The Search for the Single Source of Truth - Eliminating a Multi-Instance Environment
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Changes in financial reporting requirements have transformed the fixed asset accounting framework. International Financial Reporting Standards (IFRS) require fixed assets to be recorded at cost, but there are two accounting models – the cost model and the revaluation model. So what’s the difference, and when should you use each? This session will address fixed asset accounting and reporting under both models and how each is accounted for in Release 12.
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The Search for the Single Source of Truth - Eliminating a Multi-Instance Environment
- 1. Session ID: Prepared by: The Search for the Single Source of Truth: Eliminating a Multi-Instance Environment # 10815 @heleneabrams Helene Abrams CEO eprentise, LLC
- 2. Agenda Introduction Multi-Instance Environment • History • Limitations Consolidation vs Migration • How Does Consolidation Work? • What Are The Benefits? Case Studies and Examples Roadmap to Consolidation 2
- 3. 3 eprentise Can… …So Our Customers Can: Consolidate Multiple EBS Instances Change Underlying Structures and Configurations Operating Groups, Legal Entities, Ledgers Chart of Accounts, Other Flexfields Inventory Organizations Calendars Costing Methods Resolve Duplicates, Change Sequences, IDs Separate Data for a Divestiture : Transformation Software for E-Business Suite Reduce Operating Costs and Increase Efficiencies Shared Services Data Centers Adapt to Change Align with New Business Initiatives Mergers, Acquisitions, Divestitures Pattern-Based Strategies • Make ERP an Adaptive Technology Avoid a Reimplementation Reduce Complexity and Control Risk Improve Business Continuity, Service Quality and Compliance Establish Data Quality Standards and a Single Source of Truth Company Overview: Established 2007 l Helene Abrams, CEO With Out-of-the-box Software
- 4. Learning Objectives After this session you will be able to: Objective 1: Understand how a multi-instance environment impairs financial operations and creates barriers to growth and innovation. Objective 2: Discover the top benefits of consolidation projects for the business and IT, and how it leads to a single source of truth. Objective 3: Learn how companies who completed consolidation projects improved reporting, eliminated duplicate efforts, and achieved sharing real-time information. 4
- 5. Multi-Instance Environment How did we get here? What are the limitations of a multi-instance environment?
- 6. Why Do Companies Have Multiple Instances? • Acquisitions • Earlier technologies didn’t support global environments – Bandwidth – Single sign-on – Regional and statutory differences • Limited understanding of how global businesses should operate – Shared processes, services • No internal champion – Enforce standards – Mandate sharing of data – Establish enterprise-wide governance and control • Existing environment does not meet business needs – Upgrade to new release – Customizations – Restructuring 6
- 7. Limitations of a Multi-Instance Environment • Infrastructure Costs – Hardware, maintenance, licenses – Duplicate integrations and interfaces – Redundant personnel for support • Reporting and Analytics • Customer Service – Consistency – Availability • Growth and New Initiatives • Transparency • Regulatory Requirements • Complexity 7
- 8. Consolidation vs Migration or Reimplementation How does consolidation work? What are the benefits of consolidation?
