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DPRO-89774Daniel B. Stang, Gerald Arcuri

Product Report5 November 2002

Oracle Financial Management Applications

Summary

ERP II vendor Oracle is adding collaboration to its E-Business Suite, complementing the accounting,financial and cash management, consolidation, asset control and analysis features of Oracle Financials.

Table of Contents

Overview

Analysis

Pricing

Competitors

Strengths

Limitations

Insight

List Of Tables

Table 1: Features and Functions: Oracle Financials

Table 2: Features and Functions: Oracle GL, Consolidation, Analyzer, Budgets, Payables and ReceivablesApplications

Table 3: Features and Functions: Oracle Assets, Asset and Cash Management, and Treasury Applications

Table 4: Features and Functions: Oracle Property Management, Collections, and Project Cost andAccounting Applications

Table 5: Features and Functions: Oracle Customer, Enterprise Tax, Self-Service and E-commerceGateway Applications

Table 6: Features and Functions: Oracle Financial Intelligence, ABM and Analytics Applications

Table 7: Price List: Oracle Financials Applications


© 2002 Gartner, Inc. and/or its Affiliates. All Rights Reserved.DPRO-897745 November 2002 2

Corporate Headquarters

Oracle

500 Oracle Parkway

Redwood Shores, CA 94065, U.S.A.

Tel: +1 650 506 7000

Fax: +1 650 506 7200

Internet: www.oracle.com

Overview

Oracle Financials, part of the vendor’s E-Business Suite, provides financial management and accountingfunctions for midsize and large enterprises in private and public sectors, and includes multinationalsupport for global companies. Oracle traditionally targets large, multinational corporations but, like someother large enterprise ERP II players, moved down market to also target midsize companies. ItsFastForward Solutions implementation methodology is designed to speed Oracle applicationimplementations at a fixed cost. The solution can be developed and delivered on a hosted environment(Oracle.com) or through traditional on-site deployments. Oracle’s applications are based on a global,Internet-friendly computing platform, featuring applications supporting specific local financial andaccounting regulations.


Specifications

Platform Support • Apple Macintosh OS (client only).

• Compaq Tru64 UNIX (Digital Unix).

• Fujitsu PRIMEPOWER (GP7000F) (same code as Solaris).

• HP 9000 Series HP-UX.

• IBM RS/6000 Advanced Interactive Executive (AIX).

• Intel-Based Server Linux.

• MS Windows NT/2000 Server.

• Sun Scalable Processor Architecture (SPARC) Solaris.

Databases A runtime version of an Oracle8i or Oracle9i database.

Current Release 11.5.

Date of Current

Release

June 2002.




Specifications

General Suite Functions

Account Structures Users can define unlimited account structures online.

Account structures can include up to 30 segments and up to 25 characters per

segment, balancing segments, dependent segments, numeric segments,

alphanumeric segments, customizable user prompts and shorthand account aliases.

Users can define multiple organizations, including unlimited organization structures,

unlimited levels, simple reorganization and multiple hierarchy rollups.

Users can create and maintain account hierarchies using a drag-and-drop graphical

interface. Results are reflected in the organization structure, financial statements

and internal reports.

Users can define an accounting calendar, using up to 366 periods, uneven periods,

adjustment periods and multiple calendars.

Users can add custom data fields without programming.

Automatically consolidates disparate account structures, regardless of calendar or

currency.

Journal Entry Users can perform the following functions for journal entry:

• Enter optional control totals.

• Create summary accounts.

• Create statistical accounts.

• Import data from feeder systems in any currency.

• Use automatic journal balancing.

• Create suspense accounts.

• Enter journals in any period (that is, prior period, prior year and future periods).

• Control accounting periods (multiple open periods, reopen periods, permanently

close periods).

• Post automatically at scheduled times or in real time.

• Perform year-end close automatically.

• Oracle General Ledger (GL) handles intercompany accounting, skeleton journals,

standard journals, formula journals and statistical journals.

Cost Accounting Users can perform the following functions for cost accounting:

Allocations of actual balances, average balances, budget balances, encumbrance

balances.

Statistics-based cost accounting.

Formula-based cost accounting, using statistics, fixed-amount, period-to-date,

quarter-to-date, year-to-date, average-to-date and unlimited nesting.



Table 2: Features and Functions: Oracle GL, Consolidation, Analyzer, Budgets,Payables and Receivables Applications

General Ledger

A central repository of accounting data, receiving transactions from Oracle and non-

Oracle sub-ledgers.

Maintains financial balances, including actual, budget, summary, foreign currency,

statistical, and average balances, in one balanced ledger.

Synchronizes journals, detail balances, and summary balances using a posting

process.

Budgetary Controls Budgetary controls include top-down, bottom-up or middle-out budgeting.

Users can upload budgets from a spreadsheet or automatically create them using

budget formulas.

Budgets can be password-protected and limits can be set for each department.

Currency Support Supports currency conversion, translation and revaluation in accordance with

Generally Accepted Accounting Principles (GAAP) and international accounting

standards.

Current/noncurrent, monetary/nonmonetary, or current-rate methods of translating

balance sheet accounts can be used.

To address revaluation of foreign currency gains or losses for companies using

Multiple Reporting Currencies functions, the GL automatically converts revaluation

journal entries from the primary set of books to the corporation’s reporting set or

sets of books.

Allocation Provides AutoAllocation sets to automate journal batch creation and posting to

recurring journals, allocations, budgets, and encumbrances.

Supports step-down allocations creating journal batches in a specific order so

posted results of one step are used in the next step.

Users can be notified of AutoAllocation results.

Journal Entry Supports a variety of journal entries, including allocation, recurring, reversing,

statistical, foreign currency, skeleton and manual journal entries.

A customizable approval hierarchy routes journals exceeding spending limits to the

appropriate approver before posting.

Journal automation features allow automatic journal creation, posting, and reversals

via user-defined schedule.

A workflow process management scheme supports common business processes,

including sub-ledger transaction importing, revaluation, translation, and period

closing.

