building the business case to upgrade to oracle ebs r12[1]

BUILDING THE BUSINESS CASE TO UPG R A DE TO

OR ACLE EBS R12

wHAT IS A BUSINESS CASE?

A BUSINESS CASE CAPTURES THE REASONING FOR INITIATING A PROJECT OR TASK. THE PURPOSE OF THE BUSINESS CASE IS TO CONFIRM THAT ANY RESOURCES (CAPITAL AND EFFORT) CONSUMED SHOULD SUPPORT A SPECIFIC BUSINESS NEED AND THAT THE COSTS OF THE PROJECT ARE OFFSET BY THE BENEFITS WITHIN AN ACCEPTABLE PERIOD OF TIME.

THE STAKES FOR BUILDING A BUSINESS CASE HAVE BEEN RAISED. MANY FINANCIAL EXECUTIVES ARE DEMANDING FASTER RETURN ON INVESTMENT (ROI). THE POINT WHERE THE BENEFITS ACHIEVED BY A PROJECT EXCEED THE COST OF UNDERTAKING THE PROJECT). THIS SHOW THAT TO UNDERSTANDING THE BENEFITS AND COSTS OF A PROJECT ARE CRITICAL TO ACHIEVING PROJECT APPROVAL.

WHAT ARE THE COMPONENTS OF A BUSINESS CASE? IN ITS MOST SIMPLISTIC FORM, A BUSINESS CASE IS A DOCUMENT THAT DEFINES THE COSTS OF IMPLEMENTING A PROJECT, WHILE AT THE SAME TIME, ATTEMPTS TO ARTICULATE THE BENEFITS (BOTH QUANTITATIVE AND QUALITATIVE). SOME ORGANIZATIONS PROVIDE A FORMAT AND STANDARDS FOR DEFINITION OF THE BUSINESS CASE, BUT FOR THOSE THAT DON’T, THE FOLLOWING TEMPLATE CONTAINS BASIC ELEMENTS OF A BUSINESS CASE:

1. REFERENCE - THIS SECTION DEFINES THE PROJECT NAME, ORIGINS AND BACKGROUND BEHIND THE PROJECT REQUEST. IT MAY ALSO DESCRIBE THE CURRENT STATE, SYSTEMS AND PROCESSES IN PLACE.

2. CONTEXT - A HIGH-LEVEL PROJECT DEFINITION IS CONTAINED IN THIS SECTION. IN PARTICULAR, THIS SECTION SHOULD FOCUS ON HOW THE PROJECT ALIGNS WITH THE STRATEGIC BUSINESS PRIORITIES, AND WHAT OPPORTUNITIES THIS PROJECT MAY ENABLE.

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EVEN IN THE BEST OF ECONOMIC TIMES, MOST ORGANIZATIONS WILL SCRUTINIZE CAPITAL EXPENDITURE REQUESTS TO ENSURE AN APPROPRIATE RETURN ON INVESTMENT (ROI). IN THESE UNCERTAIN TIMES,

EXECUTIVES ARE PAYING CLOSER ATTENTION TO THESE REQUESTS AND ONLY APPROVING THOSE WITH A STRONG BUSINESS CASE. AS THE OWNER OF A PROJECT REQUEST, IT IS INCUMBENT UPON YOU TO UNDERSTAND ITS COMPONENTS INCLUDING THE BENEFITS AS WELL AS THE COST.

THIS WHITE PAPER FOCUSES ON THE COMPONENTS OF BUILDING A BUSINESS CASE FOR AN ORACLE EBS R12 UPGRADE PROJECT. WHY CONSIDER AN UPGRADE NOW? AS MOST PEOPLE ARE AWARE, THE END OF 2010 MARKS THE RETIREMENT OF PREMIER ORACLE SUPPORT FOR ORACLE EBS R11.5.10. ORACLE HAS MADE THIS FACT VERY PUBLIC, RAISING QUESTIONS WITH MOST CUSTOMER. THESE QUESTIONS INCLUDE IDENTIFICATION OF THE COSTS ASSOCIATED WITH UPGRADING, AND THE RISKS OF A “NO DECISION”.

