1. finance
2. accounting and auditing

The Tale of Two Cities: A Global
Implementation of Oracle 12.2.3
Session ID#:
Prepared by:
Paul Kirch, FusionCloud Consulting
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Session Session Title
Presenter (s)
Paul Kirch, Principal
Summary:
Paul is a senior program manager with
over 25 years experience managing
programs, with 10+ years delivering
large complex global business
transformation projects. Paul has
worked on and/or delivered 17+ Oracle
full life cycle implementations, and has
extensive international experience
working in Asia, Europe, South America,
the Middle East, and other principal
countries.
In addition to his package and cloudbased implementation experience, Paul
has also led ERP-vendor selection
programs, business process
reengineering/ transformation
programs, business case development ,
and supply chain effectiveness
initiatives. Paul has led programs
utilizing Oracle Financials, Supply Chain,
HR/Payroll and Projects modules in all
releases from Oracle 9.4.2 through
Oracle R.12.2.3 and Fusion Release 9.
Paul lives in San Francisco, California
and is currently working in the San
Francisco area on a global
implementation project.
Experience:
Director, Oracle EBS and Fusion Practice at large India-based Integrator
 Developed proposals and led practice for India-based system integrator. Responsibilities
included creating artifacts for project delivery methodology, creating implementation
methodology for Fusion project and hiring staff into the Fusion Practice. Successful in
selling Fusion projects to 1 regional restaurant chain and to a government national lab.
Client: Major High End Clothing Retailer | Role: Program/ Project Manager
 Led a 12 month Oracle R12 Assessment and Implementation project in which project team
assessed the impact of migrating over 400 custom objects to Oracle R12 (12.1.6). Project scope
included Oracle R12 functional and technical upgrade and reimplementation of Oracle Projects
modules (Project billing, costing, management modules) Project solution included Oracle STT eB
Tax solution, Oracle Procurement, iSupplier, HR/ Payroll and OIC. Project value: $4.2 million.
Client: Major Games Software Development Company| Role: Financials & Tax Lead
 Led a Order to Cash (OTC) project team tasked with implementing Oracle SOA Suite of products as
part of an Oracle R12 (12.1.6) upgrade project. Team reversed engineered a number of major
modifications created during the Oracle 11.5.10 implementation, using Oracle SLA, Ledger/Ledger
Sets, and eB Tax to replace customizations with standard “out of the box” functionality. Project
team size: 25 consultants. Project scope: Worldwide, including Asia Pacific and Europe.
Client: Major Construction Company (Brazil & U.S)| Role: AP Lead and U.S Tax SME
 Led a project team engaged in the United States implementation of Oracle R12 (12.1.4). Project
scope included: Oracle Financials, including Oracle eB Tax (Sales & Use Tax), Supply Chain, HR and
PeopleSoft Payroll. Project team developed a template to allow company to implement a global
sourcing/ procurement company for Brazilian-based construction project teams.
3
Introduction
■ FusionCloudConsulting
■ Inflection Point
■ Offering Overview
■ FusionCloud Consulting
■ Methodology and Deliverables
■ Website
■ LinkedIn Page
■ “A Tale of Two Cities”
FusionCloud Consulting
The Public Cloud
■ Public clouds are owned and operated by third-party service providers.
Customers benefit from economies of scale because infrastructure costs
are spread across all users, thus allowing each individual client to
operate on a low-cost, “pay-as-you-go” model.
■ Public cloud infrastructure is typically larger in scale than an in-house
enterprise cloud, which provides clients with seamless, on-demand
scalability.
■ Customers on public clouds share the same infrastructure pool with
limited configurations, security protections and availability variances, as
these factors are wholly managed and supported by the service provider.
The Private Cloud
■ On-Premise Private Cloud: The on-premise, private cloud is an “internal
cloud” where applications are hosted in the organization’s own data
center. An on-premise private cloud provides standardized processes and
protection, but is limited in size and scalability. The firm continues to
incur the capital and operational costs associated with the physical
infrastructure, but contracts out patch application and day-to-day
management of the data base and applications to a 3rd party services
provider.
■ Externally-Hosted Private Cloud: The externally-hosted private cloud
model is a ERP application managed by an external cloud computing
services provider on infrastructure or equipment physically located
outside of the enterprise walls. The service provider facilitates an
exclusive cloud environment using multi-tenant security features on fully
dedicated or shared servers.
ERP Software is at an Inflection Point
2020?