Account Hierarchy

Manager

Provides a graphical user-interface for manipulating chart of accounts structures

and hierarchies.

Supports time-based reporting or the ability to report the same financial data against

multiple independent hierarchies.

Can also create hierarchies showing different views of the company.

Financial Analyzer

Integration

Integrates with the Oracle Financial Analyzer to provide analysis, modeling, and

forecasting capabilities based on data in the GL.

Actual data can be extracted from the GL into Financial Analyzer, and budget data

can be created, manipulated and exported back into the original GL.




General Ledger

Global Consolidation System

A multisource financial consolidation tool providing financial controls and strategic

financial information.

Accumulates data from diverse financial systems and geographic locations,

including both Oracle and non-Oracle modules residing on the same or different

application instances.

Consolidates data into detail or summary views for standard and average balances

from data in charts of accounts, calendars, currencies, other sources and levels of

detail.

A user interface incorporates workflow concepts leading users through each task in

the multistep consolidation process.

The Consolidation Hierarchy Viewer displays multilevel consolidation structures in

an expandable hierarchical format.

Integrates with Financial Statement Generator reporting functionality.

Integrates with Oracle GL and subledgers to enable drilling from consolidated

balances to subsidiary balances and journal details, even if the subsidiary’s

accounts are maintained in a separate set of books.

Provides direct integration with Oracle Financial Analyzer (OFA), Oracle’s online

analytical processing (OLAP), application enabling users to analyze, model, forecast

and report on data stored in Global Consolidation System (GCS) without additional

data entry or account maintenance.

Financial Analyzer

Provides a tool for financial reporting, analysis, budgeting and planning.

Features include:

• Distributed planning and forecasting.

• Reporting and analysis via client/server, Web and Oracle Portal platforms.

• Financial modeling.

• Structure and data integration with the GL with flexible data loading from other

Oracle and non-Oracle sources.

• Adaptable and extendable business model allowing corporate control of standard

models with local extensions by users.




General Ledger

Budgets

A Web-enabled budgeting and analysis environment.

An Internet interface allows users to prepare, review and approve budgets securely.

Provides a self-service interface.

A role-based architecture supports the specific needs of different budget users.

Data entry features enable budget entry (for example, incorporate standard budget

items, repeating).

Allows users to plan for special projects.

Calculates budgeted amounts from pre-defined or user-defined formulas.

Performs line-item and position budget adjustments throughout the current year.

Manages data from a central location.

Allows special review groups to review and approve special budgets items outside

of the normal organization hierarchy.

Data can be moved between relational and multidimensional databases via Oracle

Financial Analyzer integration.

Incorporates Strategic Planning into overall budget development.

Position budgeting application programming interfaces (APIs) are available for

integrating with third-party Human Resources (HR) systems.

Actual position costing data is available from Oracle Labor Distribution.




General Ledger

Payables

Supports the procure-to-pay process while providing financial controls and strategic

financial information.

Supports automated scheduling of the invoicing-through-payment processing cycle.

Receives electronic invoices via standard electronic data interchange (EDI),

Extensible Markup Language (XML) messages, evaluated receipt settlement (ERS)

and business-to-business (B2B) e-commerce.

Integrated with Oracle iSupplier Portal, allowing suppliers to submit invoices online

via the Web. Suppliers can inquire on invoice and payment status.

Creates recurring payments.

Workflow processes enforce approvals and business rules.

Performs two-, three- and four-way purchase order (PO) matching.

Attaches nonstructured data to invoice transactions (for example, images,

spreadsheets, documents).

Routes procurement card transactions to specific card holders for approval, and

generates invoices to pay the card provider.

Integrates with Oracle’s Property Manager to automatically receive and pay

approved property lease payments.

Provides support for global financial operations, including multiple-currency

representations, euro, global tax, sequence numbering and future dated payments.

Supports sales, use, partially recoverable and nonrecoverable value-added tax

(VAT), withholding tax, and income tax (United States 1099) processing and

reporting.

Captures VAT detail on expense report receipts to support the reclamation of VAT.

Integrates with Oracle Cash Management and Treasury to provide cash forecasting.

Produces payments via industry-standard EDI, XML messages and other formats

and automatically transmits to banking partners. Automatically receives confirmation

files and bank statements from banking partners.

Receivables

Provides public APIs for real-time creation of credit memos, adjustments, receipts

and receipt applications, revenue adjustments and Bills Receivables.

Provides self-service receivables functions through iReceivables.

Supports cross-currency and multilingual capabilities.

Accounting Controls Supports cash basis or accrual accounting.

Can transfer accounting activity to the GL at any time in summary or detail.

Supports user-defined rules for automatic derivation of accounting for receivables,

revenue, tax and freight.

Transaction

Processing

Supports invoice, debit memo, credit memo, deposit and guarantee transactions.

Provides an open interface (AutoInvoice) for batch import of transactions and

provides access and correction of AutoInvoice exceptions.

Supports creation of recurring invoices, consolidated billing invoices, full and partial

credit memos, automatic sales credit reversal and on-account credit.




General Ledger

Collections Users can define aging buckets and drill down to detail by aging bucket.

Users can print customer statements with centralized statement sites.

Handles items on dispute, renegotiation of due dates, assessment of finance

charges and recording of customer calls.

Credit Memo

Request Workflow

Users can create Web and e-mail notifications for approvers, collectors and

receivables professionals.

Uses management- or user-defined hierarchies for approval workflow.

Cash Applications Supports automatic receipts processing for Lockbox transmission, bill of exchange,

direct debit, prepayments, Automated Clearing House (ACH), purchase cards and

credit cards.

Provides receipt matching by multiple and custom sources.

Supports cross-currency receipts as well as adjustments of exchange rates.

Bills Receivable Users can record customer acceptance of a bill, endorse a bill, manage risk

associated with factored bills, mark a bill as unpaid or protested, cancel a bill, recall

a bill from a remittance batch, exchange one bill for another, place or remove a bill

on hold, view details on the bill (including the current status) and view the life cycle

of events for each bill.

