Oracle Release 12

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?

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.

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.

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 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
.

Oracle Lifetime Support

The announcement of a new release can raise concerns for organizations as to the level of support they will receive for older versions and when that version will be de-suported.


To meet these concerns Oracle have announced a Lifetime Support Policy.


The implementation of the oracle E-Business Suite is often a significant investment in terms of expenditure, time and organizational change. Whilst the announcement of a new release can be potentially good news to Organizations, the downside is that having made that investment, or reviewing the new functionality and no cost benefit accrues, upgrading may make to business sense.


The Oracle support mechanism of announcing de-support dates for versions can lead to upgrades that organizations feel

The policy outlines 3 levels of support for the Oracle E-Business Suite:

• Premier Support
• Extended Support
• Lifetime Support
  
  Whilst offering a Lifetime Support Policy, this looks to be an evolutionary process for customers on 11i7 onwards. Careful review of the ongoing support mechanism for your organization is recommended.
  

Information and Data sheet: Oracle Support Page

Oracle Applications Unlimited

Applications Unlimited is Oracle's commitment to existing users of JD Edwards, Oracle EBS, Peoplesoft and Siebel to maintain and improve current product lines. The protection of investment in current software packages is vital, many organizations being concerned they would need to switch to a new product or forced to upgrade as a result of Oracle's new acquisitions.


To protect investment Oracle has outlined:

• Brand new releases - commitment to existing product families
• No forced migrations - upgrade when it is right for the organisation
• Dedicated development teams - ongoing development and support

As part of the Applications Unlimited commitment to the E-Business Suite, Oracle announced the general availability of Release 12.

This is obviously a welcome step for all users within the new wider Oracle community. Fusion is still some way off, users of JD Edwards, Sieble and Peoplesoft find they are not been driven to use the Oracle EBS, with EBS users able to move ahead with release 12. In addition, Oracle's lifetime support policy potentially secures the investment for users EBS 11.5.7+, by providing sustained indefinite support. Release 12 focuses on global users, so unless there is specific functionality or technical enhancements which may benefit organisations, staying on 11i is a valid strategy.

Oracle seem to have all bases covered - let us hope with the diversity of products, applications and architecture that they can all be effectively supported.

Information: Oracle Applications Unlimited Program
Interview with John Wookey SVP Applications Development at Oracle

Oracle Release 12

Oracle's latest version Release 12 was made generally available in January 2007. The release aims to provide greater levels of control and transparency by use of a centralised financial architecture, whilst supporting local regulatory and cultural country specific requirements.

The key messages are:
· Think Globally - using business intelligence and analysis tools
· Work Globally - using the global capabilities of the applications
· Manage Globally - using the latest system architecture and middleware

The focus is on global operations and shared service efficiencies, as well as application specific improvements. One of the most fundamental changes occurs with the new Global Financial Architecture, which introduces 6 Major Initiatives.
· Ledger and Ledger Sets
· Multi-Org Access Control
· Sub-ledger Accounting
· Tax Engine
· Inter-company
· Bank Model

Ledger and Ledger Sets
Ledgers essentially replace Sets of Books, and introduce a 4th C to Calendar, Currency and Chart of Accounts, Accounting Method. The use of ledger sets replaces the Alternative Accounting Representation introduced in 11.5.7, and provides a rule-based mechanism for each ledger, overcoming some of the limitations of the current functionality.
The use of ledger sets streamlines the set up process; a single set of rules could be defined for all IFRS ledgers and attached to each ledger in turn. The local GAAP ledgers having the appropriate country specific rules.


Multi-Org Access Control (MOCA)
Very much aimed at shared service operations, access to operating units (OU) is role based, with a single responsibility able to access multiple OU.


Sub-Ledger Accounting
Sub-ledger accounting supports ledgers by generating the accounting entries for each ledger from a set of event based rules. A single transaction could therefore generate distribution lines for IFRS ledgers and local GAAP ledgers.


Tax Engine
The tax engine generates indirect tax entries based upon pre-defined rules - the 4 P's Parties / Places / Products / Processes. Tax entries are now held in a Tax Transactions repository to streamline reporting.


Inter-company
The Global Inter-company System (GIS), becomes Advanced GIS. The most significant feature being is the generation of invoices between companies, overcoming a major shortfall in existing functionality.


Bank Model
The biggest change to the bank model is that bank accounts are now attached at Legal Entity level rather than Operating Unit in current versions. The capability to pay across operating units is also been introduced. Banks accounts can be shared by applications and can be designed for use by Payables, Receivables and Payroll.

Foresight Global Website

The Foresight Global website is up and running.

http://www.foresightglobal.co.uk/




The aim of the site is to provide resources to assist everyone in meeting the challenges of their E-Business suite implementations.

The main pages are:

• Resource Centre Useful links to Oracle Sites / User groups /Reference Info / Books
• Oracle EBS Overview of EBS Applications / Reporting Tools / Global Support
• Global Information Reference of Globalisations /MLS /Local Books
• EBS Framework Information on managing EBS / Support / Training
• Oracle News Latest from Oracle / User Groups / Events

There are links to additional pages including information on release 12.