BUSINESS BENEfITS Of EBS R12

LET’S START BY LOOKING AT THE BUSINESS BENEFITS INTRODUCED WITH RELEASE R12 OF ORACLE E-BUSINESS SUITE.

MANY ORGANIZATIONS USING ORACLE EBS ARE AWARE THAT SIGNIFICANT CHANGES HAVE BEEN INTRODUCED IN THE FINANCIAL MODULES OF THE R12 PRODUCT. SPECIFICALLY, ORACLE HAS INTRODUCED A NEW RULE BASED ACCOUNTING ENGINE BETWEEN THE VARIOUS SUBLEDGER MODULES AND THE GENERAL LEDGER. THIS NEW LAYER IS A SINGLE-SOURCE ACCOUNTING. SUBLEDGER ACCOUNTING PROVIDES SEVERAL ADVANTAGES OVER PREVIOUS RELEASES INCLUDING:

SUPPORT FOR SHARED SERVICE ACCOUNTING, TAX PAYMENT, AND BANKING FUNCTIONS.

STREAMLINED CLOSE PROCESSES VIA SUPPORT FOR CLOSING INDIVIDUAL SUBLEDGERS AS

RECONCILIATION AND PROCESSES ARE COMPLETED.

GREATER CONTROL AND MONITORING FROM A SINGLE SETUP WITH ORACLE’S RULES-BASED

ACCOUNTING ENGINE.

IMPROVED ABILITY TO INCORPORATE ACCOUNTING INFORMATION FROM EXTERNAL SYSTEMS

AND ENTITIES.

IMPROVED AUDIT TRAILS FOR TRANSACTIONS IN THE GENERAL LEDGER, LINKING BACK TO

THE APPROPRIATE SUBLEDGER AND SOURCE TRANSACTION.

STREAMLINED SUPPORT FOR INTERCOMPANY TRANSACTIONS.

3. VALUE PROPOSITION - THE VALUE THIS PROJECT WILL BRING TO THE ORGANIZATION IS OF CRITICAL IMPORTANCE TO THE DECISION MAKING. TYPICAL ITEMS IN THIS SECTION ARE BUSINESS BENEFITS, QUANTIFIED BUSINESS VALUE, COSTS/ROI FINANCIAL SCENARIOS, RISKS/COSTS OF NOT PROCEEDING, AND OVERALL PROJECT RISKS.

4. FOCUS - THE PROJECT SCOPE IS DEFINED IN THIS SECTION. IT WILL ALSO INCLUDE A DISCUSSION OF THE ASSUMPTIONS, CONSTRAINTS AND OPTIONS RELATED TO THE PROJECT.

5. DELIVERABLES - THIS SECTION IDENTIFIES THE KEY OUTCOMES, BENEFITS AND DELIVERABLES FROM THE PROJECT. IT MAY ALSO IDENTIFY THE SPECIFIC AREAS IMPACTED (BOTH INTERNALLY AND EXTERNALLY), ALONG WITH KEY STAKEHOLDERS.

6. WORKLOAD - THIS SECTION PRIMARILY FOCUSES ON THE APPROACH FOR THE PROJECT. PHASES, STAGES AND ACTIVITIES ARE DEFINED, ALONG WITH A PROJECT SCHEDULE. THIS PLAN ALSO IDENTIFIES THE EFFORT AND COSTS ASSOCIATED WITH EACH ACTIVITY.

7. REQUIRED RESOURCES - THE RESOURCES REQUIRED FOR THE PROJECT ARE IDENTIFIED. THESE INCLUDE PROJECT RESOURCES, GOVERNANCE TEAM AND FUNDING RESOURCES.