Supports individual creation, direct exchange of completed invoices and automatic

batch creation of bills receivable.

Deductions

Management

Integrates with Oracle Trade Management for claim investigation and resolution.

Supports invoice short payment, general receipt short payments and overpayments.

Supports resolution of claims with chargebacks, credit memos and receipt write-offs.

Enterprise Tax Provides a flexible, user-definable tax reporting ledger.

Integrates with Taxware and Vertex sales tax vendors.

Supports compounding tax, tax exemptions and exceptions.

Customers Integrates with Dun and Bradstreet for in-depth customer financial and credit data.

A Mobile Customer Directory enables users to look up basic customer information,

such as contact names, location information, phone numbers and e-mail addresses.

Reporting Provides user-configurable Receivables reports.

Reports can be published in American Standard Code for Information Interchange

(ASCII) Text, comma-separated value (CSV), HTML or tab-delimited formats.

Table 3: Features and Functions: Oracle Assets, Asset and Cash Management, andTreasury Applications

Assets

Manages financial accounting and maintenance of fixed assets.

Supports euro asset accounting and multicurrencies.

Asset Tracking Tracks assets shared by multiple companies, cost centers and employees, as well

as assets distributed across various locations.

Capitalizes Construction-In-Progress assets from project accounting. Supports drill-

down to projects for tracking of cost components.

Tracks nondepreciating assets, including expensed asset items, real estate and

assets acquired under operating leases.




Assets

Financial and Tax

Reporting

Supports U.S. tax reporting:

• Form 4562 and adjusted Form 4562 (Depreciation & Amortization).

• Form 4626 (AMT Detail).

• Form 4797 (Gain From Disposition of 1245/1250 Property).

• Form 4797 (Ordinary Gains and Losses).

• Form 4797 (Sales or Exchanges of Property).

Supports U.S. and global depreciation methods, such as Accelerated Cost

Recovery System (ACRS), Modified Accelerated Cost Recovery System (MACRS),

Alternative Minimum Tax (AMT), Japan declining-balance, Spain digressive-quotas,

bonus depreciation, flat rate, units-of-production, Diminishing Value, Straight-line

and sum-of-years digits.

Integrates with external property tax programs.

Leasing and

Maintenance

Complies with Financial Accounting Standards Board (FASB) 13 guidelines on

capitalized and operating leases.

Provides amortization schedules based on implicit interest rates or borrowing rates.

Schedules periodic maintenance events, records service costs and uses e-mail to

notify employees about upcoming maintenance events.

Enterprise Asset Management (EAM)

Monitors operational data, such as maintenance history, performance trends, meter

readings and operating conditions.

Helps users manage available resources, such as inventory, equipment and skilled

personnel, matching these assets to asset maintenance demand.

Supports facilities management for the Oracle Real Estate application by providing

integration with Oracle Property Manager and a Self-Service Work Request for

tenants.

Cash Management

Manages liquidity and cash control.

Cash Forecasting Forecasts in different currencies, across different organizations, for multiple time

periods.

Analyzes cash requirements and currency exposure with expected cash flows from

the GL, Receivables, Order Management, Payables, Payroll, Projects, Purchasing,

Sales, Treasury and external systems on local and remote databases.

Bank Account

Management

Records and reconciles bank statements with system transactions, including:

• Payments in Oracle Payables and Payroll.

• Receipts in Oracle Receivables.

• Settlements in Oracle Treasury.

• Journal entries in Oracle GL.

• Payments and receipts from external systems.

Treasury

Manages global treasury operations.




Assets

Position

Management

Monitors liquidity, currency and interest rate positions with a view of treasury cash

flows, operational cash flows and available funds.

Records fund transfers between bank accounts.

Deal Capture Provides support for foreign exchange (spots, forwards, swaps, options), physical

money market (bills, bonds, short-term funding, term loans, mortgages) and

derivative money market (forward rate agreements, interest rate swaps, interest rate

options, bond options and interest rate swap options).

Straight-through processing supported via open interfaces.

In-house Banking Consolidates global cash and foreign exchange requirements by collaborating with

subsidiaries.

Provides intercompany funding, with interest rates reflecting fair cost of funding.

Supports group bank accounts for cash pooling/interest compensation.

Policies and Control Monitors contract exposure limits in real time by company, counter party, counter

party group, daily settlement, country, currency and dealer.

Defines interest rate and currency policies to control risks to adverse market

movements.

Deal Administration Authorizes deals prior to confirmation and settlement.

Generates confirmations to counterparties based on user-defined layouts, and

generates payment instructions for settlement.

Calculates market-to-market revaluation.

Risk Management Calculates prices and sensitivities of financial instruments.

Portfolio analysis includes positions, maturity profile and interest rate gap.

Table 4: Features and Functions: Oracle Property Management, Collections, andProject Cost and Accounting Applications

Property Manager

Designed to analyze and control real estate finances, improve payment and billing

processes, automate administration of leases, manage space assignment and

optimize space utilization.

Manages properties and land by allowing users to define the attributes of buildings,

land, floors, parcel, suites and individual office units.

Shares data with computer-aided design (CAD) drawings for viewing floor plans,

space utilization and other area information.

A lease workbench allows users to abstract important terms and clauses from the

lease and organize them for quick reference. Every change to a lease is tracked for

reference and audit purposes.

Provides a Mobile Contact Directory allowing real estate and facilities managers to

communicate with service contractors and other property management contacts.




Property Manager

Collections

An expansion of the collections function in Receivables designed for collections

agents and managers, account managers and revenue management personnel

responsible for resolving delinquencies and recovering outstanding debt from

customers.

Queue management is enhanced to support call center collections.

Provides detailed call and payment histories, automated customer scoring and

dunning processes, and streamlined payment processing.

Packaged with other Oracle E-Business suite applications to provide a collections

solution featuring Receivables, iReceivables, iPayment, Interaction Center Suite,

Marketing Online and Discoverer, TeleSales, TeleService and Contracts modules.