- 9. Incentives & Drivers of Global Operations • Consolidate repetitive data-centric processes to support implementation of a shared services center or a centralized data center • Generate financial reports directly from the system of record • Reduce operating and maintenance costs to improve the bottom line • Create a single source of truth to improve business processes and business intelligence • Enable revenue optimization whenever and wherever possible to improve the top line • Capitalize on enterprise-wide synergies to leverage purchasing and to better understand customers • Obtain access to new markets and the opportunity to scale the business 9
- 10. Traditional Approach vs. Consolidation Migration or Reimplementation • Configure new instance (all setups, all master data) • Technical team writes custom code to extract transactions from each source instance to the target instance • Developers create transform scripts to fit (usually one year’s data, balances, and in-process transactions) into new configuration • Using APIs, developers load data into new instance Consolidation • All database objects and every row of data are compared between source(s) and target • All differences and all conflicts are resolved automatically • All source data (configurations, master data, and transactions) including all history is moved from the source to the target. • There is no need to write any Extract, Transform, or Load scripts, no need to find landing balances, close in-transit items, or maintain a sunset instance for the history 10
- 12. Every Difference Resolved, Every Table, Every Row Example: Flex Value Differences FLEX VALUE SET NAME MAXIMU M SIZE ALPHANUMERIC ALLOWED FLAG UPPERCASE ONLY FLAG APPLICATION TABLE NAME VALUE COLUMN NAME ID COLUMN NAME AP_SRS_OPEN_INTERFACE_SOURCE 25 Y N AP_LOOKUP_CODES DISPLAYED_FIELD LOOKUP_CODE AP_SRS_OPEN_INTERFACE_SOURCE 80 Y N AP_LOOKUP_CODES DISPLAYED_FIELD LOOKUP_CODE FA_ADI_CORP_BOOK 15 Y N FA_BOOK_CONTROLS_SEC BC2, GL_SETS_OF_BOOKS SOB BOOK_TYPE_CODE FA_ADI_CORP_BOOK 15 Y N FA_BOOK_CONTROLS_SEC BOOK_TYPE_CODE FA_BOOK_DEFERRED_DEPRN 15 Y N FA_BOOK_CONTROLS bc, FA_CALENDAR_TYPES ct bc.book_type_code FA_BOOK_DEFERRED_DEPRN 15 Y N FA_BOOK_CONTROLS_SEC bc, FA_CALENDAR_TYPES ct bc.book_type_code FA_BOOK_TYPE 15 Y Y FA_BOOK_CONTROLS BOOK_TYPE_CODE FA_BOOK_TYPE 15 Y Y FA_BOOK_CONTROLS_SEC BOOK_TYPE_CODE GPIARSTMT_STMT_DATE 9 Y Y gpi_ar_statements_audit statement_date DISTINCT statement_date GPIARSTMT_STMT_DATE 9 Y Y custom.gpi_custom_statements_audit statement_date DISTINCT statement_date GPI_AP_CHECK_NUM 30 Y Y ap_checks ch, ap_bank_accounts ba, ap_bank_branches bb ch.check_number distinct ch.check_number GPI_AP_CHECK_NUM 30 Y N ap_checks ch, ap_bank_accounts ba, ap_bank_branches bb ch.check_number distinct ch.check_number GPI_AP_SITE_CODE_BY_SUP_NAME 15 Y Y po_vendor_sites_all povs, po_vendors pov povs.vendor_site_code DISTINCT povs.vendor_site_code GPI_AP_SITE_CODE_BY_SUP_NAME 15 Y N po_vendor_sites_all povs, po_vendors pov povs.vendor_site_code DISTINCT povs.vendor_site_code GPI_AP_SRS_ACTIVE_VENDORS 80 Y Y PO_VENDORS PO PO.VENDOR_NAME PO.VENDOR_NAME GPI_AP_SRS_ACTIVE_VENDORS 80 Y N PO_VENDORS PO PO.VENDOR_NAME PO.VENDOR_NAME GPI_AP_SRS_VENDOR_NAME 80 Y Y PO_VENDORS VENDOR_NAME VENDOR_NAME GPI_AP_SRS_VENDOR_NAME 80 Y N PO_VENDORS VENDOR_NAME VENDOR_NAME 12
- 14. Data Quality - More than Just Master Data Management Jobs & Positions Configuration Field Label Security Report Content Configuration Constraints Different but same DFF Same but different DFF Missing DFF Target Missing DFF Source Instance 1 Dir. Of Apps July 9, 2010 Labor Hierarchical Report A Biweekly 300 Hrs XYZ XA-01 1-2-3 Instance 2 Fin. Systems 10-07-09 Labour No Security Report A Two-week 199.99 Hrs Xyz-1 XA-01 RB eprentiseMetadataAnalysis eprentiseConsolidationSoftware Consolidated Instance Fin. Systems 10-07-09 Labor No Security Report A, Report A-1 Two-week 199.99 Hrs Xyz-1 XA-01, XA-02 1-2-3 RB 14
- 15. Changes Made Automatically During Consolidation Three Types of Changes: Name Changes ID Changes Synchronization 15
- 16. Master Data • Resolves conflicts - Identifies exact duplicates based on constraint columns – Name – prefixed or suffixed – ID or Number – incremented by max seq number of target – Exact duplicate with different ID – repointed to target ID • By default, for the non-constraint columns, takes the target attributes (tax id, credit limit, etc.) • Data that exists in the source, but not in the target is moved into target as is • Data in target but not in source remains • Most data is at OU level. Comes into the consolidated instance within a separate ledger and OU. • Use Oracle merge suppliers, customers functionality to resolve duplicates after consolidation is complete 16
- 17. Case Studies and Examples
- 18. Considerations for Consolidation • Tools instead of manual efforts • Governance • Reporting and statutory compliance • Remove silos – What needs to be different? – RICE-W/ CEMLI costs • Other changes before or after R12? • Implement new features after other changes • Test changes in isolation • Cutover window? 18
