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Presented by Alex Fiteni CMA. This is a distillation from several projects resulting in some basic "rules of the road" when implementing or upgrading to Oracle E-Business Tax in R12.

The Oracle Openworld conference is the premier marketing event for Oracle annually held in San Francisco. The investment this year might just be worth it. Between the unveiling of a new technology products from the Sun partnership/merger to the first of demos of Fusion, we see that the Oracle technology ecosystem is in full flower.

The ideas outlined can be found in the Oracle Supply Chain Solution, which includes not only Advanced Procurement, but also Supply CHain execution, PLM, Advance Plannning, Manufacturing and Transportation Management, among others.

For global manufacturing and distribution companies, an efficient Supply Chain Management proces is a critical success factor to ensuring margins are maintained across complex trade, tariff, tax and regulatory boundaries. The risks inherent in managing a global supply chain are also further complicated by fluctuating foreign exchange, ensuring secure supply lines, managing supplier relationships while recognizing time zones and cultural diffferences.

The consulting SME will review these risks against standard SCM risks matrices, verify secure and efficient electronic transaction processing exchanges follow best practices, while also validating that approproate COSO controls are in place throughout the business process.

Oracle also has a section dedicated to Business Intelligence , where you can download the latest versions.

Oracle Blogs has aggregated executive, employee and mom-oracle contributors in a convenient way for browsing. Its one of my favorite links. You will also find links to Mark Rittman's insightful musings, as well as Richard Byrom's Oracleappsblog site, which supports multiple authors.

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.

It seems that the .xml validation, export and import process that each product uses may differ slightly. I tried a small (< 100 task file) trial and could move materials from MSP to OWB, I tried a larger file of > 500 tasks and > 50 resources, which failed, mostly due to basic validation errors in the file, since I had not cleaned up the file in MSP. OWB did not fail though, and simply said the file was bad. I then saved the smaller file, without any changes in OWB. Now I tried opening this same file in MSP. MSP had a coronary and restarted. Oh, well, so much for supporting even their own de facto standard.

Anyway, I looked though the OWB functions and find them to be quite intuitive or someone raised on MSP. I like the Gantt Chart, it is not too fussy. It seems to be easy to use, and has several views which work in a similar manner to MS-Project.

Unfortunately, I do see lots of enhancement requests, but I do not see any updates to the code since 2005 (v.1.1.4) so getting new functionality may be a pipe dream.

The .XML file format for a Project is based on MSP’s version as a de facto standard. It would be nice if a more robust standard something like the Project Management XML Schema consortium which is maintained and documented as PMXML by Virtual Projects. It should be noted that Primavera does not seem to support PMXML either, but one lives in hope.

The Legal Entity in Oracle eBS Release 11i and prior corresponded to the Operating Unit Government reporting entity/Legal entity (GRE/LE) used by HRMS in defining payroll and HR jurisdictional requirements. The Set of Books was also mapped to the GRE/LE. This imposed a limit on how to structures that could be modeled with this approach. The rule for Global Financials is 1-1-1, which created problems in accounting, transaction flows and compliance when the legal rules and business operations were not monolithic or top-down.

A new implementation of this compliance concept in Oracle eBS is defined as the system ‘Legal Entity’ corresponds with an independently identifiable ‘legal person’ – a public company, a private business or limited partnership, a trust, a not-for-profit, a government or a non-government organization (NGO) - that can operate as if it were a real person in conducting business transactions. Along with this new business object comes some basic functionality that helps to migrates the old GRE/LE concept buried in the Operating Unit and more functionality through flexible accounting rules, tax rules, and some basic legal rules.

In consequence, formalizing the LE releases the Operating Units (OU) from acting as surrogates for real world ‘Legal Entities’ as in prior releases (when it was called a GRE/LE). The Operating Unit, however, retains its primary role in managing user access. The Legal Entity now manages the local jurisdiction requirements. This arrangement helps best practices like Shared Services to be rolled out more easily.

In separating the legal requirements from operational requirements at the transaction level, the transaction flows are now able to apply legal requirements based on the Legal Entity context (found in the relative juxtaposition of the First and Third Party contexts) while allowing the security context (within limits) to be set by the OUs assigned to Responsibility used to access the transaction flow. I’ll look at some of the advantages and disadvantages of this approach in more detail in future blogs.

All of this is nicely described in the Oracle E-Business Suite ‘Financials Concepts Manual’ (120fincg.pdf) and also introduces some tools such as the ‘system Legal Entity Configurator’ to allow the user to properly choose the right configurations (or closest thereto) to support local compliance needs.

Also note that some good diagrams are also evident in the Oracle E-Business Suite R12 Financial Concepts document, which explain visually how the various functional components (Legal Entity versus business organizations) relate to a multi-country implementation scenario.

To be Continued….