Collections

Automation

Automates the collections process from delinquency identification to follow-up task

assignments.

Payment Processing Supports real-time authorization of payments via credit card or bank electronic

funds transfer (EFT).

Supports promises-to-pay for delinquent invoices, including amounts, payment

methods and dates.

Histories and Notes Captures histories and notes for delinquencies.

Global Functionality

Global Accounting

Engine

Supports accounting and fiscal audit requirements for global companies.

Provides rule sets for different countries and methods, so organizations can choose

the correct accounting method for each set of books, such as International

Accounting Standards Committee (IASC), Counseil National de la Compatibilite

(CNC) or Codice Civil.

A subledger accounting system accounts each transaction in its subledger or

accepts a subledger journal voucher as required.

Provides an audit trail for legal and fiscal authorities.

Global Consolidation

System

A consolidation tool aggregating financial data from systems integrated with the

operational accounting system or disparate systems. The systems can reside on the

same or different applications instances.

Consolidates detail or summary financial data, and average or standard balances

based on any calendar period, currency or chart of accounts.

Global Financial

Applications

Provides local and regional functionality supporting 44 different countries in 30

languages (Icelandic was recently added).

Multinational capabilities include multilingual support for external documents,

multiple date formats and multiple currencies.




Property Manager

Global Intercompany

System (GIS)

Designed to balance intercompany accounts across companies on the same or

different applications instances.

Can be used to trade intercompany transactions online, even if the trading partners

do not share a standard chart of accounts, calendar or currency.

Oracle Workflow technology notifies senders and receivers of the status of their

intercompany transactions.

Converts transaction amounts posted in a currency different from the functional

currency defined for a set of books. Conversion is based on the currency exchange

rates defined in the central GIS system.

Multiple Currency

Reporting

Allows companies to manage multicurrency transactions and analysis if financial

results are in currencies other than the primary functional currency of the financial

system.

Supports ledger functions in the primary and reporting sets of books, including

journal entry, revaluation, translation, consolidation, inquiry and reporting.

Multiple Currency

Accounting

Users can perform the following functions:

Enter transactions and report in any supported currency.

Enter exchange rates online or through an automated data feed.

Convert currencies.

Translate actual, budget and average balances.

Use daily, period-end, historical and weighted average rates.

Comply with GAAP.

Record translation gains and losses.

Calculate unrealized gains and losses.

Perform re-measurement and revaluation.

Project Costing

A cost management application for projects and activities planned and tracked

within the enterprise.

Shares transactions in Oracle Payables, Receivables, Purchasing, Manufacturing

and Inventory.

Project-related requisitions are shared with Oracle iProcurement.

Supports unlimited work breakdown structures (WBSs), project types and project

statuses.

Project Billing

Designed to simplify client invoicing, improve cash flow and measure the profitability

of enterprise contract projects.

Project Resource Management

Manages human resource deployment and capacity for project work, including

resource requirements, profitability and organization utilization.

Supports global resource deployment via multilanguage, multicurrency model.

Staffing functions and security are grouped by role.

Automated intercompany, burdened costs, transfer pricing and international

compliance requirements are supported.




Property Manager

Project Contracts

A contract management application for government contractors, commercial

contractors, professional services firms and government agencies.

The Bid and Proposal phase is tied to award/execution.

Contract Document authoring capability includes

Solicitations/Proposals/Modifications/Subcontracts.

Funding capability is supported at Accounting Classification Reference Numbers

(ACRN)/Funding Pool levels.

Table 5: Features and Functions: Oracle Customer, Enterprise Tax, Self-Service andE-commerce Gateway Applications

Customers Online

Provides a comprehensive view into a central repository of customer data and offers

specific functionality for the “data librarian” role of maintaining the integrity and

quality of the customer database.

Provides core customer information, contacts and relationships, notes, and

interactions. Also provides a view of customer campaigns, events, leads,

opportunities, orders, invoices, service requests and installed base (from Oracle

Applications).

A customer segmentation algorithm classifies person and organization records

based on configurable classification schemes.

A visualization applet viewer offers navigation through customer records and related

relationships directly to a customer overview page.

Data Librarian

Option

Provides functions to consolidate and otherwise manage customer data.

Users can identify and merge duplicate customer party records with their

corresponding profile, address, relationship, contact, account and transactional

information.




Customers Online

Enterprise Tax

Supports the following tax types:

• Value-Added Tax (VAT).

• Recoverable and Nonrecoverable Input Taxes.

• European Union (EU) Acquisition and Reverse Charge Taxes.

• Deferred Output Taxes.

• Withholding Taxes.

• U.S. State and Local Taxes.

• Canadian Government, Provincial and Harmonized Sales Taxes.

• Sales Equalization Taxes.

• Excise Duties.

• Latin American Tax regimes (Brazilian Tax on the Circulation of Goods, Interstate

and Intercity Transportation and Communication Services, even when the Operation

is Initiated Abroad [ICMS], Sobre Produtos Industrializados [IPI], Tributary

Substitution, Argentine VAT perception, Turnover perception, Colombian VAT).

Provides a U.S. Sales Tax Partner Solution with Vertex Quantum and the Taxware

Sales/Use Tax System. Each of the partner applications calculates and reports

complex taxes.

Self-Service Applications

Internet Expenses A travel and expense (T&E) management application.

Entered expense data is routed for approval and sent to accounts payable for

reimbursement to the employee.

Workflow processes can be configured to support specific business needs.

Business rules can be enforced online via policy compliance rules engine. Oracle

Workflow provides notifications awaiting attention to specific end users via standard

e-mail system or Web browser. If there is no response or a report is rejected, the

employee is notified and given options for the next action.

Mobile Expenses allows users to create, edit, submit and review expense reports,

as well as view payment and approval status, using a wireless Web-enabled mobile

device, such as a Web-enabled phone, a pager or a personal digital assistant

(PDA). The Expense reports are routed through the same processes, regardless of

device used.

