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TRANSCRIPT
Getting to One:Consolidating Multiple Charts of Accounts during an
Oracle E-Business Suite Upgrade to R12
Tuesday, April 20, 2010
10:30 AM - 11:30 AM
Breakers K
Bob Von Der Ahe Director, Global Projects – Experian Global Corporate Systems
Paul Phillips Manager – Oracle EBS Development – CARQUEST Technologies, LLC
Helene Abrams Founder and CEO – eprentise, LLC
2
Session Objectives
• Explore the real reasons companies decide that they
need a single global environment.
• Understand the benefits and ROI of a single instance
and single Chart of Accounts.
• Understand the process, design considerations, and
impact of changing to a global environment.
• Hear stories about the challenges of getting to one
instance and a single chart of accounts.
• Leverage new features in Oracle E-Business Suite R12
that enable and enhance global business.
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Oracle E-Business Suite Customer Trends
Consolidate for operating a shared service center or a centralized data center.
Resolve duplicates and standardize data.
Merge all configuration, master, and transaction data.
Reorganize entities, sets of books, and operating units.
Reduce operating and maintenance costs.
Create a single source of truth.
Enable revenue optimization.
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Experian (LON:EXPN)
• Global information services company.
• Provides data, analytical tools, and marketing services to organizations and consumers to help manage the risk and reward of commercial and financial decisions.
– Known for its comprehensive understanding of individuals, markets, and economies.
– Helps organizations find, develop, and manage customer relationships to make their businesses more profitable.
– Promotes greater financial health and opportunity among consumers by enabling them to understand, manage, and protect their personal information.
• Constituent of the United Kingdom's FTSE 100 index.
• 2009 Revenue $3,821 USD (millions).
• Clients in more than 65 countries.
• 15,000 employees in 40 countries.
• Oracle 12.0 – All Financials, All HR Modules
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CARQUEST
CARQUEST Auto Parts is the premier supplier of
replacement products, accessories, supplies and equipment
for virtually all makes of automobiles, as well as light and
heavy-duty trucks, off-road equipment, buses, recreational
vehicles and agricultural equipment.
Automotive aftermarket is worth more than $250 billion and growing annually
CARQUEST Auto Parts Stores are local, independently owned and operated
businesses with deep roots in their communities – 16,000 teammates
Private Company with 3,000 locations in North America and
43 years in business
CARQUEST Canada extends our network throughout Canada
Oracle 11i - GL, AP, AR, FA, PO, HR, Payroll
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Why Change a Chart of Accounts?
Moving to a single global chart of accounts or a single global instance to operate a shared service center or reduce operational costs
Acquiring another company
Running out of segment values
Changing the reporting requirements
Re-ranging values to allow sequences in formulas, reports
Tracking the business differently
Recording intercompany transactions
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Experian Business Drivers
• April 2008. Business case for Gemstone.
• Reduce IT cost structures: Quantifiable natural savings
– 3 instances: hardware, software, support teams
• Impediment to deployment of standard business processes and new functionality
– Shared service centers
• Enable labor arbitrage
• Establish a singular, centralized team to decide on assignment of ledgers, new account
values, logic for building cross-validation rules
• Enable revenue optimization: Hard to quantify, wide range
– Customers are global
– Many customers span regions
– Global brand Global standard service products
– Global standard data and business intelligence optimization
8
Experian Gemstone Deliverables & Principles
Deliver a global Oracle instance, enhanced reporting capabilities
and global shared services
Establish a single global accounting and HR system with a single
chart of accounts
Agree global processes for Finance and HR
• Establish Global Finance Shared Services organisation;
• Implement integrated reporting, planning and forecasting for Finance and
HR;
• Rationalise legal entities; and
• Optimise tax efficient structures.
Improve access to financial information and decision making support
Standardize processes, controls and SLA’s globally
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CARQUEST Drivers and Design Considerations
• Provide flexibility to facilitate growth and support global
instance
• Utilize standard Oracle functionality for reporting by
aligning balancing segment and cost center segment
with functional purpose
• Facilitate custom report development with
straightforward flexfield design by using each segment
for only one purpose
• Eliminate unused and obsolete segments
• Eliminate alpha data types
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Key Dimensions of a Global Chart of Accounts
History – Why were there multiple charts of accounts in
the first place?
Obstacle to waving a magic wand and changing to single
COA?
Eliminate need for downstream Hyperion or other
financial reporting tool?
R12 considerations?
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Considerations for Defining a Global Chart of Accounts
• Understand your Business Reporting Needs
– Operational
– Statutory and regulatory requirements
– Management reporting
– External financial reporting
– Profitability by customer and by product
• Team members in design process should be functionally aligned as opposed to geographically aligned
• Design flexibility for future changes
– Leave room between values to insert new values and ranges of values
– Each segment should have one single logical and clearly-defined purpose
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Design Issues and Resolution
What issues did you encounter?
How did you decide and bargain within the organization?
What compromises did you have to make, and why?
Who participated in the design?
Any outside consultants or accounting firms?