Widespread adoption of ERP as a
SAS offering on “the cloud”
2011
Emergence of ERP SAS offerings
1999
1995
Widespread adoption
of the internet
Development of ERP
Software
The Market
Forrester Research
Forrester Research
Offering Overview
■ Consulting
■ Management
■ Functional
■ Technical
■ Training
■ On-site
■ On-line
■ Mobile
■ Staff Augmentation
FusionCloud Consulting
■ Oracle R12 “Globalization in a Box” offering:
■ Oracle global implementation consulting, including:
▪ Intercompany transactions for global implementations
▪ Worldwide tax configuration and testing
■ Oracle Fusion Applications offering:
■ Oracle Fusion Cloud or On-premise Applications
▪ Cloud Strategy Consulting (i.e. Which vendor?)
▪ Oracle Fusion Cloud or On-premise Implementation Consulting
■ Workday Applications offering:
■ Workday (Cloud) Applications
▪ Workday to Oracle R12 Integration Consulting (HR/Payroll)
▪ Workday Financials Implementation Consulting
Methodology and Deliverables
Methodology
1
Analyze &
Prepare
Fit/Gap &
Configure
“Imagine”
2
Rapid
prototyping,
data extraction
and load,
process redesign
Questionnaires
and preprepared
workshop
materials
3
Configuration
using “best
practices”
configuration
and templates
Deploy &
Train
Support
4
5
Development of
company specific
training materials and
process documentation
On-shore and off-shore
support and
maintenance
Deliverables
• Questionnaire
• Process Design
• Final Process Flows
• Training Materials
• Support Procedures
• Presentation
• Data Load Scripts
• BR100
• Detailed Process Docs
• Management/ Admin
• Initial Configuration
• Loaded Data
• Test Procedures
• Test Cases
• Test Results
Fusion Applications
■ Human Resources
▪ Identify Management
▪ Human Resources
▪ Payroll
■ Financials
▪
▪
▪
▪
General Ledger
Receivables
Payables
Fixed Assets
■ Intercompany
■ Projects
Fusion Applications Implementation and Project Management
■ Implementation: access to the most experienced Oracle Fusion
Applications talent available
■ Project Management: seasoned management team with individual
experience of 25+ years in Oracle, and 15+ years managing Oracle
projects
Cloud Consulting Strategy
Website
LinkedIn Page
Agenda
A Tale of Two Cities
■ Project Overview
■ Multi-Org Concepts
■ Intercompany
■ Conceptual Understanding
■ Introduction to eB Tax
Project Overview
Project Overview
■ The R12 project envisioned re-implementing Oracle R12, rather than
performing a technical upgrade. The driver behind this decision was that
the Oracle 11i environment was heavily customized and did not take
advantage of Oracle’s features.
■ This said, the R12 project’s stated goals were to:
▪ Globalize
▪ Standardize
▪ Simplify
▪
The “Two Cities” in the presentation title are:
▪ Newark, California
▪ Cork, Ireland
Project Organization and Scope
■
■
■
■
■
■
Representation from EMEA, China, and the Americas managed by first by IBM and, later, by inhouse Program Management Office (PMO)
Project scope: redesign of the multi-org structure taking full advantage of Oracle R12
functionality and incorporating the use of Secondary Ledgers for IFRS reporting and HFM
upload
Project team engaged in redesign of intercompany processes used to move materials between
the manufacturing organization based in China and the distribution centers based in the major
markets around the world
Project includes migration to a single global banking partner.
▪ Project envisions integration with Oracle Web Center for AP invoice capture and imaging
functionality.
Project is slated for completion in April, 2015 on Oracle 12.2.3. This will be one of the first
projects to go live on the latest release of Oracle.
Project modules in scope included: GL, AGIS, Oracle eB Tax, Oracle Payables, Oracle Purchasing
and iProcurement, iSupplier, Oracle Advanced Supply Chain, Oracle Advanced Planning, Oracle
Order Management, Oracle Receivables, among others
Multi-Org Concepts
Multi-Org Concepts
■
Ledgers and Ledger Sets
■
Company Codes/ Balancing Segment Values (BSVs)
■
Legal Entities
■
Business Group
■
Operating Units
■
Inventory Org
Definition of Terms
■
■
■
■
■
■
In Oracle R12, Oracle introduces the concept of a Legal Entity in Oracle General Ledger.
The Legal Entity or Establishment captures the VAT Registration Number and creates a
legal address
Oracle uses company codes or Balancing Segment Values (BSV’s) to define the level at
which debits=credits in Oracle General Ledger.
