Oracle released R12 in January 2007, so where two years on?
The number of R12 installations globally was presented at the New York OAUG a in June 2008 were as follows:
Implementations 55
Re-implementations 10
Upgrades 10
Events have moved on since then but this is an indication that the take up of R12 has been slow.
From the figures it seems it is new Oracle customers who are taking advantage of the ability of R12 to Think globally, Work globally, and Manage globally. A comment passed by a senior manager in an US company, who is already an Oracle, was he saw “no compelling business reason to migrate”.
Discussions with clients and consulting colleagues on a global basis indicate that many organizations are waiting to ensure that R12 has stabilized before considering moving. For many existing users the problems of the early versions of 11i are well known. Indeed for Global companies it was really not until 11.5.7 that the Alternative Accounting Representation functionality for management and statutory books was effective. This reticence has probably been wise as the 12.0.5 (RUP5) 5 for Financials contained more than 4,500 fixes (ref Metalink 577406.1).
Indications are that R12 is now beginning to stabilize and Oracle are already looking towards April / May 2009 for release of 12.1.
The interest in R12 is certainly there. At the UK OUG in Birmingham the R12 sessions were generally presented to full rooms, indicating that many organizations are considering R12, the question is whether that interest will translate into projects.
The global downturn in the economy is obviously going to impact many IT spend budgets. Are the functionally changes within R12 enough to support a business case? Early adopters of R12 were indicating a 6 to 8 month migration project and 12 months plus for implementation. For many organizations that have rolled 11i out across multiple sites, processes are in place to meet some of the limitations of multi-org and existing functionality. And we should not forget that those organisations have realised the benefits of the single instance which probably outweigh any of the limiations of 11i.
The other factor for CIO’s to consider is Fusion. Fusion is moving to a Service Orientated Architecture which many people describe as a paradigm shift. So would you want to move to 12 with it’s new Global Architecture, then to Fusion with SOA - or is it of lower risk to stage through 12?
So the question is - are there compelling business reasons to move to 12?
Thursday 2 April 2009
Wednesday 31 October 2007
Oracle Release 12 - Sub Ledger Accounting
The new Global Architecture with R12 introduced the concept of ledgers each capable of providing differing accounting representations; one ledger for example could conform to IFRS, another to local GAAP.One of the key components is the new sub-ledger functionality.
This generates the actual accounting entries for each ledger dependant upon defined rules. In some respects this is similar to the dual posting in the Global Accounting Engine (AX).
This generates the actual accounting entries for each ledger dependant upon defined rules. In some respects this is similar to the dual posting in the Global Accounting Engine (AX).
In the above example, a single invoice generates the accounting for the Global COA, and the French statutory COA. The new terminology identifies a Transaction COA and an Accounting COA.
The mechanism to provide this functionality is the Accounting Methods Builder (AMB).
The AMB can derive accounts for individual segments or for the full code combination based upon the rules. This looks to continue the account generator /auto-accounting type functionality which has been used in various applications over the years.
Differing charts of accounts is only one feature of the sub-ledger engine; derivation rules at different levels from journal line to application can be specified, GL summarisation (summary / detail), reversal methods, and reporting sequences are other components. The AMB therefore provides the mechanism to build the rules that may apply for global management accounting, deriving accounting for corporate financial reporting, and individual country tax rules. This looks to be a powerful tool extending beyond the Alternative Accounting Representation functionality currently available in 11.5.7+, replacing the Global Accounting Engine (AX), as well as replacing many of the GL globalisation reports particularly within Europe.
Given the scale and complexity of the Oracle e-Business suite, the Accounting methods Builder looks as if it may become one of the key focus areas of the future.
The mechanism to provide this functionality is the Accounting Methods Builder (AMB).
The AMB can derive accounts for individual segments or for the full code combination based upon the rules. This looks to continue the account generator /auto-accounting type functionality which has been used in various applications over the years.