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Flexfield Components
Company Business
Unit
Cost
Center
Region Account
01 100 150 East 1111
02 100 210 West 2222
Example Structure
Segments, Values, Code Combinations
Segments
Values
01.100.150.East.1111 Code Combination
In Oracle E-Business Suite,
Chart of Accounts = Accounting Flexfield
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Flexfields in the Form
Flexfields customize Oracle E-Business Suite to track the financials the way you want.
Accounting Key Flexfield
Code Combinations
Value Descriptions
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Experian Before and After COAs
Unify COA v.3
Company
Country
Business Unit
Cost Centre
Account
Sub-Account
Sub-Analysis
Intercompany
Convergence, 2010 January 2010 June
Unify COA v.1
Company
Cost Centre
Account
Sub-Account
Project
Intercompany
Unify COA v.2
Company
Country
Business Unit
Cost Centre
Account
Sub-Account
Sub-Analysis
Intercompany
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CARQUEST Before and After COAs
COA v.2
Location (6)
Department (5)
Natural Account (10)
Sub Account (6)
Project (6)
Future 1 (6)
Future 2 (6)
COA v.1
Location (6)
Cost Center (5)
Natural Account (6)
Sub Account (6)
Project (5)
Future 1 (5)
Future 2 (5)
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COA Consolidation Process
• Who did what when?
• How were the global COA values finalized?
• What were the lessons learned?
• What advice do you have for others going through the
COA change process?
• What needed to be done with or for business users in
transition to a single COA?
• What design considerations do you have for others going
to a single COA?
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Experian - Diamond Road Map
Unify – 11i
• Spain and
Hong
Kong
COA v.1
• Europe
COA v.2
COA v.2Unify – R12
• Europe,
Spain and
Hong
Kong
COA v.2
• US and
UK Global
COA v.3
R12
Upgrade
January 2009
FlexField
Europe
June 2010
Unify – R12
• Spain and
Hong
Kong
COA v.1
• Europe
COA v.2
UK – 11i
UK COA
US – 11i
US COA
UK “Open”
Custom
Extract &
Transform
Scripts II
US “Open”
Custom
Extract &
Transform
Scripts I
Unify – R12
Europe,
Spain and
Hong Kong
COA v.2
FlexField
HK & Spain
September 2009
Convergence
January 2010
Unify – R12
All
Countries
and
Regions
Global COA
v.3
Global
COA v.3
History
Europe
Spain
Hong Kong
UK
US
History
US
History
UK
History
Europe
Spain
Hong Kong
UK – 11i
UK COA
US – 11i
US COAHistory
US
History
UK
January, 2009 June, 2010
Parts of COA Change Project Not Done by FlexField
• Objects where references to Accounts are Hard-Coded
– Interfaces
– Data Warehouse
– Reports
• Any objects that use Ranges of Accounts
– Approval Assignments
– Budget Assignments
• Rules that drive business logic based on Accounts
– Cross Validation
– Consolidation
– Account Derivation Rules
– Accounting Generator
– Roll-up Groups
– Security Groups
– Summary Templates
– Mass Allocations
– Costing and Revenue Recognition Rules
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R12 Preparation
Drill down detail
Statutory and regulatory reporting requirements
IFRS
Global visibility with local compliance
Subledger accounting with simultaneous accounting for all entities
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R12- Global Financial Management
Analytics
Transaction Entry
Accounting & Tax
Audit, Reconciliation
& Drilldown
XML Publisher Reporting
Operations in US, UK, France Simultaneous
Accounting for All
Entities
While Ensuring
Corporate
Visibility & Local
Compliance
Global Visibility, Auditability, and Control
US GAAP
• Global COA
• US Calendar
• $
US GAAP
• Global COA
• US Calendar
• £
US GAAP
• Global COA
• US Calendar
• €
French IAS
• Global COA• French Calendar
• €
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Define Legal
Entities &
Associated
Rules
Set Accounting
Rules for All EBS
Apps
Define Multiple
Ledgers for
Rules and
Currencies
Ensure Complete
& Accurate Setup
via Online
Checklist
You Define the Rules
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Lessons Learned
• Understand the overall business reasons and metrics for making the changes. Keep focus and momentum.
• Single COA
– Usually not difficult to design
– May take time to decide on account values
– Global organizations need a strong central group to control creation of account values and descriptions
• Steps to Single COA
– Enlist sponsor and organizational cooperation
– Plan well when there are multiple instances and COAs
– Run the conversion
• Users were able to find misclassified accounts easier
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Results
Both CARQUEST and Experian projects went to successful completion precisely because they had top executives outside IT who were engaged and had a stake in seeing the projects through.
Even though only on v2 of their COA, Experian has achieved an estimated $2m in savings due to reductions in audit fees and finance costs as well a procurement savings.
Less maintenance for third-party systems
Common reporting (development and maintenance cost reductions)
Common security, cross-validation rules
Common hierarchies (reduced maintenance, fewer people to design)
Common, shorter close cycle
More visibility across organization
Common training for the entire organization
Questions?
Thank You!
Bob Von Der Ahe Experian Global Corporate Systems
Paul Phillips CARQUEST Technologies, LLC
Helene Abrams eprentise, LLC [email protected]