Managers can approve or reject expense reports via mobile device or browser.

Internet Time Integrated with Projects.

Supports collection of project-related labor.

Time cards can be approved automatically or routed for approval.

Change and Late Audit feature captures changes when editing a saved time card,

captures late entries and can require justification, complying with certain Defense

Contract Audit Agency (DCAA) regulations.

Supports connected (via Web) and disconnected (via Excel) modes.




Customers Online

iReceivables A Web-based bill presentment and account management application, allowing a

company’s customers to perform inquiries, dispute bills, pay invoices and review

account balances—all online.

Bill disputes are automatically routed and processed via Oracle Workflow.

Includes a configurable home page, which displays to the users their own account

summary, listings of disputes and alerts for available invoice discounts.

Mobile Financials Supports wireless Web-enabled mobile devices, such as Web-enabled phones,

pagers or PDAs.

Mobile Accounts allows users to view their Receivables account summary, credit

information, aging and recent activity, as well as drill down to view details of a

specific transaction or pay bills.

Mobile Customer Directory enables users to look up basic customer information,

such as contact names, locations, phone numbers and e-mail addresses.

Property Manager Mobile Contact Directory allows real estate and facilities

managers to communicate with service contractors and other property management

contacts.

E-Commerce Gateway

Provides integration supporting e-business with supply chain partners and tools

used to configure the integration environments, define business rules and manage

process exceptions.

Integration environment can be configured at the system, transaction, trading

partner or process levels, allowing organizations to control levels of access.

Supports EDI processing via third-party partnerships with EDI translation vendors.

Three transaction processing options are supported:

• Event-driven processing—used for time-critical business transactions.

• Schedule-based processing—appropriate for less critical business transactions.

• User-defined processing.

Table 6: Features and Functions: Oracle Financial Intelligence, ABM and AnalyticsApplications

Financial Intelligence

Decision-support applications provided as part of Oracle’s Business Intelligence

analytic software.

Includes access to the Oracle database, as well as to a suite of reporting tools.

Includes standard, pre-configured reports.

Reports can be run as scheduled or on an ad hoc basis.

Oracle Discoverer provides a data query and analytical reporting tool for creating ad

hoc queries and reports.

Pre-built Web reports contain analyses of performance measures, allowing users to

compare business measures against key performance indicators (KPIs).





Report Manager Provides access to Web-based versions of financial reports.

Publishes all Financial Statement reports into the database for access from the

Oracle Business Intelligence System home page.

Reporting

Capabilities

Allow users to do the following:

• Define reports for balance sheets, income statements and expense analysis.

• Perform operational reporting within a spreadsheet (create report definitions,

execute and monitor financial statements, review results).

• Create exception reports.

• Run standard reports for trial balances, account analysis and journals.

• Produce spreadsheet-ready reports in tab-delimited format.

• Review reports online.

• Submit ad hoc reports.

• Group reports in a report set and generate all related reports in a single

submission.

• Perform drill-down inquiries (summary accounts, detail accounts, journal entries,

funds available, converted currencies, translated currencies and budget to actual

variance calculations).

• Perform cross-product drilldown from GL balances and journal entries to the

originating subledger transactions (for example, invoices in payables to POs in

purchasing).

• Publish to the Web via Cool Publishing option.

Activity-Based Management (ABM)

Provides flexible cost modeling for aligning costs to the products, services or

customer segments consuming resources.

Flexible modeling allows profitability analysis. Users analyze the segmented data to

determine appropriate product mix or to make outsourcing decisions.

Modeling capabilities help users determine accurate pricing based on metrics

specific to a bid or anticipated sales volume.

Imports revenue data and displays profitability metrics using prepackaged ABM

Intelligence. Through integration with Oracle Performance Analyzer, activity rate

data is combined with customer-specific transaction data providing profitability

analysis.

Oracle Performance Analyzer creates a profit and loss statement for each customer.

Includes “what-if” analysis to produce different costing scenarios. With versioning

options for bill types, activity rate sets and mapping rule sets, users can formulate

different cost assignment scenarios, mix-and-match cost drivers, and assign

alternate product cost structures. Data can be stored in data sets representing

different time buckets and modeling scenarios.





Performance Analyzer

Provides tools for developing profit and performance measures at levels required by

the organization. Institutions can be analyzed from multiple points of view, including

customer, geography, product, channel, business unit or account.

Integrated with Activity-Based Management, customer-specific transaction data is

combined with activity-rate data providing profitability analysis.

Derives customer and household value indexes, profit rankings percentiles and

integration with trading partner data architectures used with Oracle’s customer sales

and service applications.

Balanced Scorecard

Translates corporate directives and strategies into KPIs.

Measures KPI results using data from Oracle Financials and other ERP systems,

and illustrates cause-and-effect relationships between KPIs.

Supports up to four threshold levels per KPI, allowing for escalating alerts and

automated notifications.

Desktop Integrator

Tool extending Oracle applications to the desktop, offering full-cycle accounting and

asset management applications within an Excel spreadsheet.

Journal entries, budget amounts, assets and physical inventory lines can be entered

into the spreadsheet and uploaded to the GL or Asset Management application.

Analysis

Oracle’s Financial Management application strategy is focused on three main areas:

• Consolidation of business processes and business information—including language consolidation tosupport multinational environments and consolidation of Oracle’s Parallel Server for use inapplication clusters to centralize business information via deployment of fewer database instances.

• Self-service and shared services—Self-service functions are available for intra- and interenterpriseuse for employees, customers and suppliers. Shared services use Web-based technology andlanguage support to help enterprises perform business functions globally.

• Business Intelligence—Oracle’s Daily Business Intelligence application provides real-time metricsfrom Oracle applications and can be viewed via Web browser.