- 19. Technology • Four main technology issues surrounding globalization: – Availability – Access/Security – Performance – Functionality • E-Business Suite Release 12 is designed to support a global enterprise within a single instance, and it has several features that enable sharing of data and facilitate the globalization effort. 19
- 20. A Single, Global Instance • A single global instance means: – Higher volumes – Longer batch processing time windows – More network traffic – Longer backup cycles – Longer test cycles • BUT, having several instances and systems multiplies the cost (licenses, hardware, staff) and introduces a different complexity in reconciling and synthesizing corporate information. Substantial infrastructure expenditures 20
- 21. Experian Globalization Process Operating Principles of Experian’s Global Financial Shared Services Center (GSSC) • Standard processes and controls will be implemented across the globe • Processes will be consolidated where possible • Local legal requirements will be incorporated to all processes • SSC should undertake as much processing work as possible • Financial models should include the cost of Oracle® software and the cost of migrating to the SSC 21
- 22. Experian’s Shared Services Strategy • Reduce costs and improve efficiency – Leveraged low cost locations and standardized on global business processes – Eliminated redundant efforts that were common when many corporate procedures such as month-end close and expense reimbursement were regionalized • Create additional capacity for growth – Reduced operational complexity – Opportunity to capitalize on Experian’s connection to a diminished number of entities (financial institutions, bank accounts, vendors, etc.) – Made the roll out of global process automation a realistic opportunity 22
- 23. Consolidation Projects : Traditional Migration/Reimplementation Project With eprentise Software Resources ~5 FTE Project duration 7 months Cost under $1M All history in single instance Zero errors after production cutover No SRs logged with Oracle for any eprentise product – ever Done in R11.5.10 Manual Migration to New R12 Resources ~250 consultants Project duration 18 months Cost between $12 million and $15 million 1 year history and balances Maintain sunset instances 47 Priority 1 SRs logged with Oracle after go-live 23
- 24. GE GRC Consolidation Project Resources (Does Not Include Resources for RICE-W Objects1) 1 Also does not include TCS external consultant help. 24
- 25. GE GRC Consolidation Project Timing Environment Preparation Run 1 Run 2 Dry Run Cutover to Production 7-16-2012 Instance available 10/29/2012 10-30-2012 2-20-2013 4-18-2013 5-25-2013 Included asset category change Turned over for testing 1-11-2013 Total Consolidation ~6 Months 25
- 26. GE GRC Consolidation Results • Much shorter duration than reimplementation • Complete data history and integrity maintained for BOTH instances without having to maintain a “sunset” instance • No manual migration or translation of existing data within Oracle® EBS, which provided accurate and consistent results for testing. Parallel activities were needed to align 3rd party/bolt-on applications. • Risk reduction – repeatable, predictable solution from Run1 through Production implementation. Only a handful of total eprentise-related issues during the entire project. All issues were resolved expeditiously (some within hours). • No issues after cutover period 26
- 27. GRC Benefits Realized • Streamlining Operations. As a result of the consolidation, GRC is now realizing the following business benefits: – Standardizing of business processes, such as: • Profile options now set consistently • Common structure of the Fixed Assets module • Rationalization of descriptive flexfields – Elimination of outdated data/processes, such as: • Localizations no longer in use • Unused GL calendars • Budgetary control • Reducing Infrastructure costs. GRC has been able to eliminate the costs associated with: – Shutdown of the India/China Oracle® application – Oracle® infrastructure licensing – Simplified patching and maintenance (particularly in regard to localizations) – No need for sunset instance – Elimination of redundant interfaces (3rd party applications, shared services providers) “Thanks to the eprentise software and support team, GE Global Research Center in Niskayuna, New York, now operates on a single, global, Oracle® EBS instance, freeing up resources to further support their focus on industrial research.” 27
- 29. Objective: Cutover in a Long Weekend • Environment – 3 or more EBS instances • Challenges – Reduce production downtime to a single long weekend – Possibly do an upgrade to R12 during the same period – Change many interfaces and customizations – Need to retain history 29
- 30. 30
- 31. DURING THE FIRST TEST CYCLE 31
- 32. Step 1: Upgrade and Patch to Same Version • eprentise works at the database tier • Install needed products in the target production instance • Add patches and localizations to the production environment that are present in the source but not the target – May result in database object differences (additional columns, indexes, constraints, modules, etc.) • Update database objects in the target production environment • Create a test environment – Add space and other resources to target environment to accommodate all instances – Reference instance clone same as test instance – Need one reference instance for each source instance 32