Differing charts of accounts is only one feature of the sub-ledger engine; derivation rules at different levels from journal line to application can be specified, GL summarisation (summary / detail), reversal methods, and reporting sequences are other components. The AMB therefore provides the mechanism to build the rules that may apply for global management accounting, deriving accounting for corporate financial reporting, and individual country tax rules. This looks to be a powerful tool extending beyond the Alternative Accounting Representation functionality currently available in 11.5.7+, replacing the Global Accounting Engine (AX), as well as replacing many of the GL globalisation reports particularly within Europe.
Given the scale and complexity of the Oracle e-Business suite, the Accounting methods Builder looks as if it may become one of the key focus areas of the future.
Wednesday 12 September 2007
Oracle ReportingStrategy
With the final completion of Oracle’s acquisition of Hyperion,the postioning of the reporting elements of their recent aquisitions is starting to emerge.
Oracle's go forward strategy is termed Enterprise Performance Management (EPM). This has has three elements, Performance Management Applications, Business Intelligence Applications and Transactional Systems.
Performance Management Applications will be based upon Hyperion System 9, and includes Financial Consolidation, and Planning and Budgeting. Performance Management Applications extend beyond Oracle EBS, and can sit over non-Oracle systems ( and includes certification for SAP). This continues Hyperions position as the market leader in reporting from disparate systems. Oracle Press Release
The Oracle BI financial analytical application is based upon Siebel reporting tools. This will supply analytical subject areas such as revenue analysis, working capital and profitability. The ad hoc reporting capability will be provided through a tool called Oracle Answers.
One of the key questions is what now happens to existing products such as Discoverer, Daily Business Intelligence, Enterprise Planning and Budgeting, Consolidation Hub, and other existing reporting products? Many of the products will now become part of Applications Unlimited (AU), though the investment in development may be low, which would steer users to the EPM framework. It has been indicated that Discoverer will essentially become part of AU, though investment would continue and workbooks can be included in various dashboards, though Oracle Answers looks to become the go forward ad hoc reporting tool of the future.
Oracle's reporting strategy has been confusing for users. Various reporting tools and intelligence products have been released over the last 10 years with no real continuity. Let us hope we will get stability and see tools develop and not have to contend with a new offering evey two or three years.
Monday 3 September 2007
Oracle Release 12 - Ledgers and Ledger Sets
The organisational structures in release 12 include a new classification of ledgers, and together with ledger sets have the characteristics of sets of books, with the period close taking place at ledger set level.
Equating ledgers to the old sets of books we still have the 3 Cs – Chart of Accounts, Currency and Calendar, with a new C – Accounting Method (ok it needs some imagination).
So what can be considered within the fourth C – Accounting Method?
Country – Statutory charts of accounts have long defined the requirement for different sets of books, however with the use of sub-ledger accounting rules a further dimension is added to country specific requirements.
Jurisdiction – Even within a country there may be more than one set of rules that may necessitate separate ledgers
Case Study: One company found the tax laws between Beijing and Shanghai differed significantly for their organisation so 2 sets of books were deemed to be required.]
Case Study: Specific indirect taxation rules applied to one part of a business so separate sub-ledgers were required to handle that requirement.
Corporate Governance – Directors of a company are legally responsible for the activities of a company. With 11i, the sharing of a set of books can raise questions as to who has overall responsibility.
Case Study: Single set of books shared by 4 balancing entities caused reconciliation, control and responsibility problems. Company directors welcomed own set of books as it improved their control and corporate governance.
In release 12, 4 ledgers –essentially legal entities – and legal associations could solve 12 the problem encountered in the case study.
Accounting Sequencing – Many tax jurisdictions require that a legal entity has it’s own set of accounting sequence numbers, and that all the transactions in a ledger apply to that sequence. This is imperative where accounting entry reports such as the Libro Giornale in Italy, and the Brazilian General Ledger Daily Book. This requirement is common in Southern Europe, Eastern Europe and Latin America, with much of continental Europe looking for distinct sequence numbers.
What release 12 brings is a greater use of the Legal Entity organisational classification than we saw in previous versions. The key features being tax calculations, inter-company balancing and bank ownership at legal entity level.
Oracle outline 3 organisational axis - legal, business and functional.