Oracle: ERP II Vendor

Oracle extends its status as a seasoned ERP vendor and is becoming an important player in the ERP IIspace by enabling enterprises to integrate their domain-specific operational and financial processes in acollaborative environment within the enterprise as well as with external partners. As provider of anenterprise application suite, Oracle is targeting potential customers in all four ERP II domains(professional services, discrete manufacturing, process manufacturing and asset-intensive) and isfocused on providing functional support for selected specific vertical industries, although it is not yetparticularly strong in its vertical market focus.



ERP II Asset Intensive Vendor

Industries in this domain include utilities companies, such as electric, gas and water; transportation; andtelecommunications. Although Oracle targets many enterprises in this domain, it has not yet developeddetailed functions for specific enterprises. In general, an EAM application within Oracle’s Financialsportfolio supports asset-intensive industries relying heavily on asset maintenance systems.

Multinational Support

Oracle Financials supports local and regional functionality for 44 countries in 30 languages and in multiplecurrencies. The GL includes support for multiple currencies, currency conversion, revaluation andtranslation in accordance with standard accounting practices. The GL also provides a structure forreporting detailed strategic financial data and includes balance-level tracking of multicurrency amounts, aswell as a Multiple Reporting Currencies feature allowing customers to view and report on transaction-leveldetail in different currencies. The GL’s revaluation program allows optional tracking of foreign currencyunrealized gains or losses by cost center in addition to the balancing segment, allowing organizations tosee the impact of exchange rate differences during revaluation on a company-by-company or cost-center-by-cost-center basis. The Global Accounting Engine includes a multiple-posting capability, allowing usersto post accounting transactions to multiple sets of books and to choose to assign different accountingrules to each set of books using the Global Accounting Engine subledger. Oracle also provides euromigration support in Oracle Financials, adding tools for initializing euro sets of books using the MultipleReporting Currencies (MRC). Other tools allow companies to create euro accounting values for existingsubledger transactions. Users can adopt the euro as the functional currency via Euro as FunctionalCurrency (EFC) Migration Utilities.

Financial Planning

Oracle’s GL includes a flexible chart of accounts, accounting calendar and the Application DesktopIntegrator (ADI), which provides desktop integration during each phase of the accounting cycle. Users cancreate budgets, record transactions, and create and run financial statements within the spreadsheet.Oracle Financial Analyzer, an OLAP tool, allows users to analyze, model, forecast and report on financialdata. With the GL, Financial Analyzer can perform top-down, bottom-up, and distributed budgeting andforecasting at corporate and departmental levels. The GL uses a relational data model, and OracleFinancial Analyzer uses a multidimensional data model. The GL maintains and reports on accountbalances throughout the accounting period. Oracle Financial Analyzer analyzes financial data afterclosing the period and to prepare plans. Users can build custom financial reports without programming,such as balance sheets and income statements, using Oracle GL’s Financial Statement Generator (FSG).Reports can be defined online, with control over rows, columns and content of the reports. The FSG usesreusable and interchangeable report components that can be shared across other GL databases viadatabase link. Reports run on a server and can be viewed online or in word processor and spreadsheetformats.

Asset Management

Oracle Assets manages property and equipment inventories. It can administer equipment leases; acceptasset information from purchasing, payables and project accounting; and reconcile assets to the GL. Italso provides several hundred rate tables and depreciation methods, such as bonus rules and formula-based depreciation to support tax and financial reporting requirements of companies operating in differentcountries. Capital budgeting tools and projection functionality provide what-if analysis. Oracle Assets alsotracks physical equipment. Maintenance schedules can be defined to track service events; physicalinventory can be integrated with external bar-coding systems; and warranties and insurance policies can



be tracked. A self-service online query tool allows users to retrieve data about their inventory in the OracleAssets system.

Oracle’s Enterprise Asset Management (EAM) product, which added in release 11.5.7, is designed forcompanies relying heavily on asset maintenance systems, such as utilities, metals/mining, pulp/paper,petrochemicals, facilities, education and transportation. It focuses specifically on maintenance, repair,warranty tracking and scheduling. A maintenance management function tracks assets at the componentlevel and generates a purchase order (PO) to procure noninventory maintenance items directly related toa maintenance work order. Users can view asset configurations, access work history on assets andidentify required parts used for an asset work order. Asset Work Management functions allowmaintenance staff to enter online work requests and use Oracle Projects to develop budgets and workrequirements.

Expenditure Management

Oracle Purchasing, Payables and Assets are integrated and provide automatic PO and invoice creation,tax withholding, and invoice and payment processing. Multilevel payment holds and two-, three- or four-way matching support management controls are provided.

Receivables

Oracle Receivables is an accounts receivable (AR) system handling invoicing and collection processes.Users can monitor and collect receivables to reduce delinquent accounts and improve cash flow.Receivables supports high-payment volumes by automatically applying cash receipts based on definablebusiness rules. Users can generate invoices, debit memos, credit memos, chargebacks, guarantees andcommitments. The application’s billing and collection processes support dunning letters, statements,aging and key indicator reporting.

Cash Management

Oracle Cash Management is integrated with Purchasing, HR, Receivables, Payables and GL to supportmultinational, multicurrency bank reconciliation and cash management. It supports enterprise cashforecasting. Cash Management provides a cash planning capability, allowing users to project cash needsand evaluate cash position.

Treasury Management

Treasury Management, a Web-based application, is designed to help multinational organizations managedebt, investments and derivative instruments. Users manage cash resources (including cashrequirements, cash position and potential exposure), while applying global currency fluctuations.Functions include in-house banking, deal administration, reconciliation automation and adherence toregulatory requirements. Some elements of risk analysis are available in the Treasury module and inOracle’s Collections Workbench to analyze bad debt, but Oracle is not actively addressing market riskanalysis with a stand-alone application. Treasury Management allows users to manage an in-house bankfor internal subsidiaries and intercompany transactions. It supports corporate reconciliation, allowingusers to reconcile bank statements with payments, receipts and journal entries from other Oracleapplications or other systems. Users can identify and resolve exceptions, manage bank errors andcompare bank-reported activities to actual system transactions to identify potential fraud. It supportsregulatory requirements, such as FASB regulations for reporting risk exposure. Recent enhancementsinclude automated import of market data, such as foreign exchange rates, interest rates, bond prices andoption volatility data. This function can be scheduled to automatically import current or historic rate tables.