8. COMMITMENTS - THE FINAL SECTION IDENTIFIES THE PROJECT MONITORING PROCESSES. THESE PROCESSES MAY INCLUDING REPORTING PROCEDURES, FUNDING APPROVAL

CONTROLS AND SCHEDULED DELIVERABLES.

“WHILE THE INFORMATION IN EACH SECTION IS IMPORTANT, THE ORGANIZATION AND CONTENT WILL LIKELY BE ADAPTED TO MATCH THE CIRCUMSTANCES OF EACH PROJECT REQUEST.”

COmPONENTS Of ORACLE EBS R12 UPGRADE PROjECT BUSINESS CASE

WITH THE COMPONENTS OF THE BUSINESS CASE DEFINED, THE PRIMARY PURPOSE OF THIS DOCUMENT IS TO PROVIDE INPUT FOR THE COMPONENTS OF AN ORACLE EBS R12 BUSINESS CASE. TO ADDRESS THESE COMPONENTS, WE FIRST EXPLORE THE BENEFITS ASSOCIATED WITH ORACLE’S LATEST EBS RELEASE. THIS DOCUMENT WILL THEN CONCLUDE WITH A DISCUSSION OF THE OCST COMPONENTS ASSOCIATED WITH AN UPGRADE.



BUSINESS BENEfITS Of EBS R12

LET’S START BY LOOKING AT THE BUSINESS BENEFITS INTRODUCED WITH RELEASE R12 OF ORACLE E-BUSINESS SUITE.

MANY ORGANIZATIONS USING ORACLE EBS ARE AWARE THAT SIGNIFICANT CHANGES HAVE BEEN INTRODUCED IN THE FINANCIAL MODULES OF THE R12 PRODUCT. SPECIFICALLY, ORACLE HAS INTRODUCED A NEW RULE BASED ACCOUNTING ENGINE BETWEEN THE VARIOUS SUBLEDGER MODULES AND THE GENERAL LEDGER. THIS NEW LAYER IS A SINGLE-SOURCE ACCOUNTING. SUBLEDGER ACCOUNTING PROVIDES SEVERAL ADVANTAGES OVER PREVIOUS RELEASES INCLUDING:

SUPPORT FOR SHARED SERVICE ACCOUNTING, TAX PAYMENT, AND BANKING FUNCTIONS.

STREAMLINED CLOSE PROCESSES VIA SUPPORT FOR CLOSING INDIVIDUAL SUBLEDGERS AS

RECONCILIATION AND PROCESSES ARE COMPLETED.

GREATER CONTROL AND MONITORING FROM A SINGLE SETUP WITH ORACLE’S RULES-BASED

ACCOUNTING ENGINE.

IMPROVED ABILITY TO INCORPORATE ACCOUNTING INFORMATION FROM EXTERNAL SYSTEMS

AND ENTITIES.

IMPROVED AUDIT TRAILS FOR TRANSACTIONS IN THE GENERAL LEDGER, LINKING BACK TO

THE APPROPRIATE SUBLEDGER AND SOURCE TRANSACTION.

STREAMLINED SUPPORT FOR INTERCOMPANY TRANSACTIONS.

WHILE THESE BENEFITS TYPICALLY LEAD THE INITIAL DISCUSSION ASSOCIATED WITH AN ORACLE EBS R12 UPGRADE, THESE ARE JUST A FEW OF THE BENEFITS ASSOCIATED WITH THAT UPGRADE. THE TABLE BELOW SUMMARIZES THE BENEFITS INTRODUCED BY THE LATEST RELEASE:

IT IS BEYOND THE SCOPE OF THIS DOCUMENT TO IDENTIFY EVERY ENHANCEMENT INTRODUCED IN ORACLE EBS R12. IT IS IMPORTANT, HOWEVER, TO REVIEW THESE BENEFITS AND DISCUSS HOW THEY MAY POSITIVELY IMPACT THE OPERATIONS OF YOUR ORGANIZATION. PLEASE REVIEW THE ORACLE WEBSITE FOR SEVERAL DOCUMENTS INTRODUCING THE ENHANCEMENTS IN R12.