Ledgers fall on the legal axis, providing a mechanism to record Establishments, Registrations, Jurisdictions, Legal Authorities and Associations. Legal entities own assets, financial transactions and have regulatory obligations. At it’s simplest a legal organisation (including public sector bodies) has a balance sheet, journal entries and some form of company return. Any Oracle set up needs to support these basic requirements.Equating ledgers to the old sets of books we still have the 3 Cs – Chart of Accounts, Currency and Calendar, with a new C – Accounting Method (ok it needs some imagination).
So what can be considered within the fourth C – Accounting Method?
Country – Statutory charts of accounts have long defined the requirement for different sets of books, however with the use of sub-ledger accounting rules a further dimension is added to country specific requirements.
Jurisdiction – Even within a country there may be more than one set of rules that may necessitate separate ledgers
Case Study: One company found the tax laws between Beijing and Shanghai differed significantly for their organisation so 2 sets of books were deemed to be required.]
Case Study: Specific indirect taxation rules applied to one part of a business so separate sub-ledgers were required to handle that requirement.
Corporate Governance – Directors of a company are legally responsible for the activities of a company. With 11i, the sharing of a set of books can raise questions as to who has overall responsibility.
Case Study: Single set of books shared by 4 balancing entities caused reconciliation, control and responsibility problems. Company directors welcomed own set of books as it improved their control and corporate governance.
In release 12, 4 ledgers –essentially legal entities – and legal associations could solve 12 the problem encountered in the case study.
Accounting Sequencing – Many tax jurisdictions require that a legal entity has it’s own set of accounting sequence numbers, and that all the transactions in a ledger apply to that sequence. This is imperative where accounting entry reports such as the Libro Giornale in Italy, and the Brazilian General Ledger Daily Book. This requirement is common in Southern Europe, Eastern Europe and Latin America, with much of continental Europe looking for distinct sequence numbers.
What release 12 brings is a greater use of the Legal Entity organisational classification than we saw in previous versions. The key features being tax calculations, inter-company balancing and bank ownership at legal entity level.
Oracle R12 Financial Concepts - Organisational Structures
Oracle's new Financial Concepts manual provides a useful and practical overview of the structural elements within release 12.
Getting the structural elements correct within Oracle is a critical success factor for any Oracle system, notably organisational structures and flexfield design, particularly the chart of accounts, as these elements dictate the transactional and information flow through the applications.
In terms of structure, release 12 highlights the concept of system entities building upon the existing organisational classifications with 2 new crucial additions - Government Reporting Legal Entity and Ledger, giving the following "important system entities:
• Business Group and Departments
• Government Reporting Legal Entity (GRLE)
• Legal Entity
• Ledgers
• Operating Unit
• Inventory Organization
• Human Resources Organization
In terms of how these organisations are used, Oracle recommends looking at 3 axis - legal axis, business axis and reporting access.
Looking at the legal axis - business groups hold legislative codes determining what country specific HR / Payroll functionality is used, Government Reporting Legal Entities define which organisations hold contracts of employments, with Ledgers defining the financial legal dimension.
It should be noted that operating units hold transactions relating to a particular legal entity, and inventory is owned by legal entities. Any movement between them being an inter-company transaction.
Business organisations can be defined using HR organisations, the key here is to ensure that employee related transactions can be tied to ledger. A common example in global organisations being an employee who is on secondment may belong to a particular business organisation for business reporting, but his transactions would be required to be processed in the correct legal organisation.
If we equate ledgers to sets of books (SOB), then in terms of organisational structures there is no real change. The replacement of SOB by an organisational classification being an architectural change, though it is recognised that the ledger set up consolidates and develops existing functionality to produce a more comprehensive solution.
The use of Government Legal Reporting Entities is very useful, as it allows business organisations to be flexed to meet the challenges within a business, whilst still allowing for a separate legal employing structure which tens to be a lot less flexible.
One very welcome addition to the Oracle Documentation is the Oracle Financials Concepts Guide Release 12 authored by Seamus Moran. This manual not only outlines the concepts, but provides practical examples and tips for existing Oracle users.