At the subledger level, Oracle uses the concept of Operating Units to define separate
business units
The Legal Entity can be used to “lock down” BSV’s. This functionality is extremely
important in Oracle eB Tax in determining the appropriate rates to use on a specific
transaction (place of supply)
Inter-company transactions are defined as transactions between related-company legal
entities; Intra-company transactions are transactions between BSVs that belong to the
same legal entity
Intercompany transactions need to be understood from a transaction processing, tax
compliance, and accounting perspective
EMEA Ledger Set
IFRS EUR
Europe
USD
4517
IFRS EUR
EUROPE EUR
4605
4314
9923
4559
4226
1
2
3
4
1
2
3
4
A
E
B
F
493
5
4326
442
6
7
423 4248 4269 4279 4288
8
FR
IT
4373
429
UK DE ES
4348
4388
482
450
4568
IR Nordic IT2 NOK NL RU PL
458 4849
9997
4898
FI UAE HRV
9999 8880
5
I
G
J
444
TR SA EU OPS
6
K
L
M
N
O
Primary Ledger
C
IFRS
D
Russia
RUB
EUROPE EUR
4957
RO
4920
GR
494
4910
RU
Ukraine
RU
Secondary Ledgers
Legal Entity/BSV’s
OU- Manufacturing
OU- Distribution
OU- Sales
Global Inventory INV
H
HQ Company
Inventory Org
Intercompany Transactions in R12
Intercompany Overview
■
Operating Unit Intercompany Functionality: Oracle’s Operating Unit is designed to hold an
operational entity and its transactions separate from others OU's. In order for Oracle’s
Shipping Networks/ Intercompany Transaction Flows to work correctly, two operating units
must be defined which transact with one another. Oracle uses the two operating units
structure to enable intercompany transactions for OM, INV, PA , AR, and AP transactions.
■
Balancing Segment Intercompany Functionality: The GL Balancing Segment is designed to
maintain an entity’s financial information. With its automatic balancing of I/C journals
Oracle’s GL module provides I/C functionality that is independent of the OU concept,
described above.
■
AGIS Intercompany Functionality: In Oracle R12, Oracle’s AGIS extends the GIS functionality
created in 11i and allows users to create intercompany transactions, including the underlying
I/C AR/AP invoices. The relationship and entries between Initiator and Recipient in AGIS
define which entities can transact and create intercompany AR/AP transactions, and whether
these transactions require approval.
European Intercompany
#1 Internal SO/IR
Ship From (EU
Registration)
#2 Material
Asia
0% VAT –
Manufacturing
Export
Europe
#4 Material
#4 AR
# 3 Interco
AR/AP (0%
markup, No VAT)
HQ Country
Registration/ No
VAT
Bill From
Reseller/
Distributor
Ship To (Registered/ Non
Registered) ** Reseller in
Netherlands, then NETH
21%. Other member state,
VAT Registration, etc.
#3 Interco AR/AP
HQ
Import from CNY
NETH Offset VAT
of 21%
History of Intercompany in Oracle
Supported Transactions flows: (from Oracle White Paper)
▪
Internal Drop-Ship (older functionality – 10.7)
▪
External Drop-Ship (released in 11.5.3)
▪
Standard Single Hop Inter-company (11.5.9)
▪
Global Purchase Agreements (GPA) (11.5.10)
▪
Global Intercompany/ Advanced Intercompany System (GIS/AGIS)
▪
Double Hop Inter-company (not supported in Oracle R12)
Conceptual Understanding
Drop Ship
Customer
Bill-to
Ship-to
Shipment
Sale and Invoice
Entity A
Selling Entity
INV-Org A
OM: Book Sales Order - Reserve
with Ship-From Warehouse
of Inv Org B
AR: Trade Invoice To Customer
AP: Create IC AP Invoice from
Entity B
IC Invoice
Entity B
Shipping
Entity
INV-Org
B
OM: Pick Release, Ship-Confirm, Inv
Interface, Costing
AR: Create IC Invoice To Entity A
Single Node Intercompany
Customer
Bill-to
Ship-to
Sale and Invoice – not
directly related
Entity A
“Selling
Entity”
INV-Org
A
Shipment
and IC Invoice
PO: Internal Requisition
PO: Create Internal Order
AP: Create IC AP Invoice from
Entity B
Entity B
Shipping
INV-Org B
OM: Import Internal Sales Order
