Getting to One: Consolidating Multiple Charts of Accounts during an Oracle E-Business Suite Upgrade to R12

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1 Getting to One: Consolidating Multiple Charts of Accounts during an Oracle E-Business Suite Upgrade to R12 Tuesday, April 20, :30 AM - 11:30 AM Breakers K Bob Von Der Ahe Paul Phillips Helene Abrams Director, Global Projects Experian Global Corporate Systems Manager Oracle EBS Development CARQUEST Technologies, LLC Founder and CEO eprentise, LLC

2 Session Objectives Explore the real reasons companies decide that they need a single global environment. Understand the benefits and ROI of a single instance and single Chart of Accounts. Understand the process, design considerations, and impact of changing to a global environment. Hear stories about the challenges of getting to one instance and a single chart of accounts. Leverage new features in Oracle E-Business Suite R12 that enable and enhance global business. 2

3 Oracle E-Business Suite Customer Trends Consolidate for operating a shared service center or a centralized data center. Resolve duplicates and standardize data. Merge all configuration, master, and transaction data. Reorganize entities, sets of books, and operating units. Reduce operating and maintenance costs. Create a single source of truth. Enable revenue optimization. 3

4 Experian (LON:EXPN) Global information services company. Provides data, analytical tools, and marketing services to organizations and consumers to help manage the risk and reward of commercial and financial decisions. Known for its comprehensive understanding of individuals, markets, and economies. Helps organizations find, develop, and manage customer relationships to make their businesses more profitable. Promotes greater financial health and opportunity among consumers by enabling them to understand, manage, and protect their personal information. Constituent of the United Kingdom's FTSE 100 index Revenue $3,821 USD (millions). Clients in more than 65 countries. 15,000 employees in 40 countries. Oracle 12.0 All Financials, All HR Modules 4

5 CARQUEST CARQUEST Auto Parts is the premier supplier of replacement products, accessories, supplies and equipment for virtually all makes of automobiles, as well as light and heavy-duty trucks, off-road equipment, buses, recreational vehicles and agricultural equipment. Automotive aftermarket is worth more than $250 billion and growing annually CARQUEST Auto Parts Stores are local, independently owned and operated businesses with deep roots in their communities 16,000 teammates Private Company with 3,000 locations in North America and 43 years in business CARQUEST Canada extends our network throughout Canada Oracle 11i - GL, AP, AR, FA, PO, HR, Payroll 5

6 Why Change a Chart of Accounts? Moving to a single global chart of accounts or a single global instance to operate a shared service center or reduce operational costs Acquiring another company Running out of segment values Changing the reporting requirements Re-ranging values to allow sequences in formulas, reports Tracking the business differently Recording intercompany transactions 6

7 Experian Business Drivers April Business case for Gemstone. Reduce IT cost structures: Quantifiable natural savings 3 instances: hardware, software, support teams Impediment to deployment of standard business processes and new functionality Shared service centers Enable labor arbitrage Establish a singular, centralized team to decide on assignment of ledgers, new account values, logic for building cross-validation rules Enable revenue optimization: Hard to quantify, wide range Customers are global Many customers span regions Global brand Global standard service products Global standard data and business intelligence optimization 7

8 Experian Gemstone Deliverables & Principles Deliver a global Oracle instance, enhanced reporting capabilities and global shared services Establish a single global accounting and HR system with a single chart of accounts Agree global processes for Finance and HR Establish Global Finance Shared Services organisation; Implement integrated reporting, planning and forecasting for Finance and HR; Rationalise legal entities; and Optimise tax efficient structures. Improve access to financial information and decision making support Standardize processes, controls and SLA s globally 8

9 CARQUEST Drivers and Design Considerations Provide flexibility to facilitate growth and support global instance Utilize standard Oracle functionality for reporting by aligning balancing segment and cost center segment with functional purpose Facilitate custom report development with straightforward flexfield design by using each segment for only one purpose Eliminate unused and obsolete segments Eliminate alpha data types 9

10 Key Dimensions of a Global Chart of Accounts History Why were there multiple charts of accounts in the first place? Obstacle to waving a magic wand and changing to single COA? Eliminate need for downstream Hyperion or other financial reporting tool? R12 considerations? 10

11 Considerations for Defining a Global Chart of Accounts Understand your Business Reporting Needs Operational Statutory and regulatory requirements Management reporting External financial reporting Profitability by customer and by product Team members in design process should be functionally aligned as opposed to geographically aligned Design flexibility for future changes Leave room between values to insert new values and ranges of values Each segment should have one single logical and clearly-defined purpose 11