Information: Oracle Documentation Library
http://www.foresightglobal.co.uk/Resources/oracle_R12Resources.htm#Oracle%20Documentation
Getting the structural elements correct within Oracle is a critical success factor for any Oracle system, notably organisational structures and flexfield design, particularly the chart of accounts, as these elements dictate the transactional and information flow through the applications.
In terms of structure, release 12 highlights the concept of system entities building upon the existing organisational classifications with 2 new crucial additions - Government Reporting Legal Entity and Ledger, giving the following "important system entities:
• Business Group and Departments
• Government Reporting Legal Entity (GRLE)
• Legal Entity
• Ledgers
• Operating Unit
• Inventory Organization
• Human Resources Organization
In terms of how these organisations are used, Oracle recommends looking at 3 axis - legal axis, business axis and reporting access.
Looking at the legal axis - business groups hold legislative codes determining what country specific HR / Payroll functionality is used, Government Reporting Legal Entities define which organisations hold contracts of employments, with Ledgers defining the financial legal dimension.
It should be noted that operating units hold transactions relating to a particular legal entity, and inventory is owned by legal entities. Any movement between them being an inter-company transaction.
Business organisations can be defined using HR organisations, the key here is to ensure that employee related transactions can be tied to ledger. A common example in global organisations being an employee who is on secondment may belong to a particular business organisation for business reporting, but his transactions would be required to be processed in the correct legal organisation.
If we equate ledgers to sets of books (SOB), then in terms of organisational structures there is no real change. The replacement of SOB by an organisational classification being an architectural change, though it is recognised that the ledger set up consolidates and develops existing functionality to produce a more comprehensive solution.
The use of Government Legal Reporting Entities is very useful, as it allows business organisations to be flexed to meet the challenges within a business, whilst still allowing for a separate legal employing structure which tens to be a lot less flexible.
One very welcome addition to the Oracle Documentation is the Oracle Financials Concepts Guide Release 12 authored by Seamus Moran. This manual not only outlines the concepts, but provides practical examples and tips for existing Oracle users.
Information: Oracle Documentation Library
http://www.foresightglobal.co.uk/Resources/oracle_R12Resources.htm#Oracle%20Documentation
Sunday 2 September 2007
Oracle Integration Architecture
Oracle Integration Architecture is part of the Applications Unlimited policy. "Oracle has bought many best-of-breed and industry specific applications, and now we need to make them work together"
When Oracle EBS 11i was launched in 2001, the key message was "suite not kit", that is have an integrated business system rather than a number of different applications bolted together. Memories of the Oracle Rocky Horror show at Appsworld Paris, saw an Oracle musical outlining the folly of the best of breed approach.
So have Oracle done a U-Turn?
In terms of market penetration, the Oracle EBS would have needed to take customers away from their best of breed applications and to use Oracle HR, CRM, Financials etc., as well as meeting the needs of the SME's. Given the investment by many organisations in PeopleSoft, Siebel, JD Edwards, and a host of other applications, it would have taken Oracle many years to persuade customers to move to the Oracle EBS replacing their existing systems. The quickest way to gain that market and customer base was through acquisition. Within 6 years of the launch of 11i, Oracle have the customer base of the best of breed applications.
Fusion is still the ultimate goal of Oracle, so ultimately the "suite" should become more dominant than "kit". However, as Jose Lazares, Oracle VP for Applications Development outlines, Oracle Application Integration Architecture is an alternative migration strategy to Fusion "Adopting this looser abstraction between systems means that CIO's can plug in Oracle Fusion modules and evolve to it over time"
So with Applications Unlimited providing ongoing development with Oracle release 12, Lifetime Support protecting investment in 11i systems, and Application Integration Architecture bringing the best of breed applications together, it would seem that organizational investment will be preserved and business driven migration plans can be drawn up.
However - what are the timescales, and what precisely will be integrated, and what happens to current investments with Fusion?
Information: Interview with John Wookey and Jose Lazares
(Oracle SVP & VP Applications Development)
Oracle Applications Integrated Architecture
.