Self-Service



Oracle provides self-service applications for employees, customers and trading partners via corporateintranet or the Internet. Internet Expense allows users to enter expense reports from a desktop, laptop orWeb-enabled mobile device. The reports are routed for approval and sent to the Payables applications forpayment. The Internet Time self-service application allows employees to enter time cards, which arerouted and approved automatically before being recorded. An iReceivables application offers a self-service credit and collections function, enabling employees and customers to perform Receivablesfunctions over the Web. For example, users can make online inquiries, review account balances, pay bills,initiate billing disputes and automatically issue credit memos. Oracle also provides access to Dun &Bradstreet’s (D&B’s) business information through Oracle Financials. Content includes contact, financialand credit information from global companies. Users can match their existing customer or prospectrecords with D&B data, and copy the D&B data if available.

Oracle offers mobile applications, enabling Internet-based access to business transactions, using awireless Web-enabled mobile device, such as a Web-enabled phone, a pager or a PDA. MobileExpenses, Mobile Accounts, Mobile Customer Directory and Property Manager Mobile Contact Directoryare applications supporting wireless access to Oracle Financials.

Customer Data Quality

Oracle Customers Online (OCO) addresses customer data management. OCO’s Data Librarian Optionprovides data import and de-duplication utilities to provide a single view of a customer record. The data isprovided via D&B. Using Oracle’s Trading Community Architecture (TCA), OCO can model andgraphically represent complex business networks and relationships, with nodes and links offering visualrepresentation of such relationships. The views allow users to see business relationships and drill intospecific customer overview pages.

Performance Management

Oracle is integrating its corporate performance management applications. By mid-2003, the vendor plansto offer a corporate performance management suite integrating Enterprise Planning and Budgeting,Balanced Scorecard, Performance Analyzer and ABM. Additional components will be integrated in laterreleases. Daily Business Intelligence (DBI) pulls data from Financials, supply chain management (SCM),and customer relationship management (CRM) applications and provides a consolidated view ofoperations. It includes a set of pre-configured reports for measuring performance against KPIs.

Pricing

Oracle introduced a new pricing model in 2002 based on the type of Oracle user accessing the system.Approximate cost for Professional Users is US$4,000 for users internal to the company and US$1,000 forusers external to the company. Approximate cost for Employee Users is US$400 for users internal to thecompany and $100 for users external to the company. Electronic Orders Pricing is also available foriStore, iPayment, Configurator, Advanced Pricing, Order Management, Release Management andPurchasing. Prices vary depending on the number of orders the customer processes per year. For up to12,500 orders per year, the License Fee is US$25,000. For more than 5,000,000 orders per year, theLicense Fee is US$3,100,000 plus US$0.10 per order over 5,000,000.

Standard Pricing is also still in effect and is reflected in the following chart. Customers should inquire withOracle directly to find out which model is to be used when pricing a specific instance of the system.



Table 7: Price List: Oracle Financials Applications

Application Price (US$)

Financials Application—Read Only User US$1,495.00

Financials Application—Read Only User 2-year license US$523.00

Financials Application—Read Only User 4-year license US$897.00

Financials Application—User US$3,995.00

Financials Application—User 2-year license US$1,398.00

Financials Application—User 4-year license US$2,397.00

Treasury Application—User US$24,995.00

Treasury Application—User 2-year license US$8,748.00

Treasury Application—User 4-year license US$14,997.00

Financials and Sales Analyzers—User US$1,495.00

Financials and Sales Analyzers—User 2-year license US$523.00

Financials and Sales Analyzers—User 4-year license US$897.00

Financials Intelligence—Employee US$50.00

Financials Intelligence—Employee 2-year license US$18.00

Financials Intelligence—Employee 4-year license US$13.00

Balanced Scorecard—Employee US$95.00

Balanced Scorecard—Employee 2-year license US$33.00

Balanced Scorecard—Employee 4-year license US$57.00

Internet Expenses—Expense Reports US$5.00

Internet Expenses—Expense Reports 2-year license US$1.75

Internet Expenses—Expense Reports 4-year license US$3.00

Activity Based Management—Employee US$95.00

Activity Based Management—Employee 2-year license US$33.00

Activity Based Management—Employee 4-year license US$57.00

Performance Analyzer—Employee US$70.00

Performance Analyzer—Employee 2-year license US$25.00

Performance Analyzer—Employee 4-year license US$42.00

iReceivables—1K invoice line US$50.00

iReceivables—1K invoice line 2-year license US$17.50

iReceivables—1K invoice line 4-year license US$30.00

Oracle Customers Online—Employee US$100.00

Oracle Customers Online: Data Librarian Option—

Application User

US$5,995.00

GSA Pricing

Yes.

Competitors

Oracle faces competition from ERP II vendors competing in both the large enterprise accounting andfinancial management market and in the four ERP II market domains. The large enterprise services ERPII market domain is focused on ERP II services solutions for enterprises exceeding $800 million in annualrevenue. A number of vendors provide basic functionality for services industries, but for larger enterprises,only a few vendors can provide applications on scalable platforms that can be internationally deployed.Oracle’s chief competition includes SAP, PeopleSoft, Lawson and J.D. Edwards.



SAP

SAP repositioned its mySAP Financials as a best-of-breed (BOB) solution and continues to build aStrategic Enterprise Management product. SAP’s financials portfolio offers standard financial accountingproducts designed to satisfy financial and operational management functions for global companies.Specific applications support accounting functions related to joint ventures, investments, real estate,leasing, asset management and treasury funds. SAP’s Financial Supply Chain includes financial functionsthat parallel activities in its Logistics Supply Chain. Financial Supply Chain includes electronic paymentoptions and payment methods for electronic bill presentment and payment. A portal strategy providesrole-based access to the financial system and to other internal and external data sources. SAP’sAccelerated Financials package targets small to midsize companies and delivers implementations offunctional subsets of mySAP Financials. SAP’s deployed marketplace capability provides a collaborativeframework for ERP II technology deployment.