ONCE YOU IDENTIFY THE FUNCTIONALITY THAT WILL IMPACT YOUR ORGANIZATION, THE NEXT STEP IS TO ATTEMPT TO QUANTIFY THE BENEFITS AND DEFINE THE TIMELINE FOR THESE IMPROVEMENTS. AREAS TO BE CONSIDERED INCLUDE:

INCREASED REVENUE OPPORTUNITIES

COST REDUCTION OPPORTUNITIES

IMPROVED SUPPLY CHAIN CONTROL

MANAGEMENT INSIGHT FOR BETTER DECISION MAKING



UNDERSTANDING ORACLE mAINTENANCE SUPPORT LEVELS

ANY DISCUSSION ASSOCIATED WITH AN ORACLE EBS R12 UPGRADE NEEDS TO INCLUDE THE CONSIDERATION OF THE COSTS ASSOCIATED WITH DOING NOTHING. ORACLE’S MAINTENANCE POLICY PROVIDES FOR FIVE YEARS OF PREMIER SUPPORT, FOLLOWED BY THREE YEARS OF EXTENDED SUPPORT FOR EACH RELEASE. AFTER THIS POINT, A RELEASE FALLS INTO A SUSTAINING SUPPORT MODEL.

THE TABLE BELOW IDENTIFIES THE CURRENT MAINTENANCE STATUS OF SOME OF THE RECENT RELEASES:

WHAT BENEFITS ARE PROVIDED FOR EACH LEVEL OF SUPPORT AND HOW DOES THIS IMPACT YOUR ORGANIZATION? THE FOLLOWING TABLE DEFINES THESE BENEFITS:


BY POSTPONING A DECISION TO UPGRADE, ORACLE CUSTOMERS FACE A 20% INCREASE IN THEIR ANNUAL MAINTENANCE COSTS, AND ULTIMATELY THE WITHDRAWAL OF SUPPORT FOR PATCHES AND REGULATORY UPDATES (1099 CHANGES, PAYROLL CHANGES, ETC).

COSTS ASSOCIATED wITH AN ORACLE EBS R12 UPGRADE

UNFORTUNATELY, THERE IS NO WAY TO GENERICALLY ESTIMATE THE COSTS ASSOCIATED WITH THE UPGRADE EFFORT FOR AN R12 PROJECT. EACH ORGANIZATION HAS DIFFERENT FACTORS THAT MAKE THEM UNIQUE FROM ANY OTHER ORACLE EBS ENVIRONMENT. THIS SECTION WILL FOCUS ON THE FACTORS THAT MUST BE EXAMINED IN ORDER TO UNDERSTAND THE COSTS ASSOCIATED WITH AN UPGRADE EFFORT FOR YOUR PARTICULAR ORGANIZATION.

HERE ARE SOME OF THE QUESTIONS THAT YOUR ORGANIZATION MAY NEED TO ADDRESS:

1. WHAT IS THE UPGRADE PATH TO ORACLE EBS R12? THE ANSWER TO THIS QUESTION DEPENDS ON WHAT VERSION YOU ARE CURRENTLY RUNNING. IF YOU ARE ON RELEASE 11.0 - 11.5.8, YOU MUST FIRST UPGRADE TO R11.5.10, AND THEN UPGRADE TO ORACLE EBS R12.1.2. IF YOU ARE RUNNING 11.5.9 - 11.5.10, THERE IS A DIRECT UPGRADE PATH TO R12.1.1. THE COSTS OF A TWO STEP UPGRADE ARE HIGHER THAN A DIRECT UPGRADE.

