Legal and Operational Structure design to support operational efficiency and reporting compliance - Languages and International Document Formats - Global Chart of Accounts and Financial Reporting - Tax, Statutory, Trade and Customs compliance - Intercompany automation and reconciliation - Transfer price elimination (Profit in Inventory) - Integration with Boundary Systems - Instance Strategy and Design - IFRS and Multi-GAAP Accounting We offer project planning, system design, program management, and supplementary staffing assistance. Celantra Systems Customers

4 Celantra Approach: Guidelines for Global Implementation Support Single Global Structure regardless of country, currency, language, accounting and tax regime Variations to be transparent to operator and business user community Flexible for future business growth, acquisitions, and changes in business or legal model Easy to support and upgrade The Implementation Model aligns to company objectives and culture

5 Standard ( Silo ) ERP Multi-Org Model All Subsidiaries are Parallel Entities

6 Shared Operating Unit Model General Concept

7 Benefits of Shared OU Model Support Top Down business and management structure Simplify ongoing maintenance (no duplication and continual synchronization of setups) Simplify implementation process, roll-out, CRPs, testing. Operating unit parameter need to be setup only once in all operational modules. GL setup is not simplified - local GL books required. Simplify shared service centers (customer service, procurement, finance) - no changing responsibilities Simplify and speed up monthly closing

8 Silo Model 1 Ledger-1 Legal Entity-1 Operating Unit 1-1-1

9 Cross Legal Entity Operating Unit (Cleo) 1 Ledger-N Legal Entities-1 Operating Units 1-N-1

10 Potential Multi-Org Options Examples

11 Scope Qualcomm standard international functionality Provides financial control standardization Normalizes financial results and enhances visivility Secondary statutory ledger Provided, when necessary Country-specific Local GAAP Ledger General Ledger Fixed Assets Local Currency US GAAP Ledger General Ledger Extensity Travel Markview AP Imaging BottomLine (or Custom) Electronic Pmts Fixed Assets Operating Unit Accounts Payable Purchasing iprocurement Project Accounting Payroll Qtime Labor Tracking MySource HR Data

12 New OU Model - Business Objectives Reduce the time (from months to days) that it takes to add a new legal entity (LE) into Oracle This could be for either an acquisition or an existing LE that is not yet on Oracle Ensure that any changes to business operations resulting from this new approach do not negatively impact: Qualcomm accounting operations ERP support by FSG & IT Month-end close processes are not negatively impacted Design this new solution around a typical international implementation scope GL, FA, PO, AP and Projects Assumption is that orgs requiring either manufacturing, component inventory or order management must have separate LE

13 What are the critical requirements for an LE Document sequencing General Ledger journal sequencing Separate issue from multi-le OU Sub-ledger transaction sequencing Accurate automated accounting Default accounting strings, normally provided at OU level Transaction Tax compliance (VAT) & Reporting VAT calculation and reporting Legal entity customer facing forms Purchase Orders, Invoices

14 Multi-LE OU Pros & Cons Pros Document sequencing General Ledger journal sequencing Separate issue from multi-le OU Sub-ledger transaction sequencing Accurate automated accounting Default accounting strings, normally provided at OU level Transaction Tax compliance (VAT) & Reporting VAT calculation and reporting Legal entity customer facing forms Purchase Orders, Invoices Cons Impact on business operations resulting from configuration differences is not known Impact on support functions (IT & FSG) not known Will require further testing to determine impact Not intended to support manufacturing-related activities If a legal entity grows too large, it could entail configuring a separate OU at a later date

