Celantra Systems:

Prepared by Hans Kolbe

Partner, Celantra Systems
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 Introduction
About the Presenters
Company Information

The Business Case Why Op Unit simplification?

How the LE is represented? History walk through V 9
Fusion Apps

Multi-Org Models available in R12

Opportunities, Questions & Solutions
Customer Implementation Report: Facebook

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info@celantrasystems.com
www.celantrasystems.com
Global Implementations and Process
Alignment: Plan, Design, and Execute
Celantra Systems provides innovative solutions
to todays most vexing issues in multi-national
ERP configurations.

Visit Celantra Systems

Exhibit Table: Location 21

Celantra Compliance Rule Engine (CCRE) and Compliance Sequencing Utility

Celantra has released a number of automated compliance tools, based on the Celantra
Compliance Rule Engine (CCRE)
Celantra Sequencing Utilities supports Oracle clients with international operations. We
ensure gapless date sequenced numbering for VAT and statutory journal reporting.
Automated audit trails and reporting are provided.

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About the Presenter: Hans Kolbe

Hans Kolbe has managed and advised global
software implementation projects for over 15 years.

His extensive knowledge on Oracle applications is

combined with a formal background as a German
attorney, trained in international and comparative
law.
Chair of Multi-National SIG Group
Specialist in Intercompany and multi-org
configurations, international compliance and
transaction tax
hanskolbe@celantrasystems.com
www.celantrasystems.com
415-730-1131

Visit the Celantra Systems Exhibit at Table 21

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Standard (Silo) ERP Multi-Org Model

All Subsidiaries are Parallel Entities, 1 Ledger, 1 LE, 1 Op Unit
Consolidated Ledger

Central Ger
L1410 1462

Fra U.K Ita Swe Den Hol Bel Swi Aus Spa Pol
1475 1473 1463 1444 1432 146 144 146 141 1467 14xx
1
2
5
5

LE

LE

LE

OU

OU

OU

Inventory
Per Operating Unit : One Validation Org for VAT rates , One Planning Org , Global Master.
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Traditional Silo Model

1 Ledger-1 Legal Entity-1 Operating Unit
Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Ledger

Ledger

Ledger

Ledger

Ledger

LE

LE

LE

LE

LE

OU

OU

OU

OU

OU

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Advanced Silo Model

1 Ledger-n Legal Entities-n Operating Units
Secondary
Ledger
Secondary
Ledger
Secondary
Primary Ledger
Ledger

L
E

L
E

L
E

L
E

L
E

OU

OU

OU

OU

OU

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New Cross Legal Entity Operating Unit (CLEO)

1 Ledger-n Legal Entities-1 Operating Unit
Secondary
Ledger
Secondary
Ledger
Secondary
Primary Ledger
Ledger

L
E

L
E

L
E

L
E

L
E

OU
9
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New OU Model - Business Objectives

Reduce the time (from months to days) that it takes to add a new

legal entity (LE) into Oracle

This could be for either an acquisition or an existing LE that is not

yet on Oracle

Ensure that any changes to business operations resulting from

this new approach do not negatively impact:

Qualcomm accounting operations
ERP support by FSG & IT
Month-end close processes are not negatively impacted

Design this new solution around a typical international

implementation scope GL, FA, PO, AP and Projects

Assumption is that orgs requiring either manufacturing,

component inventory or order management must have separate LE

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Multi-LE OU Pros & Cons

Pros

Adding a legal entity into Corp Oracle

(e.g. from acquisition) could be
radically faster than current approach
(creating a separate OU)
Single Operating Unit with multiple
legal entities should improve
operational efficiency
Fewer OUs to close at month-end will

help to speed the close, assuming no

additional tasks are required
Multi-LE support aligns with Oracles

Cons
Impact on business operations
resulting from configuration
differences is not known
Impact on support functions (IT &

FSG) not known

Not intended to support
manufacturing-related activities
If a legal entity grows too large, it
could entail configuring a separate OU
at a later date

stated direction for Operating Unit

concept & Fusion Apps

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Legal Entity Representation from Release 9 to 12

Release 9 - multiple installs
GL: Set of Books or Balancing Segment Value
Sub-ledgers: multiple installations of Oracle Applications
Release 10 Operating Unit
GL: Set of Books and/or Balancing Segment Value
Subledgers : Operating Unit
Release 11 Operating Unit and Legal entity (limited)
GL: Set of Books and/or Balancing Segment Value
Subledgers : Operating Unit
Legal entity (very limited functionality) Op Unit fixed in Hierarchy below LE
Release 12 Legal entity
GL: Set of Books and/or Balancing Segment Value
Sub-ledgers: Legal entity (financials)
Fusion Apps Legal Entity and Business Unit

GL: Ledgers, BSV, BU, secondary balancing segment

Sub-Ledger: LE (including operational)
Operating Unit is gone

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Legal Entity and Operating Unit

An Operating Unit is not directly connected to a

Legal entity

Default Legal Context is used to assign one of the

Legal Entities within a Ledger

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Legal Entity and Accounting

Ledger representing a Legal Entity

BSV (Balancing Segment Value) representing a Legal

Entity

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Traditional Silo Model

1 Ledger-1 Legal Entity-1 Operating Unit
Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Secondary
Ledger
Primary

Ledger

Ledger

Ledger

Ledger

Ledger

LE

LE

LE

LE

LE

OU

OU

OU

OU

OU

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Advanced Silo Model

1 Ledger-n Legal Entities-n Operating Units
Secondary
Ledger
Secondary
Ledger
Secondary
Primary Ledger
Ledger

L
E

L
E

L
E

L
E

L
E

OU

OU

OU

OU

OU

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New Cross Legal Entity Operating Unit (CLEO)