OM: Reserve, Pick Release, ShipConfirm, Inv Interface, Costing
AR: Create IC Invoice To Entity A
Supplier
PO
Pay
Receive Purchase Order,
Ship to
Entity A
“GPA Entity”
Global Purchase Agreement
(Centralized Procurement)
Shipment
INV-Org A
PO: Purchase Order (Auto)
AP: Create IC AP Invoice from
Entity B
PO: Create Requisition
Requisition for Item
On GPA
Entity C
“Accounting”
INV-Org C
Intercompany AP
Entity B
“Procuring”
INV-Org B
INV: Create Intercompany AR
INV: Create Intercompany AP
INV: Create
AP: Create IC Invoice To Entity A
AR: Create IC Invoice to Entity B
AR: Create IC Invoice To Entity A
Intercompany AR
Customer
Bill-to
Multiple Hop Intercompany
Ship-to
Not directly related to
transaction
Entity A
“Selling Entity”
Shipment
INV-Org A
OM: Import Internal Order
Pick, Pack and Ship
PO: Create Internal Requisition
PO: Create Internal Order
IR/ISO
AR: Create IC Invoice To Entity C
AP: Create IC AP Invoice from
Entity C
Intercompany AP
Entity B
“Procuring”
INV-Org B
Entity C
“Accounting”
INV-Org C
INV: Create Intercompany AR
INV: Create Intercompany AP
INV: Create
AP: Create IC Invoice To Entity A
AR: Create IC Invoice to Entity B
Intercompany AR
Global Tax
Why is eB Tax Important?
■
Oracle’s Stated Direction: Oracle plans to eliminate tax integration with 3rd party tax-rules
engines such as Sabrix, Taxware and Vertex. With Oracle Fusion, Oracle will not support 3rd
party tax rules integration, though the upload of content (e.g. tax rates) will still be possible.
■
Integration: Oracle eB Tax is tightly integrated with Accounts Payable, as well as Oracle
Accounts Receivable, Order Management, Purchasing and Oracle Channel Revenue
Management modules. By using Oracle eB Tax, companies eliminate the need to develop
or implement integration to the 3rd party tax rules engine.
■
Fusion: Oracle eB Tax is one of the few modules that remains virtually unchanged in Oracle
Fusion. (The other modules) are the Payments Engine and the Supplier Master in Oracle AP
and Multi-Org in GL, which is mostly configuration and not necessarily a module.) With
Fusion, Oracle has built an enhancement that will allow for the creation of tax regimes,
rates and rules in a spreadsheet for automated upload.
Oracle AP Integration with eB Tax
General Ledger
Journals
Oracle Lease
Management
Journals
Accounts Payable
Purchase Orders
Recepts
Tax
eB Tax
Tax
Invoices
Credit Memos
Invoices
Credit Memos
AP Invoices
Credit Memos
Tax
Purchasing
Order
Management
Tax
Oracle Channel
Revenue
Management
Accounts
Receivable
Tax Rules Planning Spreadsheet
Tax Reporting
Conclusion
Oracle Desupport Dates
Release
GA Date
Premier
Extended
Sustaining
11.0.3
May, 1999
February, 2002
Not offered.
January, 2009
11.5.1-11.5.6
May, ‘00-Jan, ’02
July, 2006
“
11.5.7
May, 2002
May, 2007
“
“
11.5.8
November, 2002
November, 2007
“
“
11.5.9
June, 2003
June, 2008
“
“
11.5.10
November, 2004
November, 2009
December, 2014**
“
12.0.0
January, 2007
January, 2012
January, 2015
“
12.01
April, 2007
April, 2012
April, 2015
“
12.02
July, 2007
July, 2012
July, 2015
“
12.03
October, 2007
October, 2012
October, 2015
“
12.04
January, 2008
January, 2013
January, 2016
“
12.05
May, 2008
May, 2013
May, 2016
“
12.06
November, 2008
November, 2013
November, 2016
“
12.1.1
May, 2009
May, 2014
December, 2018
“
12.1.2
December, 2009
TBD
TBD
“
12.1.3
August, 2010
TBD
TBD
“
12.2.1
September, 2013
TBD
TBD
“
12.2.2
October, 2013
TBD
TBD
“
12.2.3
May, 2014
TBD
TBD
“
** 11.5.10 desupport notice from Metalink, (Doc ID 806593.1)
Indefinite
The basic questions for companies that are on Oracle (11.5.10 or R12) are:
Do we upgrade to Oracle R12.1.3 or do we go for Fusion?
Should we develop a “cloud” strategy?
What are our options?
E-mail: paul_kirch@yahoo.com
Cell Phone: 408-316-5899
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Appendix