When Oracle EBS 11i was launched in 2001, the key message was "suite not kit", that is have an integrated business system rather than a number of different applications bolted together. Memories of the Oracle Rocky Horror show at Appsworld Paris, saw an Oracle musical outlining the folly of the best of breed approach.
So have Oracle done a U-Turn?
In terms of market penetration, the Oracle EBS would have needed to take customers away from their best of breed applications and to use Oracle HR, CRM, Financials etc., as well as meeting the needs of the SME's. Given the investment by many organisations in PeopleSoft, Siebel, JD Edwards, and a host of other applications, it would have taken Oracle many years to persuade customers to move to the Oracle EBS replacing their existing systems. The quickest way to gain that market and customer base was through acquisition. Within 6 years of the launch of 11i, Oracle have the customer base of the best of breed applications.
Fusion is still the ultimate goal of Oracle, so ultimately the "suite" should become more dominant than "kit". However, as Jose Lazares, Oracle VP for Applications Development outlines, Oracle Application Integration Architecture is an alternative migration strategy to Fusion "Adopting this looser abstraction between systems means that CIO's can plug in Oracle Fusion modules and evolve to it over time"
So with Applications Unlimited providing ongoing development with Oracle release 12, Lifetime Support protecting investment in 11i systems, and Application Integration Architecture bringing the best of breed applications together, it would seem that organizational investment will be preserved and business driven migration plans can be drawn up.
However - what are the timescales, and what precisely will be integrated, and what happens to current investments with Fusion?
Information: Interview with John Wookey and Jose Lazares
(Oracle SVP & VP Applications Development)
Oracle Applications Integrated Architecture
.
Wednesday 29 August 2007
Oracle aquires Hyperion
Oracle have continued with their acquisition policy by buying Hyperion.
Hyperion has been widely used as the consolidation tool to bring together data from different sources to provide the composite organization financial results.
The target customers identified by Oracle are the CFO office for Hyperion, and Oracle BI applications for line business managers. This would indicate the current Oracle BI products (Sales, Finance, Projects, Procurement, Supply Chain) will continue. The inclusion of Discoverer in the BI family, and the use in some product families of embedded workbooks provides further integration in the overall reporting concept.
So where does this leave the Oracle EBS user?
Hyperion has been the preferred choice of many Corporations, bringing together a myriad of ledger systems around the globe to consolidate corporate results. The integration with the Oracle EBS is often minimal, with a surprising number of major Companies relying on the key punching of of information from existing ledger systems, including Oracle, into the Corporate consolidation model. Before the acquisition of Hyperion, Oracle produced their own Consolidation Hub, which aimed to expand the consolidation functionality within the Oracle EBS to non-Oracle systems.
For users of Hyperion the key question will be around greater integration into the EBS, with Companies currently consolidating globally using existing functionality asking if Hyperion is part of the core EBS, or does it sit outside, continuing as the Oracle / non Oracle consolidation tool?
Information: Hyperion web site with links through to the Oracle Hyperion page
Hyperion has been widely used as the consolidation tool to bring together data from different sources to provide the composite organization financial results.
The target customers identified by Oracle are the CFO office for Hyperion, and Oracle BI applications for line business managers. This would indicate the current Oracle BI products (Sales, Finance, Projects, Procurement, Supply Chain) will continue. The inclusion of Discoverer in the BI family, and the use in some product families of embedded workbooks provides further integration in the overall reporting concept.
So where does this leave the Oracle EBS user?
Hyperion has been the preferred choice of many Corporations, bringing together a myriad of ledger systems around the globe to consolidate corporate results. The integration with the Oracle EBS is often minimal, with a surprising number of major Companies relying on the key punching of of information from existing ledger systems, including Oracle, into the Corporate consolidation model. Before the acquisition of Hyperion, Oracle produced their own Consolidation Hub, which aimed to expand the consolidation functionality within the Oracle EBS to non-Oracle systems.
For users of Hyperion the key question will be around greater integration into the EBS, with Companies currently consolidating globally using existing functionality asking if Hyperion is part of the core EBS, or does it sit outside, continuing as the Oracle / non Oracle consolidation tool?
Information: Hyperion web site with links through to the Oracle Hyperion page
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