- 33. Step 2: Analyze the Instances • Prepare run book for first test cycle • Install eprentise Software • Run Metadata Analysis on each source instance and on target instance – Identify and resolve potential conflicts • Key flexfields • Descriptive flexfields – Determine sequences and incremental factors that need to be changed in the source instance 33
- 34. Step 3: Use Metadata Analysis Reports to Resolve Conflicts • Generate reports on maximum sequence number, incremental factors – Use results to modify RICE-W objects (reports, interfaces, customizations, enhancements, workflows) to implement/change in target instance – Identify obsolete configurations (localizations, modules not used) • Make business decisions on standardization of data, processes 34
- 35. Step 4: Prepare for Consolidation – Key Flexfields • Change “Single Instance” key flexfields in target instance to accommodate source key flexfield structures instance • Single flexfields per instance listed below: 35
- 37. Step 5: Resolve Other Differences • Seed Data • Configuration Data – Value sets – Descriptive flexfields – Users, Responsibilities, Profiles – Personalizations • Master data 37
- 38. Step 6: Consolidate Instances: Move Each Source Data to Target Instance (Sequentially) • Align sequences of target environment • Synchronize IDs to target sequences • All history moved – No calculations of beginning balances – No determination of “open items” or “in-transit” items – No maintenance of sunset instances (transparency, consistency within EBS) • Configurations will either default to target configurations, or be brought over from sources – No need for manual configuration or scripts – Transaction types, journal sources, journal categories, expense templates, expense report policies, signing limits, historical rates from each source instance • Time required depends on I/O speed, but averages less than 10 hours to move each source into target • Update run book for second test cycle 38
- 40. After Sources are Consolidated into Target 1. Create clones of consolidated instance for testing 2. Test consolidated instance EBS functionality 3. Upgrade to R12 (Optional) 4. Modify interfaces, customizations to align with target instances 5. Unit test RICE-W objects 6. Implement security 40
- 41. No extract, transform, or load scripts Change-in-place software All data is changed in the current environment, so there is no need for a sunset instance or maintenance of historical information. No custom code Standard, out-of-the box software that fits every customer’s environment Standard development, rigorous testing and error handling, standard reports generated documenting the changes. Flexibility to adapt to changing requirements Rules-based system Rules may be changed as customer requirements change during the course of the project, and as customers review the finished results. Rule changes can be completed in hours or a few days, rather than weeks with teams of developers. Full audit trail available Reports generated from software before and after transformations are made All history is in the same format, in the same environment. (No need to set up new instance or new books or new operating units) All data (historical and current) is consistent, complete and accessible. Maintains relational and data integrity Software will not proceed to next step if the data integrity is violated Code is automatically generated based on rules. When consolidating instances, every row of data and every data object is compared , and differences automatically resolved so there are no conflicts between source and target. Testing of results All changes are made by the software, so there is no need for unit testing of code or error handling. Business users are given a functional system to test and reconcile. Lower costs, shorter duration Shorter project duration with fewer resources translates to lower costs. Most projects completed in months. Costs are a fraction of migration costs. Customizations, interfacing systems Costs are the same with traditional or eprentise approach eprentise reduces the risks associated with creating migration scripts only within E-Business Suite. (There is no impact on the time or effort required to analyze RICE-W objects or CEMLIs.) New functionality Process of adding R12 features like AGIS, secondary ledgers is the same with traditional or eprentise approach. No need to re-configure what works in current environment. Only need to set up new functionality. Alternative 41
- 43. THANK YOU Helene Abrams CEO [email protected] eprentise, LLC www.eprentise.com Accelerating the time for change in Oracle E-Business Suite Visit eprentise at booth 1423! 43
- 44. Please complete the session evaluation. Session #10815 We appreciate your feedback and insight. You may complete the session evaluation form on your COLLABORATE 16 agenda builder and networking app!