PeopleSoft

PeopleSoft’s core expertise is in large-scale HR software systems, but the vendor also provides ERP andERP II functionality. Its applications support Financials, CRM, SCM and e-Business functions. AnEnterprise Performance Management (EPM) suite offers analytics applications for its Financialsapplications. A Profitability Management suite for Financial Services includes Funds Transfer Pricing, RiskWeighted Capital and a Balanced Scorecard. To target the mid-market, PeopleSoft Select providesspecific financial, distribution and HR applications combined with rapid implementation services deliveringsystems in three to six months. PeopleSoft, however, does not have a prevalent global presencematching SAP and Oracle. In ERP II markets, PeopleSoft is Oracle’s strongest competitor, offeringservice-centric functionality within its financials and HR solutions. PeopleSoft is also building aProfessional Services Administration (PSA) story via applications for managing services procurement,internal project automation and management, and analytics.

Lawson

Lawson’s Financials suite supports corporate financial and account management, enterprise budgeting,business planning and treasury management applications. Its architecture and complementary toolsenable data sharing, analysis and self-service. Analytic tools, such as eScoreCard, allow customers tomanage corporate resources strategically and tactically. The Financial Information Center provides self-service access to key indicators and balances for budgets, actuals, and ratios, as well as inquiry into GLand Activity-Based Management (ABM). Partnerships provide access to Hyperion’s Essbase OLAPengine and the Pillar budgeting system and enables Lawson’s Cash Management application to supportcorporate treasury management. Lawson’s financial functionality remains strong for North Americanenterprises, but its global support is limited. The vendor relies on partnerships for performancemanagement and some complementary functionality. Lawson has a strong vertical market focus. Lawsonis strengthening its position in the ERP II services domain with suites for Professional Services andFinancial Services. Lack of componentization is Lawson’s weakness, when applied to the definition ofERP II.

J.D. Edwards (JDE)

JDE offers financial functionality and is building performance management capabilities via internaldevelopment and external partnerships, focusing product development on vertical ERP II solutions. JDE’sfinancial applications support financial accounting and asset management for midsize and divisional unitsof large companies. OneWorld Financials includes some recently added global capabilities and extensionof accounting and financial processes to other business functions, such as manufacturing and productconfiguration. An EAM application suite enables asset-intensive businesses to track corporate assets



from inventory to property. The suite supports functions for fixed-asset management, equipmentmaintenance management, service and warranty, and property management.

Strengths

Traditional and Specific Functionality

Oracle is a traditional ERP vendor with an established presence in Financial Applications markets. Asfinancial management functionality among large enterprise accounting vendors reached full maturity,Oracle has the experience to add complementary applications supporting specific “types” of financialmanagement functions. For example, integration with other Oracle Financials applications allows thesystem to track property expenses and revenue by setting up subaccounts in Cash Management. TheTreasury application supports multinational treasury operations. Oracle Collections offers collectionsplanning, execution and reporting. An EAM application satisfies asset accounting for asset-intensiveindustries by supporting functions such as maintenance, repair, warranty tracking and scheduling.

Single Source ERP and Financials Vendor

As an ERP II vendor, Oracle offers end-to-end ERP applications sharing the same code base on a unifiedarchitecture and single data model. Integration of the core Financials applications among themselves is abenefit, as well as integration and data sharing between Oracle Financials applications and Oracle’s E-Business suite of SCM, CRM, Manufacturing, Projects and HR applications. For example, a customeraccount created in Order Capture is the same customer account used in Oracle Receivables. If acustomer configures and orders a product through an online ordering function in CRM, a ship date isconfirmed, inventory stock is evaluated to ensure adequate supply, price is determined, an invoice isdelivered and payment is accepted by Receivables.

Global Support

Oracle financial applications provide multinational support, including local regulatory requirements for 44different countries, and they provide single-byte, multibyte and bidirectional character sets. In addition tofeatures specific to Japan, Taiwan and Korea, other enhancements support business practices incountries across the Americas, Europe, Africa, the Middle East and Asia/Pacific.

Performance Management

Oracle’s Financial Intelligence component and evolving Corporate Performance Management suite areeach designed to support enterprise performance management requirements. Oracle is working toprovide an integrated framework among the components of its Business Intelligence offering to supportautomatic data exchange among applications.

Limitations

Functional Gaps

Although Oracle Financials provides strategic and tactical financial tools for midsize and largemultinational companies, the application does not cover some areas of financial processing, particularly inniche areas in the financial services market. For example, it does not offer stock administration forcompanies engaged in equities trading. A minipack of Treasury released in August 2002, however, doessupport equities. Also missing is a loan management solution supporting loan-processing functions forbanks. The Treasury applications, however, do support loans for corporate treasury departments. TheJune 2002 release of Risk Management addresses basic market risk management requirements,including analysis of interest rate and currency risks, but does not currently provide what-if analysis todetermine risk structures.



Slow With Strategic Enterprise Management Enhancements

Preoccupied somewhat with transitioning customers to its 11i release, Oracle has not recently madesignificant enhancements to its strategic enterprise management products. Oracle’s R&D and marketingefforts have also been clearly focused on CRM and a broader vision of its E-Business Suite.

Oracle Database Required

Oracle Financials only support the Oracle database and do not support MS Structured Query Language(SQL) Server or any other database.

Insight

Oracle remains a significant player in the large enterprise accounting software market, providing financialfunctions as part of its E-Business Suite. Multinational functions provide support for the regulatoryrequirements of 44 different countries. Oracle’s global support and inherent integration with other ERP IIapplications makes it an ERP II contender, but the vendor will need to strengthen its level of verticalindustry support to enhance its ERP II position. Oracle’s migration to ERP II and how well the vendor isdelivering the functionality required to support collaborative processes and service-related functionalityshould be considered as part of a product evaluation.

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