2. IS THIS TRULY AN UPGRADE TO EBS R12, OR SHOULD A REIMPLEMENTATION APPROACH BE CONSIDERED? THE ANSWERS TO THIS QUESTION DEPENDS ON YOUR ENVIRONMENT AND WHAT CHANGES WILL BE INTRODUCED DURING THE UPGRADE. THE DIAGRAM BELOW ILLUSTRATES SOME OF THE DISCUSSION ITEMS ASSOCIATED WITH THIS DECISION:


3. HOW SHOULD MY ORGANIZATION DEAL WITH THE CUSTOMIZATION INCLUDED IN MY CURRENT ENVIRONMENT? AGAIN, THIS IS A COMPLICATED QUESTION WITH MULTIPLE ANSWERS. IN SOME CASES, CUSTOMIZATIONS MAY NO LONGER BE NECESSARY DUE TO NEW FUNCTIONALITY INTRODUCED IN ORACLE EBS R12. IN OTHER SITUATIONS, THESE CHANGES ARE STILL NEEDED. A GAP ANALYSIS MUST BE PERFORMED TO REVIEW EACH CUSTOMIZATION AND A MIGRATION STRATEGY MUST BE DEVELOPED.

4. HOW WILL INTERFACES TO EXTERNAL APPLICATIONS BE IMPACTED? EACH INTERFACE MUST BE REVIEWED? DEPENDING ON HOW EACH INTERFACE WAS BUILT, ADJUSTMENTS MAY BE NEEDED TO ADDRESS DATABASE SCHEMA CHANGES INTRODUCED IN EBS R12.

5. IF OUR ORGANIZATION HAS MANY CUSTOM REPORTS, WILL THEY MIGRATE? NOT NECESSARILY. IT DEPENDS ON THE TOOLS UTILIZED TO BUILD THESE REPORTS,

AND FROM WHICH FUNCTIONAL AREA THEY ARE REPORTING. LOOK AT THIS PROJECT AS A PERFECT OPPORTUNITY TO REVIEW YOUR ENTIRE REPORTING STRATEGY AND ELIMINATE UNUSED REPORTS, AS WELL AS AN OPPORTUNITY TO ENABLE USERS TO DIGEST INFORMATION USING DIFFERENT PARADIGMS, SUCH AS ORACLE BUSINESS INTELLIGENCE ENTERPRISE EDITION.

6. HOW MUCH TRAINING WILL BE REQUIRED FOR MY END USERS? DON’T UNDERESTIMATE THE NEED FOR TRAINING. AT A MINIMUM, THE USER INTERFACE FOR R12 HAS CHANGED, AND ALL USERS SHOULD BE TRAINED ON THIS NEW INTERFACE. THERE HAVE ALSO BEEN SIGNIFICANT FUNCTIONAL CHANGES INTRODUCED IN CERTAIN MODULES, SUCH AS THE FINANCIAL SUITE. CONSIDER THE USE OF ORACLE USER PRODUCTIVITY KIT (UPK) FOR THE DEVELOPMENT OF NEW TRAINING MATERIALS AND BUSINESS PROCESS PROCEDURES.

7. WHAT IS THE IMPACT OF THE UPGRADE TO OUR ORGANIZATION’S TECHNICAL INFRASTRUCTURE? IN SHORT, AN INFRASTRUCTURE REVIEW SHOULD BE CONDUCTED TO ENSURE ADEQUATE SUPPORT FOR ORACLE EBS R12. EXPECT AN INCREASE IN DISK SPACE REQUIREMENTS AND POTENTIALLY A SERVER UPGRADE, DEPENDING ON THE PERFORMANCE OF YOUR CURRENT ENVIRONMENT.

CONCLUSION

IN TODAY’S ECONOMIC CLIMATE, THE BUILDING OF A BUSINESS CASE WILL OFTEN MAKE THE DIFFERENCE BETWEEN PROJECT ACCEPTANCE AND REJECTION BY YOUR ENTERPRISES EXECUTIVE TEAM. ASSEMBLING THE RIGHT TEAM TO BUILD THE RIGHT BUSINESS CASE WILL BE CRITICAL TO ITS SUCCESS.