The issue that many organizations face are that the Best of Breed point solution approach is costly. While one has the advantage of simple, easy to use and meets end user exact requirements, the 'behind the scenes' costs of support, integration, software upgrades, end user training, as well as the overhead of managing data access and data quality, ensuring governance and controls are in place for all the applications at the same level, all of which can be quite daunting. Enter Oracle's unique approach 'Applications Unlimited', which uses the Fusion Middleware to integrate all of the Applications Suites (Oracle E-Business Suite, JD Ewards, Peoplesoft Enterprise, and Siebel) together.

Nevertheless, the Best of Breed approach should still be evaluated carefully before embarking on the support and operation of disparate point applications. The investment should cover not only IT initial hardware, software and implementation and customization costs, but also software support fees, IT operations support, ongoing training, skills enhancement as new features are introduced and product knowledge management, integration, and upgrades - often on different technology stacks and on different schedules. On the other hand, the benefits arising from the implementation must be carefully evaluated as well. The direct savings arising from the efficiencies gained from a point solution in one process may likely be offset by the negative as well as positive impacts to one or more other business process efficiencies, which are often unexpected or under-estmated. In any event, a full analysis of the costs and benefits of a BoB implementation should ensure that the true costs and benefits are included in any recommendation.

The new Tax Services provide several new ways to perform tax operations, not simply tax calculations. Some of the new services include a consolidated tax line audit data repository, integration with XML Publisher, a new tax simulator to verify tax set up, and most importantly new rules and conditions that leverage more data associated with the transaction and thus less reliance on direct assignment and defaulting of tax codes. The functionality is ideal for a global organization, with complex requirements that are in constant flux. This new flexibility also adds complexity, so there is a learning curve before the tax analyst can fully leverage the nuances in the product to meet their compliance needs. Nevertheless, for simple taxes, some basic set up steps can ease the implementation of simple tax computations. As well, the new tax integration services allow third party tax engines to be configured more easily.

All the new functionality, however, poses a problem for the migration from Release 11i. The upgrade process, although automatic, should be approached with some care. While the upgrade will occur automatically, there is no real advantage to the organization since all of the old tax codes become tax classifications, and automatically use the old defaulting rules. Thus, no harm no foul. To get some real value out of the new tax product, however, the organization should take stock of its existing configuration, including third party integrations, and determine a path through the upgrade to leverage the new tax services.

I will go over some of the new Oracle E-Business Tax features, their challenges and benefits in future blogs.

The event was simulcast in Europe and South America, and a second round for Asia-Pacific later in the day. As a participant, the hype certainly made for good television. The ensuing months will confirm if Oracle really has managed to stitch the applications together to provide users with a choice.

Some key highlights that I heard included:
A. All the Suites have incorporated aspects of the new Fusion middleware platform, most notably the Service Oriented Architecture (SOA) components. Along with these new components, a repository of well documented pre-built integration points are ready use, which helps to sell the 'Best of Breed' solution approach, and support existing customers.

i. Existing customers can upgrade and eliminate a lot of integration customizations that may exist in a 'Best of Breed' environment.
ii. New customers can lower their Total Cost of Ownership (TCO) simply by not having to invest in complex inter-applications integrations amongst the five Suites since many come pre-built 'out of the box'.

B. Oracle OnDemand will fully support all Suites and some 1000 customers have signed up to-date.

C. There is an active ISV program and SOA/BPEL has become one of the key means of integrating ISV applications offerings into the Suites.

The afternoon sessions were dedicated to the individual Suites Overviews. I attended the Oracle E-Business Suite R12, presented Steve Miranda, using the mantra Think Globally, Work Globally, Manage Globally. The key areas that changed, over and above the technical updates above, include:

A. A new Accounting Engine, that supports multiple accounting representations, and a comprehensive audit trail.
B. A new Tax engine, E-Business Tax, that replaces several point solutions embedded in various products, and formalizes a tax line audit repository.
C. A new Legal Entity structure along with Ledger Sets, now supports compliance documentation and reporting requirements while ensuring full managerial reporting.

I will be looking into these new features and offering my views on their application to business and compliance problems.

The Oracle Applications User Group's MultiNational SIG met in Tennessee this week at the Collaborate06 Conference. The agenda covered a wide variety of topics, led by the Chair, Hans Kolbe, along with SIG board members. Presenters and panelists included Steve Jolly from Genpact, Hans Kolbe of Celantra Systems, Patty McGrath of CSC, Mohan Iyer and myself. Our presentations are located on the MultiOrg page. The sessions examined the risky depths of the multi-national roll-outs; the vagaries of outsourcing; the business of running a business on a global basis; and the pressures of multinational implementations and upgrades. There was some speculation about the Oracle E-Business Suite Release 12 for Financials. An Oracle representative was in attendance and provided some answers to our qustions. On a final note, the MNSIG did get an award for either longevity or plane bull headedness. Oh, and I did get the MNSIG T-Shirt…… does life get better than that?