Merge Ledgers or Sets of Books
A large system integrator put each line of business into a separate primary ledger in their E-Business Suite. Realizing that the same customer may use each of their ERP implementation services, their security services, and their data warehouse services, they decided to merge their ledgers. The chart of accounts, the currency, the calendar, and the accounting conventions were the same for all 9 of their ledgers.
The firm used eprentise Reorganization software’s MS Sets of Books module to merge their 9 ledgers into a single primary ledger. They created operating units for each of the lines of business to keep the transactions separate and to maintain controls within the organization. They used Multiple Organizations Access Control in R12 to enable cross organizational processing and reporting on operating units in their subledgers.
A high-tech manufacturing company currently has 10 segments in their chart of accounts:
- company – 3 digits
- business unit – 3 digits
- department – 4 digits
- account – 3 digits
- subdetail – 4 digits
- intercompany – 3 digits
- management company – 3 digits
- product code – 4 digits
- project code – 8 digits
- marketing channel – 2 digits
They do extensive reorganizations each quarter to accommodate department changes. There were two identified needs: a short-term change to ease the burden of the quarterly reorganizations, and a longer-term redesign of the Chart of Accounts. The reorganizations are caused when people (sometimes individually, and sometimes in groups) are moved from one department to another and all of their corresponding costs need to be changed to the new department. In the last reorg there were 819 department changes. These departmental reorganization changes generally take between 12-15 people about a month (not full time for anyone and a coordinator about 30-40% time).
The company used FlexField software to reorganize the department numbers to represent a true cost center rather than an HR organization. They estimated that the change to the chart of accounts saves them almost $500,000 annually and they are able to close their quarter much faster.
Move Legal Entities to a New Ledger or Set of Books
Before moving to E-Business Suite, the legacy systems for a steel manufacturing company did not handle multiple legal entities. They had set up separate accounting books for each legal entity. Not really understanding the functionality of E-Business Suite, they initially set up their applications to have multiple sets of books – one for each legal entity.
Using eprentise Reorganization software’s MSM Legal Entities module, they moved all the legal entities into a single set of books giving them visibility into the entire enterprise and the ability to operate consistently.
Merge Org Units or Inventory Organizations
A utility company had thousands of warehouses across the city to stock their cable, poles, meters, and other supplies. Each warehouse was set up in their Oracle E-Business Suite as a separate inventory organization. Every time a work order came in, the truck drivers had to check the inventory at the closest warehouse and if the item was out of stock, had to check 4 or 5 other warehouses to locate the item. If the item was not used, they had to go back to each of the warehouses to have the item restocked. Sometimes a warehouse would reorder an item when the same item was overstocked at a warehouse just a few blocks away.
The company decided to consolidate their inventories into 4 warehouses – one in the north, one in the south, one in the east, and one on the west side of the city. They used eprentise Reorganization software’s MSM Inventory Organizations module to consolidate their inventory organizations. The result was a 20% savings on the warehouse costs, approximately 40% savings of time for their truck drivers, and a 27% savings on inventory costs.
Consolidate Supplier Terms
During an ad-hoc vendor analysis project, a large computer manufacturing company discovered that throughout the organization, it had many different contracts with each of its suppliers, each with different payment terms, inconsistent discounts, and shipment policies making it difficult to determine how much business they did with any one supplier, whether they were getting the best prices, and whether they were able to leverage their purchasing power. Furthermore, it discovered that there was no uniform way of accounting for the cost of goods sold, as expenses were set up to be tracked only by product. While accounting for expenses by product made it easy to determine profit margins for a particular product line, the lack of consistent accounting practices.
The company used eprentise Reorganization software’s MS Inventory Organizations module to consolidate its inventory organizations into organizations based on product lines, and to assign their costs consistently at the subinventory level within each organization. They also standardized on their min/max reorder points for each item, and standardized on their receiving policies within each organization unit. They used eprentise Data Quality software to identify and resolve duplicate suppliers and MRO items. Four hundred vendor contracts were renegotiated, the supplier list was consolidated, and the company was able to save an estimated $9 million a year in supplies.
A manufacturing firm recently acquired a plant and needed to integrate the new inventory with its own. Not only did the inventoried products need to be added to the new system, but the historical data from the acquired plant was necessary in order to allow the acquiring company to continue to provide accurate forecasting data to management.
The company used eprentise Reorganization software’s MSM Inventory Organizations module to consolidate their inventories into a single warehouse as well as to consolidate their inventory organizations. They were able to reduce their warehouse costs by 35% and their inventory costs by 25%.
Break Down the Silos
A multinational corporation that has been in business 22 years had recently begun to notice that the systems behind its different business units kept track of the same information, but in different forms and formats, creating a large amount of duplicate data that was difficult and time-consuming to reconcile. In the early stages of the business, each line of business developed its own systems rather than adopting a large ERP system to drive the business as a whole. When E-Business Suite was finally adopted, each line of business implemented its own instance of the Suite, not considering that they were still duplicating the effort of tracking the same data and then having to weed through it for reporting purposes. Many third-party hardware systems were introduced in order to integrate the systems, but they found that the new hardware actually increased the time required to get the reports they needed. The company needed a way to increase communication between the systems and reduce the amount of duplicated efforts across the company.
The company used eprentise Instance Consolidation software to consolidate all of its instances into a single instance that functioned on its own. During the process, duplicate data such as customers, vendors, employees, and products was eliminated, and the silos of information were broken down allowing different areas of the business to communicate seamlessly. The company was then able to get the reports its needed straight from E-Business Suite and was able to eliminate a large energy footprint in the form of integration systems.
Change Your EBS Calendar
A pharmaceutical company has been acquired. The old company used a fiscal 4-4-5 calendar (so period 1 ended on January 28) and the new parent company uses a monthly calendar (with period 1 ending on January 31).
Using eprentise Reorganization software’s Calendar Change module, the acquired company changed the start and end dates of each of their GL periods. eprentise created unposted journal entries to add all the transactions from January 29-31 to period 1 and subtract them from period 2. It did the same for all the periods in the year. After changing the start and end dates for the GL periods, they used eprentise to synchronize the Fixed Assets calendar, the project accounting calendar, and the inventory calendar to the GL calendar. Everything tied out to the penny with the new calendar.
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