1 Ledger-n Legal Entities-1 Operating Unit
Secondary
Ledger
Secondary
Ledger
Secondary
Primary Ledger
Ledger

L
E

L
E

L
E

L
E

L
E

OU

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Opportunities using the Legal entity

independently from the Operating Unit
Model the legal structure independently of operational structure and
accounting structure; Align Operating Unit with operating structure
Reduce Month-End Activities and Reconciliations
Reduce time to integrate acquisitions and roll-out new modules and
functionality
Dramatically reduce time to integrate acquisitions and roll-out new modules
and functionality
Ensure global processes by reducing number of configurations and

synchronizations challenges
Improve global data quality - reduce duplication
Ensure global processes by reducing number of configurations and
synchronizations challenges

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Questions to the CLEO proposal

Does this design fit my operating structure?
Shared and local service services
Security, defaults, and validations

How can I connect each transaction to a single LE?

Payments, Invoices
Reconciliation

How can I fullfill my local statutory and tax reporting

requirement?

Sequencing, tax, accounting

Local COA and GAAP rules

What about Intercompany Transactions?

How does this impact corporate consolidations?
How do you deal with multiple functional currencies?

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Answers from the CLEO solution

Does this design fit my operating structure?
Align Multi-Org to Op. Unit / multiple Options

Transaction Ownership?
LE column in Finance Modules
Nominate Data Element in all others (Company Segment)

Local statutory and tax reporting?

Stat Reporting + GL sequencing in secondary ledger
VAT through EBus Tax and
Trx Sequencing thru sub-ledger configuration

What about intercompany Transactions?

Identify source, LE owner and LE partner

How does this impact corporate consolidations?

Generally no impact. Secondary ledger available, if needed.

Multiple functional currencies?

Secondary / Reporting ledger can be used.
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Legal Entity and Sub-ledger Transactions

Payables Transactions use the Customer Taxpayer id to select the Legal entity
Default legal Entity can be defined on supplier site Setup

Receivables Transactions use the Legal entity column

Defaults can be assigned on the Transaction Type and Batch
EB-Tax uses the Configuration Owner as Legal Entity
Legal entity can be assigned to a Tax Regime
Rules and Setups can be defined by Configuration Owner (=LE)
Oracle Payments uses Bank account owner to identify the Legal entity

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Challenges using the Legal entity

Implementation of Localizations
Not all localizations are supporting the Legal Entity
Sequencing: Document, Accounting and Reporting

Sequences
Sequencing Utility available

Inventory and Projects Intercompany Invoicing

Operating Unit is required to initiate Intercompany
Invoicing in Inventory and Projects
GL based IC journals
Journal Sweep Utility to identify required IC transactions
and generate input into AGIS Interface (FUN tables).

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Mrunal Potdar

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Current State
One Legal Entity (Multiple BSVs)
One Ledger
Multiple OUs (owns multiple Inventory Orgs)
Common Asset book (Corporate and Tax Books)
Proposed State
One Legal Entity per BSV requiring sub-ledger
support (more than One Legal entity)
One Ledger
Common OU (Own all US Inv orgs)
Common Asset book (Corporate and Tax Books)

Project Goals
Consolidate US OUs to one OU and design scalable
Source to Pay business process for operational
efficiency gains
Define Legal Entities using standard functionality
and assign BSVs (company codes)
Reduce PO cancellations significantly
Improvise US Payments accuracy and turn around
time
Accounting accuracy
Reduce Period close overhead (multi OU to single
US OU)

OU Consolidation Impact
Eliminates need for supplier setup in multiple operating units
Eliminates need to run key processes like invoice validation, create accounting, transfer to GL in multiple OUs
Improvise PO change process and eliminates need for PO cancellation
Allows transfers between inventory orgs within US OU for all US data centers
Speeds up close process (avoids review and sweeping of unaccounted transactions in multiple US OUs)
Improves IT's velocity / ability to roll out new entities from current time line of 4-6 weeks to few days to one
week
Simplify Invoice to Pay process leading to productivity gains overall Outsourcing effort
Supplier site cleanup including obsoleting redundant sites and merge duplicates

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OU Consolidation Impact
Eliminates need for supplier setup in multiple operating units
Eliminates need to run key processes like invoice validation, create accounting, transfer to GL in multiple OUs
Improvise PO change process and eliminates need for PO cancellation
Allows transfers between inventory orgs within US OU for all US data centers
Speeds up close process (avoids review and sweeping of unaccounted transactions in multiple US OUs)
Improves IT's velocity / ability to roll out new entities from current time line of 4-6 weeks to few days to one
week
Simplify Invoice to Pay process leading to productivity gains overall Outsourcing effort
Supplier site cleanup including obsoleting redundant sites and merge duplicates

Key Challenges

Delinking of BSV from existing Legal Entity and assigning it to new Legal Entities
Ensuring seamless transition to users for accounting impact
Non PO Invoices processing and accounting (Expense Accruals)
Payment processing transition - transition towards standard functionality of using bank account owning legal
entity to achieve segregation of payments
Sub-ledger reporting as existing OUs are consolidated in common OU. Correlating POs / Invoices / Payments to
BSVs in post OU consolidation requires reporting changes
EB Tax / Vertex changes to support Common OU

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Please contact us (415) 730-1131

info@celantrasystems.com
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