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February 7, 2007

Oracle Financials R12 - Managing Global Compliance

All compliance is local, so starting a blog about ‘global’ compliance may seem to be supporting an oxy-moron. Oracle Corporation VP Terrance Wampler's recent blog about Globalization, which he defines as "the methodology for implementing and maintaining a holistic view of your business operations", led me to think about how one would approach this tension between "local compliance" and "global competitiveness" as a requirements problem.

Managing compliance is always problematic, and local regulatory, legal, accounting and tax staff spend a lot of time extracting data from their Oracle E-Business Suite systems through various means and preparing endless spreadsheets and filling out forms for filing their compliance reports (e.g. Income taxes, Sales Taxes, Labor Statistics, Workers Compensation, etc.)

It is not possible for Oracle, or any business application software vendor, to support complete compliance reporting in every single jurisdiction. But customizations are costly not only to develop but also to upgrade, and also maintain in compliance with regulation. Enter the personalization approach, originally called adaptation, in which no code is changed, only parameters are manipulated to achieve the desired result. Originally, it meant simply enabling Flexfields with Validation. Reports still had to be produced and lost of them, then support for simple data extraction and reporting in the form of RXi was introduced, then Discoverer. release 12 now includes tools like XML Publisher inegrated with BI and Discoverer which will help to reduce report generation costs. But, what about those pesky regulations that need to be applied to transaction processing?

Enter the rule based engine. Hard coded customization in forms and programs have been replaced in the sub-ledgers and other products by rule engines for tax and accounting that users can modify and maintain. These engines now support much more flexibility for the subject matter experts (SME) groups to apply local compliance requirements in various jurisdictions. The neat thing with these engines is that they also allow the end user to test the results before applying them, a feature I would recommend any SME implementer to take advantage of.

Posted by alexfiteni at February 7, 2007 9:18 PM


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