FOR INFORMATION REGARDING HOW MSS MAY ASSIST YOUR ORGANIZATION IN THIS IMPORTANT EFFORT, PLEASE CONTACT ERROL RYLAND AT [email protected] OR TOLL FREE AT (877) 677-4636.

ABOUT THE AUTHOR

MR. RYLAND HAD SPENT NEARLY THREE DECADES IN MANAGEMENT CONSULTING AND INFORMATION TECHNOLOGY AND HAS WORKED IN A VARIETY OF INDUSTRIES INCLUDING MANUFACTURING, PUBLIC SECTOR AND SERVICE ORGANIZATIONS. HIS DUTIES ON THESE ENGAGEMENTS INCLUDED PROJECT MANAGEMENT, STRATEGIC PLANNING, SOLUTION PLANNING, SOLUTION ARCHITECTURE AND ENTERPRISE RESOURCE PLANNING LEADERSHIP.

AS A CONSULTING SERVICES MANAGER, ERROL IS RESPONSIBLE FOR PARTNERING WITH CLIENTS TO DEFINE PROJECT SCOPE AND SUPERVISE PROJECT DELIVERY.

ABOUT mSS TECHNOLOGIES

FOR NEARLY THREE DECADES, MSS HAS BEEN SUCCESSFULLY SERVING MID-SIZED TO GLOBAL 2000 COMPANIES. AS A TOP RANKED REGIONAL MANAGEMENT CONSULTING FIRM IN THE WESTERN UNITED STATES, WE PARTNER WITH OUR CLIENTS TO:

EFFECT CHANGE: MSS FACILITATES CLEAR STRATEGIES THAT DRIVE CHANGE WHILE FOSTERING INNOVATION THROUGH AN EXTERNAL PERSPECTIVE.

IMPROVE PERFORMANCE: MSS WORKS WITH OUR CLIENTS TO CREATE EXCELLENCE IN OPERATIONS AND PROCESSES THAT ENABLE MEASUREMENT AND ACCOUNTABILITY WHILE REDUCING RISK AND ENHANCING VALUE CHAINS.

LEVERAGE TECHNOLOGY: MSS FACILITATES THE ALIGNMENT OF TECHNOLOGY FOR BUSINESS ADVANTAGE AND PARTNERS WITH OUR CLIENTS TO IMPLEMENT AND OPTIMIZE CRITICAL BUSINESS SYSTEMS.


AS A MANAGEMENT CONSULTING FIRM WE PROVIDE OUR CUSTOMERS WITH PRODUCTS AND SERVICES THAT IMPROVE THEIR BUSINESS PROCESSES. IN ORDER TO PROVIDE THE BEST TECHNOLOGY SOLUTIONS MSS HAS PARTNERED WITH LEADING TECHNOLOGY PROVIDERS, ORACLE JD EDWARDS, ORACLE E-BUSINESS SUITE, AND IBM COGNOS. OUR SERVICES INCLUDE: MANAGEMENT CONSULTING, STRATEGIC IT PLANNING, BUSINESS PROCESS MANAGEMENT, ENTERPRISE RESOURCES PLANNING SELECTION AND IMPLEMENTATION, CUSTOMER RELATIONSHIP MANAGEMENT, SUPPLY CHAIN MANAGEMENT, BUSINESS INTELLIGENCE AND DATA WAREHOUSING.

MSS IS UNIQUE IN THAT OUR HIGH IMPACT ACCELERATED STRATEGY, ALIGNMENT & PLANNING (ASAP) METHODOLOGY ENABLES MSS TO DELIVER HIGH VALUE, CUSTOM APPROACHES BY DRAWING ON OUR DEEP CROSS-INDUSTRY EXPERTISE AND WORLD CLASS INSIGHT.

AS ILLUSTRATED BELOW, OUR PROVEN ASAP APPROACH ASSISTS ORGANIZATIONS BY BALANCING THE DIFFERENT (AND OFTEN COMPETING) AGENDAS PERMEATING MOST ORGANIZATIONS.


building the business case to upgrade to oracle ebs r12[1]

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