15 Current State One Legal Entity (Multiple BSVs) One Ledger Multiple OUs (owns multiple Inventory Orgs) Common Asset book (Corporate and Tax Books) Proposed State One Legal Entity per BSV requiring sub-ledger support (more than One Legal entity) One Ledger Common OU (Own all US Inv orgs) Common Asset book (Corporate and Tax Books) Project Goals Consolidate US OUs to one OU and design scalable Source to Pay business process for operational efficiency gains Define Legal Entities using standard functionality and assign BSVs (company codes) Reduce PO cancellations significantly Improvise US Payments accuracy and turn around time Accounting accuracy Reduce Period close overhead (multi OU to single US OU) OU Consolidation Impact Eliminates need for supplier setup in multiple operating units Eliminates need to run key processes like invoice validation, create accounting, transfer to GL in multiple OUs Improvise PO change process and eliminates need for PO cancellation Allows transfers between inventory orgs within US OU for all US data centers Speeds up close process (avoids review and sweeping of unaccounted transactions in multiple US OUs) Improves IT's velocity / ability to roll out new entities from current time line of 4-6 weeks to few days to one week Simplify Invoice to Pay process leading to productivity gains overall Outsourcing effort Supplier site cleanup including obsoleting redundant sites and merge duplicates

16 OU Consolidation Impact Eliminates need for supplier setup in multiple operating units Eliminates need to run key processes like invoice validation, create accounting, transfer to GL in multiple OUs Improvise PO change process and eliminates need for PO cancellation Allows transfers between inventory orgs within US OU for all US data centers Speeds up close process (avoids review and sweeping of unaccounted transactions in multiple US OUs) Improves IT's velocity / ability to roll out new entities from current time line of 4-6 weeks to few days to one week Simplify Invoice to Pay process leading to productivity gains overall Outsourcing effort Supplier site cleanup including obsoleting redundant sites and merge duplicates Key Challenges Delinking of BSV from existing Legal Entity and assigning it to new Legal Entities Ensuring seamless transition to users for accounting impact Non PO Invoices processing and accounting (Expense Accruals) Payment processing transition - transition towards standard functionality of using bank account owning legal entity to achieve segregation of payments Sub-ledger reporting as existing OUs are consolidated in common OU. Correlating POs / Invoices / Payments to BSVs in post OU consolidation requires reporting changes EB Tax / Vertex changes to support Common OU

17 The Celantra Solution for R12 customers-cross-legal-entity- Operating unit CLEO

18 Opportunities through CLEO Design Simplified Design Single Ledger, Single OU Align Operating Unit with operating structure Reduce Month-End Activities and Reconciliations Dramatically reduce time to integrate acquisitions and roll-out new modules and functionality Ensure global processes by reducing number of configurations and synchronizations challenges Improve global data quality - reduce duplication

19 CLEO 1 Ledger-N Legal Entities-1 Operating Units 1-N-1

20 Questions to the CLEO proposal Does this design fit my operating structure? Shared and local service services Security, defaults, and validations How can I connect each transaction to a single LE? Payments, Invoices Reconciliation How can I fullfill my local statutory and tax reporting requirement? Sequencing, tax, accounting Local COA and GAAP rules What about Intercompany Transactions? How does this impact corporate consolidations? How do you deal with multiple functional currencies?

21 Looking at Key R12 functionality used for CLEO Using the R12 LE functionality In conjunction with accounting setup to support your corporate and local reporting to support your GL ledger sequencing (gapless where needed) In conjunction with EB-Tax to fulfill the regional transaction tax (VAT etc.) requirements In conjunction with subledger document sequencing to fulfill country specific transaction sequencing requirements To default Payables and Receivables transaction ownership To identify intercompany transactions and implications To support your payments and receipts with correct legal ownership assignment

22 Answers from the CLEO solution Does this design fit my operating structure? Align Multi-Org to Op. Unit / multiple Options Transaction Ownership? LE column in Finance Modules Nominate Data Element in all others (Company Segment) Local statutory and tax reporting? Stat Reporting + GL sequencing in secondary ledger VAT through EBus Tax and Trx Sequencing thru sub-ledger configuration What about intercompany Transactions? Identify source, LE owner and LE partner How does this impact corporate consolidations? Generally no impact. Secondary ledger available, if needed. Multiple functional currencies? Reporting ledger can be used.

23 Please contact for more information about CLEO 23

24 Please complete the session evaluation We appreciate your feedback and insight You may complete the session evaluation either on paper or online via the mobile app