Written by Helene Abrams Tuesday, March 16 2010
Oracle describes R12 as "the global business release," and much of the focus has been on improving the ability of EBS to better manage complex global businesses, especially where organizations are centralizing their applications into a shared service environment. Some of the key enhancements include the introduction of a Common Accounting Engine with Subledger Accounting (SLA) and Multi-Org Access Control (MOAC). This article examines how to best use a single chart of accounts and a single instance to leverage R12 functionality to meet the globalization challenges.
Ledgers have replaced the concept of sets of books in EBS. A ledger can have its own accounting method, calendar, currency, and chart of accounts. Ledgers can be combined into ledger sets for processing all transactions. This means that a user can enter a single transaction in the primary ledger, and by defining create accounting rules and events, can update multiple ledgers without having to reenter the same information for each transaction. In a global environment, a company might have ledgers to comply with statutory requirements of a particular region or to report on the same data in a different way. For example, most organizations with foreign subsidiaries need to prepare their consolidated financial statements according to IFRS (International Financial Reporting Standards) and also US GAAP standards. Using SLA, a company can have one ledger that complies with IFRS and one that complies with GAAP accounting methods, post the transactions one time, and generate the consolidated reports from both ledgers. When a user posts a transaction type to the primary ledger, the “Create Accounting Function” uses a set of rules to update the statutory ledger. In R12, Oracle also introduces a single accounting engine to manage all posting activities into the general ledger. In prior releases, modules such as AR and AP contained their own rules for posting accounting events into the general ledger. The universal posting engine streamlines the close process. By applying standard accounting rules to all business transactions, SLA ensures consistent financial reporting. If the business uses a single chart of accounts, the user only needs to define the rules to create the transactions for posting to the GL or to subledgers one time, and then all the related subsidiary ledgers in a ledger set will be updated automatically. Users need to support only one set of rules, and maintenance of rules is simplified. A single global Chart of Accounts and a single global instance reduces the time spent compiling, reconciling, and consolidating financial data from disparate systems and spreadsheets and reduces the close time between the different modules and the general ledger. With a single chart of accounts and SLA, accounting policies are standardized across the entire enterprise and everyone adheres to the same set of rules and definitions. The data remains consistent, has full drill-down and roll-up capability, auditability, and visibility into all of the activity for the entire ledger set.
Multi-Org Access Controls provide the ability to manage customers and suppliers across operating units without changing responsibilities. Users can be assigned to multiple operating units, and processes and transactions can span operating units. MOAC increases the efficiency of operating a shared service center with streamlined access, processing, and reporting across operating units. Operating from a single global instance ensures global corporate consistency and global visibility. From a single global instance, MOAC provides the ability to negotiate with suppliers and leverage purchasing power across the enterprise. A single global instance with MOAC implemented allows customers to make decisions based on complete information, even when the business crosses regions and divisions.
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January Puzzle
A traveler gets lost on a deserted island and finds himself surrounded by a group of n cannibals.
Each cannibal wants to eat the traveler but, as each knows, there is a risk. A cannibal that attacks and eats the traveler would become tired and defenseless. After he eats, he would become an easy target for another cannibal (who would also become tired and defenseless after eating).
The cannibals are all hungry, but they cannot trust each other to cooperate. The cannibals happen to be well versed in game theory, so they will think before making a move.
Does the nearest cannibal, or any cannibal in the group, devour the lost traveler?
Solution
The short answer is the traveler’s fate depends on the parity of the group. If there is an odd number of canibals, the traveler will be eaten, but if there is an even number, the traveler will survive.
To prove this, we will consider small groups and use mathematical induction to explain the solution for larger groups.
Case n = 1: this is an obvious case. If there is one cannibal, the traveler will be eaten. It doesn’t matter that the cannibal will get tired because there are no other cannibals around as a threat.
Case n = 2: this is a more interesting case. Each cannibal wishes to each the traveler, but each knows he cannot. If either cannibal eats the traveler, then he will become defenseless and the other one will eat him. So each cannibal uses backwards induction to realize that the only strategy is to not eat the traveler. The hapless traveler finds a bit of luck, therefore, and actually survives.
Case n = 3: this is where the problem gets interesting. The best strategy is for the closest cannibal to make a move and eat the traveler. The cannibal will be defenseless after eating, but ultimately he will be safe. Why is that? The reasoning is due to induction: once the cannibal eats the traveler, the resulting situation has 2 unfed cannibals and the 1 defenseless cannibal. But as we just showed above, when there are 2 unfed cannibals, neither will make a move for fear of being eaten by the other! Thus the first cannibal to make a move will be safe as the remaining 2 cannibals block each other.
We can prove the higher cases using mathematical induction. If the number n is odd, then the closest cannibal can safely eat the traveler because the remaining number of unfed cannibals is even (and by induction, with an even number of unfed cannibals no one makes a move). If the number n is even, then no cannibal will eat the traveler, for if he did, the remaining number of cannibals would be odd, meaning he will get eaten by the induction hypothesis.
Success Tips for Oracle Project Management
- Create a standard for documentation at the beginning of your project, and hold team members accountable for completing documentation requirements as well as keeping them at and above the standards required.
- Before promulgating user documentation or training, it’s also a good idea to choose a representative from the among the business users base to review materials first.
- If you are not sure about the resources and budget required, obtain several estimates from people that have experience with the same size and scope of your project.
- Be explicit, before beginning the project, what internal resources are required for execution. This includes people, infrastructure, hardware, and software.
- Help the project champion understand the impact your project will have on the organization and how its successful completion will make him or her an internal hero or heroine for supporting it.
- Break up your project into smaller projects (try for projects that can be completed in 4-6 months, especially early on) to get success and demonstrate momentum.
- Make sure that your testing includes reports, upstream and downstream interfaces, customizations, enhancements, and workflows.
- Ensure that comprehensive transition reports and meetings between departing and incoming personnel are completed.
- Instead of spending time and resources implementing third-party reporting, consider consolidating multiple instances, moving to a global chart of accounts (CoA), and/or standardizing on a consistent calendar.
- Include governance, risk, and compliance management as part of the project plan.
- Finally, celebrate the successes. Too many projects focus on defects, failures, or small cost over-runs without looking at the big picture and what was accomplished.
The Analyst Corner
John Van Decker, Research VP of Gartner, states:
"A single chart of accounts allows consistency in financial reporting across the enterprise by standardizing on common metrics and reporting structures, reduces dependencies on a separate financial consolidation system, and significantly reduces the costs incurred with ongoing, complex conversions and translations."