12 Design Issues and Resolution What issues did you encounter? How did you decide and bargain within the organization? What compromises did you have to make, and why? Who participated in the design? Any outside consultants or accounting firms? 12

13 Flexfield Components In Oracle E-Business Suite, Chart of Accounts = Accounting Flexfield Example Structure Segments, Values, Code Combinations Company Business Unit Cost Center Region Account East West 2222 Segments Values East.1111 Code Combination 13

14 Flexfields in the Form Flexfields customize Oracle E-Business Suite to track the financials the way you want. Code Combinations Accounting Key Flexfield Value Descriptions 14

15 Experian Before and After COAs Convergence, 2010 January 2010 June Unify COA v.1 Company Cost Centre Account Sub-Account Project Intercompany Unify COA v.2 Company Country Business Unit Cost Centre Account Sub-Account Sub-Analysis Intercompany Unify COA v.3 Company Country Business Unit Cost Centre Account Sub-Account Sub-Analysis Intercompany 15

16 CARQUEST Before and After COAs COA v.1 Location (6) Cost Center (5) Natural Account (6) Sub Account (6) Project (5) Future 1 (5) Future 2 (5) COA v.2 Location (6) Department (5) Natural Account (10) Sub Account (6) Project (6) Future 1 (6) Future 2 (6) 16

17 COA Consolidation Process Who did what when? How were the global COA values finalized? What were the lessons learned? What advice do you have for others going through the COA change process? What needed to be done with or for business users in transition to a single COA? What design considerations do you have for others going to a single COA? 17

18 Experian - Diamond Road Map Unify 11i Spain and Hong Kong COA v.1 Europe COA v.2 History Europe Spain Hong Kong UK 11i UK COA History UK US 11i US COA History US January, 2009 January 2009 R12 Upgrade Unify R12 Spain and Hong Kong COA v.1 Europe COA v.2 September 2009 FlexField HK & Spain COA v.2 Custom Extract & Transform Scripts I Global COA v.3 Custom Extract & Transform Scripts II Unify R12 Europe, Spain and Hong Kong COA v.2 January 2010 UK Open US Open Convergence Unify R12 Europe, Spain and Hong Kong COA v.2 US and UK Global COA v.3 June 2010 FlexField Europe UK 11i UK COA US 11i US COA June, 2010 Unify R12 All Countries and Regions Global COA v.3 History Europe Spain Hong Kong UK US History UK History US 18

19 Parts of COA Change Project Not Done by FlexField Objects where references to Accounts are Hard-Coded Interfaces Data Warehouse Reports Any objects that use Ranges of Accounts Approval Assignments Budget Assignments Rules that drive business logic based on Accounts Cross Validation Consolidation Account Derivation Rules Accounting Generator Roll-up Groups Security Groups Summary Templates Mass Allocations Costing and Revenue Recognition Rules

20 R12 Preparation Drill down detail Statutory and regulatory reporting requirements IFRS Global visibility with local compliance Subledger accounting with simultaneous accounting for all entities 20

21 R12- Global Financial Management Operations in US, UK, France XML Publisher Reporting Audit, Reconciliation & Drilldown Analytics Transaction Entry Simultaneous Accounting for All Entities While Ensuring Corporate Visibility & Local Compliance US GAAP Global COA US Calendar $ US GAAP Global COA US Calendar US GAAP Global COA US Calendar French IAS Global COA French Calendar Global Visibility, Auditability, and Control Accounting & Tax 21

22 You Define the Rules Define Legal Entities & Associated Rules Ensure Complete & Accurate Setup via Online Checklist Define Multiple Ledgers for Rules and Currencies Set Accounting Rules for All EBS Apps 22

23 Lessons Learned Understand the overall business reasons and metrics for making the changes. Keep focus and momentum. Single COA Usually not difficult to design May take time to decide on account values Global organizations need a strong central group to control creation of account values and descriptions Steps to Single COA Enlist sponsor and organizational cooperation Plan well when there are multiple instances and COAs Run the conversion Users were able to find misclassified accounts easier 23

24 Results Both CARQUEST and Experian projects went to successful completion precisely because they had top executives outside IT who were engaged and had a stake in seeing the projects through. Even though only on v2 of their COA, Experian has achieved an estimated $2m in savings due to reductions in audit fees and finance costs as well a procurement savings. Less maintenance for third-party systems Common reporting (development and maintenance cost reductions) Common security, cross-validation rules Common hierarchies (reduced maintenance, fewer people to design) Common, shorter close cycle More visibility across organization Common training for the entire organization 24

25 Questions?

26 Thank You! Bob Von Der Ahe Experian Global Corporate Systems Paul Phillips CARQUEST Technologies, LLC Helene Abrams eprentise, LLC